Overview: Setting An ENOUGH Personal Financial Goal
Disclaimers:
This is NOT comprehensive personal financial planning. One of the failures of setting personal financial (life) goals in a vaccuum is that you solve one problem and you create two others - like pulling the stray thread of a sweater off only to find the arm of the sweater unwoven.
Basically personal financial goals are a subset of life planning (which is done first otherwise your goals will tend to be created outside in - relative to indexes, the Joneses etc. instead of inside out. For exercises to integrate life planning (mission and values) get my out of print second edition book ENOUGH on Amazon (probably so cheap the shipping is more expensive)
We will only be dealing with Accumulation/Distribution goals during lifetime NOT Asset Conservation (estate planning), Income Conservation (tax planning) nor Asset Protection (typically insurance) goals as there are additional standards required.
Elements of a Personal Financial Goal
Amount
Start Date/End Date - Duration
Rate of Return After Tax Risk Adjusted
Inflation Rate
Cost
Feedback/Monitor & Frequency of Feedback
Responsibility - Primary, Secondary
Amount
The amount of the objective is determined by doing a spending plan (ok - a budget). Basically, other than taxes, I suggest three categories: fixed monthly (mortgage etc), flexible monthly (food, allowance, etc), and irregular expenditures (insurance premiums etc.). Further, I suggest three columns to correspond to each item - gottas (base level absolute requirement), oughtas (somewhat above the gottas) and niceta (luxury) level. Finally, place a couple of other colums relative to each item to designate how the amount of the item increases or decreases upon: disability, slow down period prior to retirement, retirement, death (the expenditure amount if one or the other passes), and divorce (especially if imminent)
Don't bortz – this exercise is critical to give you more control from the chaos you won't admit to.
Start Date/End Date - Duration
Simply, the beginning and ending date (which constitutes duration of the
goal) is the amount of time. Relative to a retirement goal, it makes you
focus in on the uncomfortable prediction of how long you will live. So,
in the case of the retirement goal, add maybe 5 years after you come up
with your expect age of proceeding/graduating to the World to Come.
Rate of Return After Tax Risk Adjusted
It is not what you make but what you keep after tax, after inflation and risk
adjusted. In subsequent blogs, these elements of the goal will be discussed in detail and in the context of your own personal ‘beta’ of your job.
Inflation Rate
A rose is not a rose is not a rose – and there is no such thing as a one inflation rate for all. The inflation rate on a higher education goal is 200%-300% of overall inflation and long term care costs have been rising at 300%+ (over 9% compound). So each goal is modified by the inflation rate relative to the goal and your stage in your life cycle (no not Kawaskis)
Cost
People love to talk about benefits and if anything just wink at the costs of a goal. A cost is a tradeoff. And unlike the feminists of the 1980’s, you can’t have it all. Cost is the mechanism of price – that illustrates your values. You vote your votes with what you will pay. And cost is not just nominal dollars – but opportunities etc.
Feedback/Monitor & Frequency of Feedback
Despite whiney retorts to the contrary, we generally do what is inspected
not what is expected. In place must be monitor to determine if on course,
and make mid course corrections if necessary. At a minimum, quarterly measuring of the metric(s)- standard(s) is preferable.
Responsibility - Primary, Secondary
This isn’t about pin the tail on the donkey or Democrats – but who has responsibility for achievement of the goal, and each particular step. Designation
is where the buck(s) stops. There is no ‘team’ excuse as this is a cop out
resulting in ‘if everyone is responsible, no one is responsible’ excuse.
There you have it. An overview of the elements of a personal financial life
goal. More specifics relative to each element in upcoming weekly blogs.
Wednesday, August 18, 2010
Sunday, August 8, 2010
PART IV: WHAT IS YOUR ENOUGH?
Buying Instead of Being Sold
The heuristic of More Investing is one of rationalization after being sold instead of buying. Think of a funnel on its side sequentially narrowing from left to right illustrating more. The MOREon personal financial planner begins with products, stocks, bonds, saving accounts and the like. Next as the funnel narrows, the planner devises strategies for using those products. (More acquisitions are often impulsive and unfocused because the personal financial planner is pre occupied with the pitch of “make more save more/ which one what kind”- rather than achieving your objectives. Since most personal financial planners are still compensated largely or solely through commissions or assets (way under) management (a soft commission if there ever was one), it is to their financial advantage to actively churn the portfolio (transaction based commissions) or seek more aggressive than necessary investment managers to make more (assets under management compensation). Finally, the funnel narrows to where the planner gives rationalizations for the products and strategies that he or she has chosen for you.
This is tuchass backwards.
With the retro fitting ENOUGH planning, we begin the funnel with your objectives and move through a logical process to align personal resources with those goals. Next comes the strategies, strategies determine the choice of investment vehicles. For each investment considered in the ENOUGH model, we determine the rate of return, after tax, after inflation, risk adjusted. Finally, the funnel is tapered and tightened down to buying is planned and focused. The advantage is that you are no longer cajoled, sold, manipulated or steered; you are in control of our financial planning decisions. Conclusion: the ENOUGH personal financial planning process is almost perfectly reversed relative to the more MOREon model.
What is Your Enough?
He who knows he has enough is rich.
Tao Te Ching
Enough is a deeply personal concept. One man’s floor may well be another man’s ceiling. Nor is enough measured only in dollars and cents. Wealth is also measured as your ability to adjust to circumstances (adaptability and resourcefulness). If one is ‘adaptable and resourceful’ then regardless of currency changes, then he can procure ‘enough.’ Alan Durning asks the provocative question, ‘When does having more cease to add appreciably to human satisfaction? . . . For each of us in the world’s consuming class, asking is essential. Unless we see that more is not always better, our decline will be overwhelmed by our appetites.’
Since most of us are frenetically chasing more, and unable to grasp it, how do we know when we have enough? As Don Robinson said, ‘The weakness of our age is our apparent inability to distinguish our needs from our greeds.’ Because we cannot define enough, we put enough at risk, seeking the financial rainbow and sometimes in the process losing what is truly important to us. We willingly sacrifice, or at least jeopardize, what we truly need to satisfy our greed and what we don’t ‘need.’
So, what is ENOUGH? First of all, ENOUGH is not my attempt to impose my values on my readers as some of the ‘green with envy’ so called enoughers would do. ENOUGH is not a philosophy of restraint or frugality or even fiscal conservatism. In fact, the purpose of my writings hopefully will help you determine what is enough for you, you may well find yourself describing enough as “plenty.” Each person will define enough in his or her own terms and according to personal values. ENOUGH is aligning personal life goals with personal financial resources – enough to live on; enough to live for – towards one’s signification (why I am).
