Aligning Meaning With Means II - Specifications

 

Aligning Meaning with Means:  Means Specificiations

 

I.- INside Out Orientation vs Outside In Heuristic

·         Aligning Meaning with Means vs Aligning Means with Meaning

·         Enough vs More

·         Fear: Outliving Money

·         Adaptability & Resourcefulness on the Balance Sheet

 

II.- Give I - Retrofitting Each Prioritized Goal - Living, Contingent, &

      Upon Passing (Graduating)

1. Meeting cash requirements (gottas not oughtas or shoulds) fundamental present daily living needs rather than wants - for preferably a 18 month period (the average time of a bear market so one doesn’t get the yipes)

 2 -After #1 Aligning meaning with means rather than means with meaning in priority

3. after #1 &#2 the prioritized goals, goal parameters (ground rules) and risk capacity (% or amount of downside willing to take)
   

4. goal specification (living)
   

-         amount,

-         duration

-         assumed

1.     after tax return, start finish),  

2.     risk capacity (% probability, % probability adjustment),

3.     guard rail criteria - Jonathan Guyton

§         initial 5%

§         adjust annually for inflation

§         prosperity rule - when withdrawals are 4% of less of accumulation increase 10%

§         capital preservation rule - when withdrawals of accumulation are 6% take a 10% cut in withdrawal

                4   attainment/adjustment: at levels + or - (funded or unfunded

§         of liquid income producing,

§         liquid non income producing,

§         illiquid income producing, illiquid

 

-         ((note for income adequacy for spouse, income replacement upon disability - contingency assets (((insurance))) are added).

-         CONSEQUENCE OF DOING NOTHING

5. Investment Policy -
   

·         for asset accumulation goals i.e. education, financial independence ((via passive assets prior to retirement),

·         retirement (through go go, slow go, and no go years) -

o       again subject to an 18 month period of cash living expenses (the average time of a bear market so one doesn’t get the yipes)

          o       Longevity Assumption

                                                             i.      Puttin’ It In vs Taking It Out

                                                           ii.      Safety versus Returns relative to what is necessary for the goals

6. goal specification contingent events

         Income Replacement due to Disability

• Capital replacement due to capital impairment
• Income Adequacy for Heirs (spouse)

1.     Longevity Assumption

• Asset Conservation upon Passing Graduation

                                                             i.      Liquidity

                                                           ii.      Asset Disposition According to Desires & Criteria

1.     giving to who you want, when you want, how you want and based to your criteria (including provision for your companion animals)

2.     If  Then - earn out/merit - contingencies

                                                        iii.      Legacy

1.     To whom, for what only, earned on the basis of, with clawbacks for non performance

 

The Soul of the Matter:

Aligning Meaning with Means vs Aligning Means with Meaning

 Perceived Lack is the present:

More is the future

And now is never Enough©

Stipulating

• Yes, when there is no means survival is meaning, the meaning is where do I get lunch and dinner
• Maslow’s hierarchy indicates one first has to meet their material survival needs
• The fear of outliving one’s money (means) supersedes meaning for most if not all
• Mitch Anthony coined the phrase in financial planning ‘aligning means with meaning.’
• ENOUGH(sm) Jewish Personal Financial Planning in contrast is: aligning meaning with means to and toward Shaddai (in Hebrew ‘God, God Almighty, God All Sufficient, Enough) via healing personal financial anxiety, putting money in its place to transcend, elevate, connect and align to one’s assignment and significance - what one was meant to do, meant to be - enough to live for, enough to live on - the soul of the matter to spiritualize the material and materialize the spiritual.(c)

 Given the aforementioned, per the late comedian Sam Levinson, ‘I finally got the means to the end - and they moved the ends apart.’

As a consequence of perceived lack, its primary derivative acquisition and secondary by product is the relentless seeking of more, more, more, and thus it is not unusual to hear  to hear the ‘then I’ll’s’ after ‘when I get mine.’ The “then I’ll’s” -have a habit of the ends (the goal posts) keep moving apart in the ‘aligning means with meaning’ construct - though well intended.

Aligning means with meaning inherently is susceptible to solve perceived lack number 1 and perceived lack #2 is promoted. Furthermore, without meaning as the priority, there seems to always be a new risk that is promoted - especially the high high serious potential problem that is low low low risk

Stipulating the following is an extreme example - a very wealthy individual (having more than enough as defined, diversified etc) created a place in Australia that would be self sufficient with crops, water etc etc. After 20 years the place was finished - self sufficient - with its own crop - only for parrots to wipe out the crops. To paraphrase a Talmudic saying, ‘man plans, God laughs’ and parrots are peckers.