If we already have enough, then why do we want more? Why do we feel so much stress and discontent? Why do so many people survey their lives and proclaim, “I am not satisfied?” To me the answer is obvious - we have not discovered our personal and internal definition of enough. We have not learned the wisdom of Abraham Joshua Heschel that “to have more does not mean to be more.”
Overview of the ENOUGH
He who knows that enough is enough will always have enough.
Lao Tsu
If I am what I have, and if what I have is lost, who then am I?
Erich Fromm
Having just conquered the known world, Alexander the Great went to visit his friend Diogenes. Diogenes was sitting in his open tent, stirring the kettle which contained his lunch. Alexander, speaking from the opening of the tent, said, “Di, guess what? I’ve just conquered the world. Is there anything I can do for you?”
Diogenes continued stirring for a moment, then looked up and said, “could you move to the left? You’re blocking my sun.”
Diogenes, certainly no more on, was able to determine what was enough for him. Alexander, however, reportedly wept when he learned that there were no more worlds to conquer. Again we see that one man’s floor is another’s acoustical tile ceiling (as one former girlfriend complained.) Obviously Alexander had more than his philosopher friend. But who had sufficiency, resourcefulness - adaptability, enough?
True contentment depends not upon what we have; a tub was large enough for Diogenes, but a world was too little for Alexander.
Caleb Colton
Conclusion
I am not suggesting that once you have defined and achieved your personal enough that you stop achieving or aspiring. When your cup is full, you may decide to stop pouring tea, or you may start filling another cup. The point is, you are in control, steering your boat to your objectives. (For those who argue against control with psycho babble invective ‘control freak’ think of the alternative – chaos. Of course there is going with the flow – something dead fish do.) The point is you are managing the planner. You and your resources, may still be manipulated (nudge is the politically correct cover word for manipulation these days) but the probability is less so. For sure you won’t be a victim of ‘fill or kill,’ throw it against the wall see what sticks, or ‘which one, what kind’ financial planning masquerading product or asset under management sales when you have honed down your ‘enough.’
We shall not cease from exploration. And the end of all our exploring will be to arrive where we started and know the place for the first time.
T.S. Eliot, Four Quartets
NEXT: The Series of The Elements of an ENOUGH Objective:
Buying Instead of Being Sold
The heuristic of More Investing is one of rationalization after being sold instead of buying. Think of a funnel on its side sequentially narrowing from left to right illustrating more. The MOREon personal financial planner begins with products, stocks, bonds, saving accounts and the like. Next as the funnel narrows, the planner devises strategies for using those products. (More acquisitions are often impulsive and unfocused because the personal financial planner is pre occupied with the pitch of “make more save more/ which one what kind”- rather than achieving your objectives. Since most personal financial planners are still compensated largely or solely through commissions or assets (way under) management (a soft commission if there ever was one), it is to their financial advantage to actively churn the portfolio (transaction based commissions) or seek more aggressive than necessary investment managers to make more (assets under management compensation). Finally, the funnel narrows to where the planner gives rationalizations for the products and strategies that he or she has chosen for you.
This is tuchass backwards.
With the retro fitting ENOUGH planning, we begin the funnel with your objectives and move through a logical process to align personal resources with those goals. Next comes the strategies, strategies determine the choice of investment vehicles. For each investment considered in the ENOUGH model, we determine the rate of return, after tax, after inflation, risk adjusted. Finally, the funnel is tapered and tightened down to buying is planned and focused. The advantage is that you are no longer cajoled, sold, manipulated or steered; you are in control of our financial planning decisions. Conclusion: the ENOUGH personal financial planning process is almost perfectly reversed relative to the more MOREon model.
What is Your Enough?
He who knows he has enough is rich.
Tao Te Ching
Enough is a deeply personal concept. One man’s floor may well be another man’s ceiling. Nor is enough measured only in dollars and cents. Wealth is also measured as your ability to adjust to circumstances (adaptability and resourcefulness). If one is ‘adaptable and resourceful’ then regardless of currency changes, then he can procure ‘enough.’ Alan Durning asks the provocative question, ‘When does having more cease to add appreciably to human satisfaction? . . . For each of us in the world’s consuming class, asking is essential. Unless we see that more is not always better, our decline will be overwhelmed by our appetites.’
Since most of us are frenetically chasing more, and unable to grasp it, how do we know when we have enough? As Don Robinson said, ‘The weakness of our age is our apparent inability to distinguish our needs from our greeds.’ Because we cannot define enough, we put enough at risk, seeking the financial rainbow and sometimes in the process losing what is truly important to us. We willingly sacrifice, or at least jeopardize, what we truly need to satisfy our greed and what we don’t ‘need.’
So, what is ENOUGH? First of all, ENOUGH is not my attempt to impose my values on my readers as some of the ‘green with envy’ so called enoughers would do. ENOUGH is not a philosophy of restraint or frugality or even fiscal conservatism. In fact, the purpose of my writings hopefully will help you determine what is enough for you, you may well find yourself describing enough as “plenty.” Each person will define enough in his or her own terms and according to personal values. ENOUGH is aligning personal life goals with personal financial resources – enough to live on; enough to live for – towards one’s signification (why I am).
If we already have enough, then why do we want more? Why do we feel so much stress and discontent? Why do so many people survey their lives and proclaim, “I am not satisfied?” To me the answer is obvious - we have not discovered our personal and internal definition of enough. We have not learned the wisdom of Abraham Joshua Heschel that “to have more does not mean to be more.”
Overview of the ENOUGH
He who knows that enough is enough will always have enough.
Lao Tsu
If I am what I have, and if what I have is lost, who then am I?
Erich Fromm
Having just conquered the known world, Alexander the Great went to visit his friend Diogenes. Diogenes was sitting in his open tent, stirring the kettle which contained his lunch. Alexander, speaking from the opening of the tent, said, “Di, guess what? I’ve just conquered the world. Is there anything I can do for you?”
Diogenes continued stirring for a moment, then looked up and said, “could you move to the left? You’re blocking my sun.”
Diogenes, certainly no more on, was able to determine what was enough for him. Alexander, however, reportedly wept when he learned that there were no more worlds to conquer. Again we see that one man’s floor is another’s acoustical tile ceiling (as one former girlfriend complained.) Obviously Alexander had more than his philosopher friend. But who had sufficiency, resourcefulness - adaptability, enough?
True contentment depends not upon what we have; a tub was large enough for Diogenes, but a world was too little for Alexander.
Caleb Colton
Conclusion
I am not suggesting that once you have defined and achieved your personal enough that you stop achieving or aspiring. When your cup is full, you may decide to stop pouring tea, or you may start filling another cup. The point is, you are in control, steering your boat to your objectives. (For those who argue against control with psycho babble invective ‘control freak’ think of the alternative – chaos. Of course there is going with the flow – something dead fish do.) The point is you are managing the planner. You and your resources, may still be manipulated (nudge is the politically correct cover word for manipulation these days) but the probability is less so. For sure you won’t be a victim of ‘fill or kill,’ throw it against the wall see what sticks, or ‘which one, what kind’ financial planning masquerading product or asset under management sales when you have honed down your ‘enough.’
We shall not cease from exploration. And the end of all our exploring will be to arrive where we started and know the place for the first time.
T.S. Eliot, Four Quartets
NEXT: The Series of The Elements of an ENOUGH Objective:
Sunday, August 1, 2010
Part III: The Alternative to More - ENOUGH
Part III: The Alternative to More - ENOUGH
The Ladder to ENOUGH
It must be considered that there is nothing more difficult to carry out, nor doubtful of success, nor more dangerous to handle than to initiate a new order of things.
Machiavelli, The Prince
Enough is enough, and I’ve had enough!
Dr. Seuss, Horton the Elephant
While the more method is not necessarily wrong, there is an alternative - my ENOUGH approach, a derivative application of Managing by Objectives (MBO). My technique seeks to align life goals with personal resources to achieve life goals & values before the practitioner devises an investment strategy for the client. There are plenty of people and organizations eager to impose their investment ideologies on others. Some may define enough as part of their absolutist agenda. (The frugality crowd – ‘green with envy,’ & the faux egalitarian leftists politicos living in 30,000 square foot mansions – Lear Jet liberals who forgot Franklin’s statement, “be your message.”). Nothing could be farther from my ENOUGH approach, an internalized intensely personal process of discovering, defining, prioritizing and re‑evaluating our values and goals. The ENOUGH method seeks to return the person to person‑al financial planning – Personalized Financial Life Planning.
How do we get off the fast track and on to the sanity track? How do we start steering our own course instead of playing a distorted version of - follow the leader, buffeted by the gyrations of the Dow Jones Average, when the leader doesn’t know where we want to go? How do we gain control of our objectives – inside out rather than outside in -without being manipulated by the expert (who doesn’t even do his own personal financial plan let alone business plan?)
The answer is an entirely different model, heuristic or paradigm, the ladder to ENOUGH. In the ENOUGH model, we begin personal financial planning inside‑out, by personally determining our life goals. ENOUGH re‑connects our life goals & values to our personal resources. We no longer allow external values more is good, less is bad - to drive us up the more ladder. We understand that More is an extra material affair that promises ‘more, better, now, but becomes ‘less, worse, later.’ When we decide our goals, we prioritize them, make trade‑offs and create strategies. Then we align our goals with personal financial resources. Each step up the ladder to ENOUGH leads us to our life goals inside out.
Enough to live on; Enough to live for (1)
Warren Buffet
The motivation for advancing on the ladder to ENOUGH is achieving realizable life goals – healing financial anxiety, puttin’ money in it’s place to transcend to one’s significance – ‘enough to live on; enough to live for.’ The ladder to ENOUGH may be more difficult to climb, because it requires difficult decisions. We must ask the question, What Now? What Now demands that we determine goals and priorities. What Now means that we have a purpose beyond that of the make more, save more treadmill. On the ladder to ENOUGH, we begin with decisions about what enough is for us. Then we align our personal resources with life goals and signification. What does ENOUGH do? Consider these benefits:
Seven Benefits of ENOUGH
1. ENOUGH lessens and often heals financial anxiety. First of all, we are not driven by external pressures to seek more in order to be good. Instead, we have the freedom to choose our values and objectives. Freed of the cultural pressure to seek more, we can understand what is important to us and what is enough.
2. ENOUGH enables the individual to reach real‑I‑zable goals. Importantly, “I” decide my mission & goals. ENOUGH planning is merely a strategy to achieve my life goals.
3. ENOUGH is a connecting rope which aligns life goals and personal resources. ENOUGH personal planning saves time and money, because I have designed strategies to achieve specific goals instead of trying any strategy that will yield more.
4. ENOUGH gives each person control to steer, instead of giving someone else the tiller of our boat while we row. The individual chooses personalized financial life objectives and selects strategies best suited for achieving them, instead of being manipulated.
5. At the very least, ENOUGH allows you to assemble your documents and data so you can buy from a personal financial planner instead of being sold, saving money in the process.
#6. ENOUGH allows you to addition by subtraction. When we discussed more, we saw how more’s allure of ‘more, better, now’ more often than not becomes ‘less, worse, and later.’ More is Fatal Addition via An Extra Material Affair. In ENOUGH, we can experience Addition by Subtraction. Consider, for example, the person who selects a smaller salary over a greater one, but who works fewer hours, enjoys the work more. Remember, wealth is more than money. It is also lifestyle, it is time, it is our values. To trade money for values, for equanimity is truly addition by subtraction. What is better, a salary of $50,000 or $60,000 if the first requires 2,000 annual work hours and the second demands 3,000? The answer is that only you can decide. For some, adding 50 percent more work in return for 20 percent more money is Fatal Addition, and they would gladly add 1,000 hours to their lives by subtraction of salary.
#7 ENOUGH offers FUability©. Now that I have your attention & before you and the politically correct police get your panties and untidy whites in an uproar – think about it. ENOUGH yields:
· Increase choice
· Greater control of one’s life
· Minimizes being ‘beholden,’ dependent, or downright taking ‘crap’ (the shove it factor)
· Lowers the potential of compromising one’s principles and therefore character
· Independence – not being dependent (groveling however euphemized – see choice)
· A sustainable standard of living – enough to live on; enough to live on
You may decide to choose an investment with a lower rate of return over a “bargain” with a higher rate of return. Why? Because the risk in the first investment is lower, and you do not want to jeopardize your plan to achieve enough. The first investment may in fact have been a bargain, realizing the higher return. But by subtracting, you added the security to your enough box, reduced your anxiety, and achieved your goal. Furthermore, that “bargain” might surprise you.