Aligning means with meaning - where means has priority and the  inclination of becoming the end itself - rationalized by I’ll get mine and ‘then I’ll’ - a Sisyphusian continued never ending quest of if only, if only, if only…

There is always something - and yet we give ourselves - no credit for our adaptability and resourcefulness that from God given capacities we developed into capabilities that yield the assets in our care. Thus, we give our trust to money more than ourselves let alone God who gave us the capacities to yield the currency. (Note & proof: while goodwill is given asset value on a corporate balance sheet - human capital in terms of adaptability and resourcefulness is not credited whatsoever!)

 When one knows the why (meaning IN one’s life INside out) the how becomes less stifling and overwhelming perceived I can’ts. Aligning meaning with means climbs the mountain; aligning means with meaning mining the mountain

In the ENOUGH(sm) Jewish Personal Financial Planning process of  aligning meaning with means - meaning is established first then  ‘means testing’: determining the viability & feasibility of means to support meaning assuming the required personal financial goals are on track or met.

        Thus, in the ENOUGH(sm) Jewish Personal Financial Planning process of aligning meaning with means is means testing for meaning - rather than means for meaning supporting ‘then I’lls’ only after ‘I get mine.’ Note: isn’t it interesting the spelling of the ‘I’lls’ in “then I’IIs” corresponds to ill.

this land is mind, you are but wayfarers/sojourners 

Leviticus

 ENOUGH(sm) Jewish Personal Financial Planning Besides assumes wanting what we have in our possession not that we don’ t own but rather we are just at best caretakers to OWN UP To that which is in our possession during our short stay in this life

Man has a will to meaning

Viktor Frankl

          The label “Personal Financial Planning” is not only a misnomer but presented as a title out of sequence with reality of the practice. The sequence of the description should be Financial Planning applied to Personally Held Assets.

“Surprise, Surprise!”

as Jim Nabors as Gomer Pyle would say to Sergeant Carter

(per the ‘70’s tv series)

          With the demographic shift instead of 35 people working for 1 retiree to now 3 working for 1, and the natural progression of commoditization of financial product and services, there has been and will continue to be compression of ‘personal’ financial compensation.’ The ‘personal financial compensation’ model and method impacted the most is AUM - charging a percentage of ‘assets under management.’

          “Personal” Financial Planners in response to the fear of  percentage reduction (compression), all of a sudden, ‘surprise, surprise -Stg Carter’ are discovering goals based planning, holistic planning - focusing on what is required to achieve each goal rather than external comparisons to the Dow Jones or S&P averages. (Quite frankly, personal financial planning is about managing goals not assets - which one, what kind - or how one did relative to the Dow. This goals based planning ‘conversion’ - ‘born again so to speak’ putting the person back in personal financial planning is reminiscent of the politicians that change his or her position - in light of deteriorating polls in also known as ‘an election year conversion.’

          Aligning means with meaning (or variation thereof) is but - rebranding especially out of fear of reduced asset under management percentage compensation. Lacking specific outputs and action plans for meaning INside out with the client, this so called life planning is but, for want of a better description, ‘yakked yak - I’m your best friend’ planning to give the perception of ‘value added.’

          Without clear & accountable step by step process approach for aligning meaning with means - connecting means with meaning is disguised reversion & revision to the means - moving the goal posts in a Sam Levinson with a Sisyphusian chaser manner.

CHEWish On This©

The Soul of the Matter

          Refined for and per the Judaism On Purpose™ process model meaning guidepath is the Personal Prospectus from the ENOUGH(sm) process now titled Remember Me: The Soul Resume. (see the book Judaism On Purpose). And to give context below is the process of Judaism On Purpose™. Note aligning meaning with means is the last module - having quarried for meaning thru the modules of Jews of Meaning, Remember Me, The Ethical Will, Why I Am A Jew, The 1^st to be 2^nd Bar/Bat Mitzvah (having found oneself in Torah).(see www.rabbisjudaismonpurpose.com full discussion.

          Note: the Judaism On Purpose™ process can be applied to other religions.

          Bottom line (‘the soul of the matter”): aligning meaning with means - to count - the soul of the matter.

Risk Capacity & Fallacy of 'Risk Tolerance'

 

Risk Capacity

Stipulations

 

• Risk tolerance scales are worthless. Risk is a game by Parker Brothers. Inclination predicted scorecards (if they had them) would have a lower rating for accuracy than Anthony Fauci (with excuses and denials optional).
• Sequence of rate of return risk has been addressed in other writing
• Most confuse volatility as risk (which is why qualified by the question of Enough as determined per each goal) at least 2 years of cash – money markets etc – as there seems to be an inverse relationship between high client risk bravado relative to investable assets when things are ‘good’ and greater fear and anxiety when things go down. Thus, the idea is to minimize whip sawing by the cushion by ‘this is different, this time.’