In ENOUGH personal financial life planning we always begin with the goal. ENOUGH often leads us to turn down get‑rich schemes, not because we are anti‑profit or even anti‑risk, but for the more fundamental premise – you manage goals NOT assets. The pitch of more ‘which stock, which bond, which one what kind’ rather than managing the goal. A fundamental principle of ENOUGH personal financial life planning: avoid sacrificing what you need for what you don’t need, schmedrick. (Schmedrick – look it up.)
In this world there are only tragedies: One is not getting what one wants, and the other is getting it.
Oscar Wilde
The Enough Box
It is not the man who has too little who is poor, but the one who hankers after more. What difference does it make how much there is laid away in a man’s safe or in his barn, how much head of stock he grazes or how much cash he puts out in interest, if he is always after what is another’s and only counts what he has yet to get, never what he has already. You ask, “What is the proper limit to a person=s wealth?” First, having what is essential. Then, having what is enough.
Lucilius, Letters, tr. Robert Campbell
How many times have we heard stories about entrepreneurs who have made and then lost their fortunes? In fact, they may make and lose several fortunes in their financial careers. They remind us of bulimics of business, gorging and purging and gorging again. They suffer from ego‑ruptcy, risking what they need for what they don’t need (MOREonic behavior)
ENOUGH builds the foundation of personal financial life planning on personal goals, rather than on accumulating more for more’s own sake. Therefore, the futile win‑lose‑win addiction can be replaced with what I call the enough box. Once a goal has been achieved, presuming that the goal is an important value, ENOUGH planning protects, insulates & fortifies that goal (personal financial Ovaltine). Many external events may jeopardize the assets in the enough box, including elder care, divorce, disability, personal guarantees or additional investments which require feeding- the assets which keep on taking. Various strategies allow us to cushion enough to minimize the probability and seriousness of risk factors. One strategy is to never risk enough for what you don’t need - fatal addition which causes subtraction by addition.
The concept of ENOUGH planning tends to push clients toward that the very difficult questions: “What Next?”and What Now? The answer to “What Next/ What Now?” is an objective that we have struggled to identify, prioritize and pursue. The most common way to evade the question is to create a “cushion” after knowing what enough is and where you have to be on the enough track to be on target. Once preservation and diversification of assets for enough have been achieved, clients add padding with a few more investments, “just in case.” The problem is that this stretching of enough to include more can rupture the entire strategy. However, if maintaining the cushion is successful, clients move on to their second line of defense buffers against confronting “What Next, What Now?” Buffered by their false feeling of security, they indulge in vacations or traveling or deferred leisure activities (otherwise known as ‘someday things’) for a while. But when their defenses of fear, pleasure and ignorance are exhausted, they revert to more for the sake of more by re‑defining enough. As Sam Levenson put it, “I finally got the means to the end and they moved the ends farther apart!”
In ENOUGH personal financial life planning, we are involved with developing and completing, not with extruding or distending. We are concerned about our your personal financial wellness. This approach is an alignment process. We help you to focus on one essential question: “Am I meeting my funding requirements for my personal financial life goals which will support my life aims and values?” Your life aims are the “What Now's/What Next’s” that, by habit, most have been trying so hard to evade and too often haven’t a clue about since they have been working too hard to consider it. They are like the man who worked all day to cut down a tree with a dull saw, because he didn’t want to stop working to sharpen the blade (or the man who climbed the ladder to elope with Mary Jane only to discover that the ladder was leaning against Peggy Sue’s house)! When the Dow Jones Industrial Average plummeted 18%+ (508 points) on October 20, 1987, losing more than one fifth of its value, more investors everywhere asked anxiously, “How much have I lost?” My clients, when I was in practice, asked, “Do we still have enough?
Personal financial life planning as a strategy to achieve life goals is the cornerstone of the ENOUGH approach. The knowledge and acceptance of what is enough for you, I believe, contributes to overall wellness – contributes to personal financial life wellness by reducing the free‑floating, culturally‑embedded more anxiety. With more acting as your motivation, there can never be any closure or sense of accomplishment - just a stressful compulsion and you get jettisoned. With ENOUGH your goals are well‑defined and achievable. Furthermore, you are in control of defining your goals and taking action to achieve them (instead of allowing someone to manipulate your portfolio and hoping that you will get more). You can relax and enjoy your life or choose to be anxious. But now it’s your choice.
Case Study:
Becoming Financially Independent of Your
Independent Business
Most Americans, for whatever reason, would like to be financially independent. Many entrepreneurs and owners of closely‑held businesses, at first blush, appear to have achieved financial independence. However, more often than not, they are financially dependent on their independent business - more slave than master, more concentrated than diversified, more illiquid than liquid.
More and more of the owner’s time is spent on things tangential, but necessary to the business. How many times have owners said, ‘I used to know everybody in the place, but no more. I miss long Friday afternoon lunches of pizza and beer and not going back to the office when I was poorer. Now it seems I spend all my time with bankers who have collateralized everything I own. I spend more and more time with lawyers and accountants and less time running the business.’
Yet in the next breath, the entrepreneur/manager will say, “Investments? I haven’t made any money in them - this is the business I know. Besides, I gotta get the accounts receivable down. I needta meet with the accountants and I gotta talk to our lawyers. I gotta meet with the insurers on the increased premiums and decreased coverages and convince my board members to remain even though our liability coverage has holes large enough to drive a Mack truck through. Margery keeps complaining she is a ‘F priority’ (even below Kathy Griffin) and thinks we ought to see the marriage counselor again. If I’m so rich, so independent, why don’t I feel it? Why don’=t I have any cash?"
Skim milk often masquerades as cream. That which we think saves us often strangles us. The brass ring of success and independence often is slavery. As Jack Lemmon said in Save the Tiger, AAll I need is one more good season.@
One more. . . . One more. . . .
How many “independent” business owners have you known going through these throes? How many entrepreneurs do you know who have been on the less than merry‑go‑round of make it, lose it, make it for the third or fourth time, rivaling their divorce count?
One more. . . .
Knowing what is enough may help to get the entrepreneur off the less than merry‑go‑round of more. What is enough? That is a question you will be answering as you progress through my writings and rantings. For the entrepreneur trapped on the more ladder, ENOUGH can relieve the tyranny of more and restore the joy of doing business. How?
ENOUGH is knowing one’s economic “gottas.” The gottas are the absolute requirements - not the oughtas (what you’d like to have) or the nicetas (luxuries). Knowing your real economic gottas makes for the line in the sand where the bank cannot collateralize. Knowing your economic gotta level and having it funded independent of the business can lower anxieties. But ENOUGH requires a change of thinking about how you allocate your personal resources, of which your “baby” -C the business - is just one. Just feeding the baby, “your only good investment,” only starves the rest of the family while reinforcing the more addiction.
ENOUGH may mean deferring the purchase of the latest equipment. (For those approaching retirement it may mean reframing to preservation and distribution rather than growth). It may mean downsizing rather than exposing your entire investment to risk. ENOUGH means insulating your objectives, like your home, and refusing to extend your debt using your home’s equity as collateral, like the entrepreneur who wanted to become financially independent or at least less dependent on his independent business. You need insulation as well for staying power, to ride out economic dips and setbacks. This means rewirement – not necessarily retirement. It does mean having sufficient passive income to provide some percentage (the gotta level) of your standard of living irrespective of the business’s fortunes and the market’s gyrations . It means being active in the business, but not a slave to it. It means that you have time to remember the names of people down the hall and Margery thinking that she is an ‘A’ priority again (okay, B, your dog and the business come first – but she’s at least best in breed). It means long pizza lunches on Friday again, if you choose. It means telling the bank that you have perfect credit and have enjoyed the relationship, but. . . .
Becoming financially independent of your business means - enough already!
(1) Buffet said this in regards to inheritance. This writer is of the opinion, that other than a hand up to help oneself, inheritance by bloodline – hereditary privilege only disables the beneficiary creating of nobility of no-ability, harms society by valuing bloodline over merit, and dissipates resources – talents on loan from God.
The Ladder to ENOUGH
It must be considered that there is nothing more difficult to carry out, nor doubtful of success, nor more dangerous to handle than to initiate a new order of things.
Machiavelli, The Prince
Enough is enough, and I’ve had enough!
Dr. Seuss, Horton the Elephant
While the more method is not necessarily wrong, there is an alternative - my ENOUGH approach, a derivative application of Managing by Objectives (MBO). My technique seeks to align life goals with personal resources to achieve life goals & values before the practitioner devises an investment strategy for the client. There are plenty of people and organizations eager to impose their investment ideologies on others. Some may define enough as part of their absolutist agenda. (The frugality crowd – ‘green with envy,’ & the faux egalitarian leftists politicos living in 30,000 square foot mansions – Lear Jet liberals who forgot Franklin’s statement, “be your message.”). Nothing could be farther from my ENOUGH approach, an internalized intensely personal process of discovering, defining, prioritizing and re‑evaluating our values and goals. The ENOUGH method seeks to return the person to person‑al financial planning – Personalized Financial Life Planning.
How do we get off the fast track and on to the sanity track? How do we start steering our own course instead of playing a distorted version of - follow the leader, buffeted by the gyrations of the Dow Jones Average, when the leader doesn’t know where we want to go? How do we gain control of our objectives – inside out rather than outside in -without being manipulated by the expert (who doesn’t even do his own personal financial plan let alone business plan?)
The answer is an entirely different model, heuristic or paradigm, the ladder to ENOUGH. In the ENOUGH model, we begin personal financial planning inside‑out, by personally determining our life goals. ENOUGH re‑connects our life goals & values to our personal resources. We no longer allow external values more is good, less is bad - to drive us up the more ladder. We understand that More is an extra material affair that promises ‘more, better, now, but becomes ‘less, worse, later.’ When we decide our goals, we prioritize them, make trade‑offs and create strategies. Then we align our goals with personal financial resources. Each step up the ladder to ENOUGH leads us to our life goals inside out.
Enough to live on; Enough to live for (1)
Warren Buffet
The motivation for advancing on the ladder to ENOUGH is achieving realizable life goals – healing financial anxiety, puttin’ money in it’s place to transcend to one’s significance – ‘enough to live on; enough to live for.’ The ladder to ENOUGH may be more difficult to climb, because it requires difficult decisions. We must ask the question, What Now? What Now demands that we determine goals and priorities. What Now means that we have a purpose beyond that of the make more, save more treadmill. On the ladder to ENOUGH, we begin with decisions about what enough is for us. Then we align our personal resources with life goals and signification. What does ENOUGH do? Consider these benefits:
Seven Benefits of ENOUGH
1. ENOUGH lessens and often heals financial anxiety. First of all, we are not driven by external pressures to seek more in order to be good. Instead, we have the freedom to choose our values and objectives. Freed of the cultural pressure to seek more, we can understand what is important to us and what is enough.
2. ENOUGH enables the individual to reach real‑I‑zable goals. Importantly, “I” decide my mission & goals. ENOUGH planning is merely a strategy to achieve my life goals.
3. ENOUGH is a connecting rope which aligns life goals and personal resources. ENOUGH personal planning saves time and money, because I have designed strategies to achieve specific goals instead of trying any strategy that will yield more.
4. ENOUGH gives each person control to steer, instead of giving someone else the tiller of our boat while we row. The individual chooses personalized financial life objectives and selects strategies best suited for achieving them, instead of being manipulated.
5. At the very least, ENOUGH allows you to assemble your documents and data so you can buy from a personal financial planner instead of being sold, saving money in the process.
#6. ENOUGH allows you to addition by subtraction. When we discussed more, we saw how more’s allure of ‘more, better, now’ more often than not becomes ‘less, worse, and later.’ More is Fatal Addition via An Extra Material Affair. In ENOUGH, we can experience Addition by Subtraction. Consider, for example, the person who selects a smaller salary over a greater one, but who works fewer hours, enjoys the work more. Remember, wealth is more than money. It is also lifestyle, it is time, it is our values. To trade money for values, for equanimity is truly addition by subtraction. What is better, a salary of $50,000 or $60,000 if the first requires 2,000 annual work hours and the second demands 3,000? The answer is that only you can decide. For some, adding 50 percent more work in return for 20 percent more money is Fatal Addition, and they would gladly add 1,000 hours to their lives by subtraction of salary.
#7 ENOUGH offers FUability©. Now that I have your attention & before you and the politically correct police get your panties and untidy whites in an uproar – think about it. ENOUGH yields:
· Increase choice
· Greater control of one’s life
· Minimizes being ‘beholden,’ dependent, or downright taking ‘crap’ (the shove it factor)
· Lowers the potential of compromising one’s principles and therefore character
· Independence – not being dependent (groveling however euphemized – see choice)
· A sustainable standard of living – enough to live on; enough to live on
You may decide to choose an investment with a lower rate of return over a “bargain” with a higher rate of return. Why? Because the risk in the first investment is lower, and you do not want to jeopardize your plan to achieve enough. The first investment may in fact have been a bargain, realizing the higher return. But by subtracting, you added the security to your enough box, reduced your anxiety, and achieved your goal. Furthermore, that “bargain” might surprise you.