           Risk is not making one’s goals – in particular the clientele realizable goal and their determined payoffs. Risk capacity is the willingness to readjust one’s personal financial goals – in non euphemistic terms – get less – and trade off.

          More often than not, usually Monte Carlo analysis people and especially planners (incentivized by getting compensation by assets under management – the more assets under management the greater the compensation) want 95% - 100% probability. The result: more asset under management for the planner (for sure), a higher probability of an larger estate (assets for members of the lucky sperm and ovarian club), and usually less spending (out of fear of outliving their money) by the clients.

 There are no solutions only tradeoffs 

Professor Thomas Sowell

           Other than if the assets on a net worth/balance sheet were inherited, the net worth is a result of human capital (income less consumption and taxes) reinvested for investment capital. No where on personal balance sheets is the recognition of the human capital asset of adaptability and resourcefulness. (Note for those reading and saying right now – but I was younger then, but, but, but).

          We given little or no value to our resourcefulness to adapt and therefore (without the question of More vs Enough aside) 100% is sought at the expense of denying (even if one has more than Enough).

          So the question is risk capacity – is one on Monte Carlo will to take an 80% probability of success – a 20% adjustment if necessary? What is the tradeoff?

          Now when I was in practice – I required spending plans (a nice word for budgets) not just presently, but projected upon disability, slowing down, retirement and for the spouse if the client predeceased. Furthermore, the categories were broken down into:

• Fixed monthly
• Flexible monthly
• Irregular Expenditures
• Estimated taxes
  

Irregular expenses  (may be fixed – i.e. homeowners insurance, etc) but otherwise offer the most flexibility to reduce. Flexible monthly offer some potential for reduction (i.e. the cable etc bill). Of course, the degree or amount depend on the goal – if disabled, long term care, slow down, retirement, spouse income adequacy. Furthermore, the retirement objective should be broken down into three periods – go/go; slow go; no go. And yes, health expenditures go up in fixed and flexible but other costs depending on the period would go down.

By doing the budgets per objective – one can estimate the degree of flexibility –risk/adjustment capacity – to therefore determine 80%, 85%, 90% etc of what one is will to accept for adjustment to have a higher degree of spending.

Enough & Author Joseph Heller of Catch 22

 

Enough & Author Joseph Heller of Catch 22

 

At a party given by a billionaire hedge fund manager, Kurt Vonnegut informed fellow author Joseph Heller of Catch 22 fame, that the hedge fund manager made more money in a single day than Heller earned from all his royalties from Catch-22 .

 

Heller responded, “Yes (that’s true), but I have something he will never have …. ENOUGH.”

 

2.0 UPDATE Bimahs & Managing (Retirement) Goal During Rotation &

 This Tectonic Living & Market Shifts

See Measures for Update

Stipulating

          ENOUGH(sm) is aligning means with meaning to count© and thus derivatively Enough is managing goals primarily rather than assets which is secondary (but means)

          Per a game changing study 80% of the value of the S&P 500 stocks is now in patents, trademarks, trade secrets

 And subject to

• Required income needs – at the gotta, (essential) and oughta (discretionary) but not niceta levels
• Relative to a retirement goal – the amount as if 3 periods (typically with different amounts:
• the go go period, the slow go period, and the no go period.
• Measures
• Baseline (where at if do nothing) probability % of achieving the goal(s) per Monte Carlo;
• Monte Carlo trigger short fall % of success (The Monte Python i.e 80%) to readjust the goal(s)
• The desired Monte Carlo probability of success (The Full Monte) (which is subject to readjustment (i.e. amount of goal after tax, when start, duration, assumed after tax rate of return, and inflation) should the Monte Python trigger occur
•  

A Retirement Portfolio Idea Subject To The Above

          Musts before consideration of allocation

·         2-7 years of cash and near cash (remember Joseph and 7 fatter cows and 7 lean emaciated cows) –to minimize whipsawing the portfolio during large up and down swings in the market – resulting in panics – buying at the highs and selling at the lows not to mention the resulting anxiety.

·                Hopefully the home is free and clear – allowing the fallback if necessary to a maximized reverse mortgage annuity for income

Thereafter (to see if this works)

·         20% in tech mutual funds, etfs, etc

·         20% in health mutual funds, etfs

·         20% in value mutual funds, etfs

·         40% in dividend increasing stocks/mutual funds

 The concept:

·         Tech – yes, the valuations are out of sight but tech and rapid obsolescence is the new normal

·         Health – yes, regardless fears of regulation, everybody wants to go to heaven – nobody wants to die – even regulators (health actually is part ‘tech’)

·         20% Value – there is and will be rotation from tech and health and back again

·         40% Dividend increasing stocks, mutual funds, etfs – these are the new bonds.