In ENOUGH personal financial life planning we always begin with the goal. ENOUGH often leads us to turn down get‑rich schemes, not because we are anti‑profit or even anti‑risk, but for the more fundamental premise – you manage goals NOT assets. The pitch of more ‘which stock, which bond, which one what kind’ rather than managing the goal. A fundamental principle of ENOUGH personal financial life planning: avoid sacrificing what you need for what you don’t need, schmedrick. (Schmedrick – look it up.)
In this world there are only tragedies: One is not getting what one wants, and the other is getting it.
Oscar Wilde
The Enough Box
It is not the man who has too little who is poor, but the one who hankers after more. What difference does it make how much there is laid away in a man’s safe or in his barn, how much head of stock he grazes or how much cash he puts out in interest, if he is always after what is another’s and only counts what he has yet to get, never what he has already. You ask, “What is the proper limit to a person=s wealth?” First, having what is essential. Then, having what is enough.
Lucilius, Letters, tr. Robert Campbell
How many times have we heard stories about entrepreneurs who have made and then lost their fortunes? In fact, they may make and lose several fortunes in their financial careers. They remind us of bulimics of business, gorging and purging and gorging again. They suffer from ego‑ruptcy, risking what they need for what they don’t need (MOREonic behavior)
ENOUGH builds the foundation of personal financial life planning on personal goals, rather than on accumulating more for more’s own sake. Therefore, the futile win‑lose‑win addiction can be replaced with what I call the enough box. Once a goal has been achieved, presuming that the goal is an important value, ENOUGH planning protects, insulates & fortifies that goal (personal financial Ovaltine). Many external events may jeopardize the assets in the enough box, including elder care, divorce, disability, personal guarantees or additional investments which require feeding- the assets which keep on taking. Various strategies allow us to cushion enough to minimize the probability and seriousness of risk factors. One strategy is to never risk enough for what you don’t need - fatal addition which causes subtraction by addition.
The concept of ENOUGH planning tends to push clients toward that the very difficult questions: “What Next?”and What Now? The answer to “What Next/ What Now?” is an objective that we have struggled to identify, prioritize and pursue. The most common way to evade the question is to create a “cushion” after knowing what enough is and where you have to be on the enough track to be on target. Once preservation and diversification of assets for enough have been achieved, clients add padding with a few more investments, “just in case.” The problem is that this stretching of enough to include more can rupture the entire strategy. However, if maintaining the cushion is successful, clients move on to their second line of defense buffers against confronting “What Next, What Now?” Buffered by their false feeling of security, they indulge in vacations or traveling or deferred leisure activities (otherwise known as ‘someday things’) for a while. But when their defenses of fear, pleasure and ignorance are exhausted, they revert to more for the sake of more by re‑defining enough. As Sam Levenson put it, “I finally got the means to the end and they moved the ends farther apart!”
In ENOUGH personal financial life planning, we are involved with developing and completing, not with extruding or distending. We are concerned about our your personal financial wellness. This approach is an alignment process. We help you to focus on one essential question: “Am I meeting my funding requirements for my personal financial life goals which will support my life aims and values?” Your life aims are the “What Now's/What Next’s” that, by habit, most have been trying so hard to evade and too often haven’t a clue about since they have been working too hard to consider it. They are like the man who worked all day to cut down a tree with a dull saw, because he didn’t want to stop working to sharpen the blade (or the man who climbed the ladder to elope with Mary Jane only to discover that the ladder was leaning against Peggy Sue’s house)! When the Dow Jones Industrial Average plummeted 18%+ (508 points) on October 20, 1987, losing more than one fifth of its value, more investors everywhere asked anxiously, “How much have I lost?” My clients, when I was in practice, asked, “Do we still have enough?
Personal financial life planning as a strategy to achieve life goals is the cornerstone of the ENOUGH approach. The knowledge and acceptance of what is enough for you, I believe, contributes to overall wellness – contributes to personal financial life wellness by reducing the free‑floating, culturally‑embedded more anxiety. With more acting as your motivation, there can never be any closure or sense of accomplishment - just a stressful compulsion and you get jettisoned. With ENOUGH your goals are well‑defined and achievable. Furthermore, you are in control of defining your goals and taking action to achieve them (instead of allowing someone to manipulate your portfolio and hoping that you will get more). You can relax and enjoy your life or choose to be anxious. But now it’s your choice.
Case Study:
Becoming Financially Independent of Your
Independent Business
Most Americans, for whatever reason, would like to be financially independent. Many entrepreneurs and owners of closely‑held businesses, at first blush, appear to have achieved financial independence. However, more often than not, they are financially dependent on their independent business - more slave than master, more concentrated than diversified, more illiquid than liquid.
More and more of the owner’s time is spent on things tangential, but necessary to the business. How many times have owners said, ‘I used to know everybody in the place, but no more. I miss long Friday afternoon lunches of pizza and beer and not going back to the office when I was poorer. Now it seems I spend all my time with bankers who have collateralized everything I own. I spend more and more time with lawyers and accountants and less time running the business.’
Yet in the next breath, the entrepreneur/manager will say, “Investments? I haven’t made any money in them - this is the business I know. Besides, I gotta get the accounts receivable down. I needta meet with the accountants and I gotta talk to our lawyers. I gotta meet with the insurers on the increased premiums and decreased coverages and convince my board members to remain even though our liability coverage has holes large enough to drive a Mack truck through. Margery keeps complaining she is a ‘F priority’ (even below Kathy Griffin) and thinks we ought to see the marriage counselor again. If I’m so rich, so independent, why don’t I feel it? Why don’=t I have any cash?"
Skim milk often masquerades as cream. That which we think saves us often strangles us. The brass ring of success and independence often is slavery. As Jack Lemmon said in Save the Tiger, AAll I need is one more good season.@
One more. . . . One more. . . .
How many “independent” business owners have you known going through these throes? How many entrepreneurs do you know who have been on the less than merry‑go‑round of make it, lose it, make it for the third or fourth time, rivaling their divorce count?
One more. . . .
Knowing what is enough may help to get the entrepreneur off the less than merry‑go‑round of more. What is enough? That is a question you will be answering as you progress through my writings and rantings. For the entrepreneur trapped on the more ladder, ENOUGH can relieve the tyranny of more and restore the joy of doing business. How?
ENOUGH is knowing one’s economic “gottas.” The gottas are the absolute requirements - not the oughtas (what you’d like to have) or the nicetas (luxuries). Knowing your real economic gottas makes for the line in the sand where the bank cannot collateralize. Knowing your economic gotta level and having it funded independent of the business can lower anxieties. But ENOUGH requires a change of thinking about how you allocate your personal resources, of which your “baby” -C the business - is just one. Just feeding the baby, “your only good investment,” only starves the rest of the family while reinforcing the more addiction.
ENOUGH may mean deferring the purchase of the latest equipment. (For those approaching retirement it may mean reframing to preservation and distribution rather than growth). It may mean downsizing rather than exposing your entire investment to risk. ENOUGH means insulating your objectives, like your home, and refusing to extend your debt using your home’s equity as collateral, like the entrepreneur who wanted to become financially independent or at least less dependent on his independent business. You need insulation as well for staying power, to ride out economic dips and setbacks. This means rewirement – not necessarily retirement. It does mean having sufficient passive income to provide some percentage (the gotta level) of your standard of living irrespective of the business’s fortunes and the market’s gyrations . It means being active in the business, but not a slave to it. It means that you have time to remember the names of people down the hall and Margery thinking that she is an ‘A’ priority again (okay, B, your dog and the business come first – but she’s at least best in breed). It means long pizza lunches on Friday again, if you choose. It means telling the bank that you have perfect credit and have enjoyed the relationship, but. . . .
Becoming financially independent of your business means - enough already!
(1) Buffet said this in regards to inheritance. This writer is of the opinion, that other than a hand up to help oneself, inheritance by bloodline – hereditary privilege only disables the beneficiary creating of nobility of no-ability, harms society by valuing bloodline over merit, and dissipates resources – talents on loan from God.
Sunday, July 25, 2010
Part II The Fundamentally Flawed More Personal Financial Planning Model/Heuristic
The Fundamentally Flawed More Personal Financial Planning Model
Part II
If some is good, more is better.
Anonymous
In more personal financial planning, the planner manipulates our assets. By analogy, the more vacation planner decides if we are going to vacation in Bozeman or Stowe, Des Moines or Paris. If the planner decides on Paris, he's going to be using very different investment strategies than if he decides on Des Moines. The planner selects what train to put us on, and we hope that we're at least getting a bargain for our money. We may end up in Stowe, Vermont in the winter instead of frying rainbow trout in Big Sky country, where we really wanted to be. But we did have a great express train ride didn't we? And it really was a bargain, wasn't it? Certainly it must have been better than Des Moines, although I've never been there. Too bad we don't ski.
Things not worth doing, are not worth doing well.
Evel Knievel
Actually, this example is about the best scenario I can imagine. What if the planner decides to try for the Paris trip, and our high‑risk investment goes belly up? We stay home. In fact, we may not take a vacation for a very long time.
The Case Against More
Most people wouldn't even think of using more vacation planning as I have described it. Yet almost everyone uses more personal financial planning. Our vacation is too special and important to let others decide for us a personal decision involving our values. Our life goals are far more special and important; yet we spend far more time planning our vacation than our financial objectives and willingly trust others to be stewards to manage our resources as they see fit. Our vacation plans come from inside us, not outside in; our life goals should also come from inside‑out. Each individual must decide on life objectives, based on empirically‑validated values. Yet, here again, most of us allow strangers to manage our assets with very little thought to achieving our objectives.
More personal financial planning will even get some people, albeit by accident, where they want to be. But more takes the personal out of Apersonal financial planning. We wouldnt let a travel agent select our vacation, and yet most of us readily let more personal financial planners select the train, the track and the destination of our resources. But what good is a fast train that isn't going where we want to go? As Eric Hoffer said, You can never get enough of what you don't need. If our vacation is special and important and personal, how much moreso are our life goals? More doesn't work for vacation planning and it doesn't work for financial planning.
What has happened is that in our society, our objectives have become disconnected from our resources. We are trying to manage our resources, trying to get more, without knowing or even caring what more is for. We just know that we want more. Our travel has been disconnected from our vacation and we're endlessly riding the train. How do we stop? If we haven't defined goals, how will we know when we have enough? We have gotten on the fast track to acquiring more for the sake of more. We are accelerating, unable to steer, unsure of the destination, yet crying, Faster, faster! as we derail.
Striving for more things leads to the realization that you can never fulfill yourself from the outside.
Dr. Wayne Dyer
Look at the figures in the margin. The first is a fluctuating line. It represents a high‑risk strategy for getting more. It might be a win it, lose it, win it, lose it entrepreneur, a chart of performance at a blackjack table in Las Vegas or performance of a volatile stock. The box represents an objective. In more personal financial planning, strategies come first. Then we attempt to retrofit the strategies to the goals. Notice that sometimes the performance exceeds the need of the objective, and sometimes the strategy falls below it. These two figures represent the bungee‑jumping method of personal financial planning.
If it so easy to see the insanity of more vacation planning, why is it so difficult to see the faults of more financial planning? Part of the answer lies in Thomas Paine's observation about doing the wrong thing for so long that it appears right. Part of the answer lies in our society's incessant indoctrination of consumerism. Part of the answer also lies in the cultural links between more, good and our sense of worthiness.
Our Cultural Bias for More
Our culture has a built‑in linguistic bias in favor of the concept of more. Words like more‑ality and social more‑s suggest that the more we have, the better we are, in both spiritual and financial terms. By middle age, we have read 50,000 ads and seen 350,000 television commercials all about dis‑satisfaction, about wanting more. Let's briefly explore the disturbing and persistent connection between monetary and spiritual values in our vocabulary. Worth, worthy, worthiness, worthwhile all connote ethical values, but we also link them with the financial term net worth. Is a person with little net worth to be considered worthless? In our society worthless doesn't mean without assets, it means Ano good.
God and good are etymologically linked in many languages. In Middle and Old English, for example, both words were spelled god. But good and god are also linked to tangible assets in the phrase goods and services. Are we less or more good morally because we have less or more goods?
What does more mean? It is virtually impossible to define except in relative terms. It is a moving target, like the horizon or a rainbow, that continually recedes from us. Yet as a culture, we suffer from a collective sense of urgency to acquire more, to capture the pot of gold we hope lies under the rainbow. Most of us believe deeply that more means growth, progress, improvement C in short, that more is inherently good. The logical extension of that argument is Midas, who gained more at every touch, but starved to death in his world of solid gold. Seeking more when we already have enough is akin to continuing to pour tea into a cup that is already full. When the cup is full, our strategies must change. But first we must individually create our individual definition of enough.