 Now relative to the old 4% rule (if this is also used as a metric of what can be withdrawn with increases for inflation) – the % of withdrawal is subject to the aforementioned. Decreases (subject to the Measures aforementioned) would occur when the amount withdrawn becomes as a percentage 5% on the remaining assets (i.e. let’s say the portfolio goes down from $1 million to $800,000.) Thus, to bring the percentage back to 4%, the withdrawal amount might require a drop to $32,000 in income. An increase can occur if a 20% gain from the baseline $1 million to $1,200,000. Thus, the 4% (or $40,000) is now but 3.33% so the amount could go to $48,000.

A Story About Going Up and Going Down

           The President of the Temple/Shul often sits on the Bimah (the elevated podium/platform) with the Rabbi.

          Once the Shul President’s term was up and a new Shul President took the former’s place not just as President but also sitting on the Bimah with the Rabbi

          This change didn’t sit well with the old Shul President who made things difficult for the New President even though he knew the rules.

          The moral of the story – it is easier to up to the Bimah than come down from it aka The Bimah Schema

          It is easier to increase spending than to decrease it – regardless of whether in retirement one is in the go-go (pre Covid) phase, slow go, or no go phase of retirement.         

          All the above, of course, is subject to the cascade of the personal financial filter design and cascade previously stated - may make the 4% example unworkable anyway.

An interesting conceptual model to ask your planner about whether one is on the Bimah or not regardless of stage fright or stage one is in.

Evolution: ENOUGH’s(sm) 5 Iterations

 

Evolution: ENOUGH’s(sm) 5 Iterations

 

·                                 Clientele realizable goal determination coordinated with orderly plans for their desired payoffs

 ·                                 A process of connecting personal resources (including money) to support life goals

 ·                     Healing personal financial anxiety, puttin’ money in its place to elevate, transcend, align and connect to one’s significance/assignment what was is meant to do – meant to be, enough to live on, enough to live for

 ENOUGH’s(sm): Jewish Personal Financial Planning

                      Aligning Means with Meaning INside Out ..To Count! 

 

·                                 Aligning means with meaning ---

·                                 healing personal financial anxiety, puttin’ money in its place to elevate, transcend, align and connect to one’s significance/assignment what was is meant to do – meant to be, enough to live on, enough to live for …aligning means with meaning to count

 ·                              Aligning means with meaning INside out

healing personal financial anxiety, puttin’ money in its place to elevate, transcend, align and connect to one’s significance/assignment what was is meant to do – meant to be, enough to live on, enough to live for …aligning means with meaning to count

 Note still, in contrast, ‘More’ is still a never-ending test of worthiness, usually leading to increased personal financial anxiety, and ironically, to less. (as more, better, now – has a habit, in time, of becoming less, worse, later).

ENOUGH(sm): Nachas & Nachos

 

ENOUGH(sm): Nachas & Nachos

Who is rich? One who is happy with his lot. 

Ben Zoma, Ethics of the Fathers

 

Who is rich? He that rejoices in his portion.

Ben Franklin (not related to Ben Zoma)

 Picture 1957 - Lamberton Elementary School in Philadelphia – 1957 – after school – each kid has their report card in hand.

I got 11 A’s and 1 B. Marline L and Alan G got 12 A’s. Both Marlene and Alan made it a point to flaunt their better report card in this 9 year old writer’s face -  metaphorically ‘na na na na na – we’re better – you’re not enough.’

          The proverbial ‘B’ in the bonnet or Philadelphia Phillies baseball cap.

          Whether 8 years of age 9 years of age 40 or 70+ that ‘more-onic’ behavior of ‘I’m more, you’re less’ still persists reinforced by acculturation. (1)

Stipulating:

Enough is Latin is ‘satis’

          Satisfaction is fulfillment, contentment (and also redress)

          Satiated is quenched

          Satisfaction is preferred to satisfactory (which is merely adequate and a ‘C’ on one’s report card which for brethren Jewish kids and parents if equivalent to an F.

          Now the Yiddish Nachas is ‘special joy’ fulfillment, proud enjoyment) (from Hebrew נחת‎ nachat, "relaxation" ((now that the child is no longer living in the basement after college or still a barista at Starbucks). The emphasis of ‘nachas’ when it comes to Jewish kid’s A’s (even better A+s) escalated into almost ecstasy upon the child becoming a ‘doctor’ is proud enjoyment & satisfaction thru reflection on the parent. Typically, nachas is outside in rather than the satisfaction (enough) of INside out ‘enough!’

          However, nachas living thru another (even of one’s lineage) outside in is a sugar high – more excellent nachos than nachas- never enough let alone the satis of satisfaction as ‘enough’ which is an INside out process – aligning means with meaning – again INside out.         

(1)   Ironically, in finance as well as other aspects of life ‘more, better, now’ has a habit of – in time – becoming ‘less, worse, later’ and certainly no guarantee of contentment let alone equanimity.