Unfortunately, most of don't know when our cup is full. The adjective and the noun content both derive from the Latin cognate meaning to contain. We should be content when we are full, when our cup has its full contents. Therefore, we need to understand what enough is for us. Otherwise we may pour more and more into the overflowing cup, spilling out our resources and indeed our very lives. The result? More actually becomes less! (Subtraction by addition.)
The less I had to get, the more I got.
Dr. Dean Ornish
In its most basic etymology, content means held in or held together. The contents of a full cup of tea are held in by the cup. It doesn't make sense to pour in more tea, because more cannot be contained in the full cup. Pouring water into an already filled cup will only spill the contents. More becomes less. This is the less‑on of subtraction by addition. It also doesn't make sense to use a cup which leaks. In ENOUGH, each one of us learns what is plenty, what the cup will hold. Then we attempt to protect those contents in a cup whose leaks are minimized or prevented. ENOUGH is the alignment of personal goals and values (the cup) with our resources (the tea).
In our culture more is addictive, actually limiting our choices. We use more motivation to keep score or because we like the action, or because we feel more worthy. In the words of William James, In our quest for having, we lose our freedom. As more becomes less, we become have beens. More has become the master, not the servant. And Alan Durning, In the final analysis, accepting and living by sufficiency rather than excess offers a return to what is, culturally speaking, the human home: to the ancient order of family, community, good work and good life.
Because more is so closely linked with our sense of inner worth, the alternative paradigm ENOUGH will not be easily established:
. . . the more important the old concept of reality is to a person, the more important it is to his sense of self‑esteem and sense of inner worth , the more tenaciously he will hold on to the old concept and the more insistently he will assimilate, ignore or reject new evidence that conflicts with his old and familiar concept of the world. This behavior is particularly common among very bright people because they can so easily develop and articulate self‑persuasive logic to justify the conclusions they want to keep.
Charles D. Ellis, The Loser's Game
The Ladder to More
When I was a young man, we had 10 cows and we did very well. When I was 30, we had 20 cows and we did not do better. When I was 40, we were barely making it. Now I'm 70. We have 70 cows and we are not making it at all.
Anonymous.
To illustrate the difference between more and ENOUGH, I have developed Aladders@ for the more and the ENOUGH approaches. The more ladder illustrates the endless pursuit for more, based at least in part on the false impression that we are as more‑ally worthy as we are net worth‑y. The ladder for ENOUGH, by contrast, illustrates the aspiration for personal financial wellness as defined by personal life goals and values.
One compelling stimulus to prod us up the more ladder is a dualistic thinking; if I'm not getting more then I must be getting less; if I'm not better, I must be worse; if I'm not good, I must be bad. We are prodded up this ladder just as the train master steered us to our vacation destination. External forces are controlling, steering us, forcing us to stay on track. We are forced to climb rung after rung because we are convinced that more is better.
Shame is the glue that holds the more philosophy together. We accept the dualistic premise that more is good, therefore less is bad. If we are useful, of service, functional - we are right. Today's currency is being right and not being wrong. If we do what is useful, we are right (we get an A) and we are righteous (originally, right‑use‑ness). We feel worthless when we are worth less, so we pursue more. If we get more, we are better; if not, we are worse. Notice how the pernicious process drives us on and on. We feel guilty when we do badly. If I'm not right, I must be wrong, and therefore I feel shame.
As we climb the more ladder, money and external values coincide. I must be useful, or I am useless. (And doesn't everyone want to be useful?) If I am useful, then I am right and righteous. (Notice how more‑ality creeps in?). If I am right and get more, then I am better and a winner. If I do not continue to get more then I get less and I am both worth less and worthless. If I get more, then I am better (if I don't, I'm worse). If I'm better, I'm a winner - not a loser- and winners are good and godly - not bad or evil.
Since there are only two choices offered on the more ladder (more/less; better/worse), we perceive the only sensible choice to be to continue upwards for more and more. Staying on the more financial ladder is really an excuse for avoiding the awkward question, What now?Why am I accumulating more? What are my goals and values? As long as I am on the more ladder, someone must be admiring my accomplishments; someone must think that I'm good and successful. Some day I'll decide on my values and make a commitment to achieve them. For now, just one more time, I want more, even though I don't really know what more is! Isn't that what junkies and compulsive gamblers say? In our quest to be right, good or worthy we succumb to the dictatorship of more.
The poor rich. All they have is money.
Tom Moore
more, more, more what the hell are we all,
morticians?
e. e. cummings
The late humorist George Carlin has developed a comic routine that nicely parallels my more ladder. I've adapted it, calling it the Full of Stuff Ladder. If you are useful and right, you have the right stuff. If you have more, you have double stuff (like the Oreos with double filling). More is better upscale stuff. If you are better you are a winner and you can strut your stuff. If you are a winner, you are good - hot stuff. If you are good, you are god‑ly, and full of stuff.
More Personal Financial Planners
To be culturally consistent, most of the personal financial planners I know sell Amake more, save more. Consequently, I term these planners more‑ons. Personal financial planning, as generally practiced, is merely financial planning applied to personally‑held assets rather than to the client. As a result, the client's goals are overlooked and the client often becomes a casualty. Why? Because they practice personal financial planning from the outside in rather than from the inside out. ENOUGH personal financial planning is an evocative process eliciting values from the client (literally, evocative means calling out of) rather than cramming pre‑packaged Astuff@ into the client. In personal financial planning, one size does not fit all.
I'm not even sure what I want, but that's not the point. It's that I want it right now!
Elvis Costello
End of Part II
Part II
If some is good, more is better.
Anonymous
In more personal financial planning, the planner manipulates our assets. By analogy, the more vacation planner decides if we are going to vacation in Bozeman or Stowe, Des Moines or Paris. If the planner decides on Paris, he's going to be using very different investment strategies than if he decides on Des Moines. The planner selects what train to put us on, and we hope that we're at least getting a bargain for our money. We may end up in Stowe, Vermont in the winter instead of frying rainbow trout in Big Sky country, where we really wanted to be. But we did have a great express train ride didn't we? And it really was a bargain, wasn't it? Certainly it must have been better than Des Moines, although I've never been there. Too bad we don't ski.
Things not worth doing, are not worth doing well.
Evel Knievel
Actually, this example is about the best scenario I can imagine. What if the planner decides to try for the Paris trip, and our high‑risk investment goes belly up? We stay home. In fact, we may not take a vacation for a very long time.
The Case Against More
Most people wouldn't even think of using more vacation planning as I have described it. Yet almost everyone uses more personal financial planning. Our vacation is too special and important to let others decide for us a personal decision involving our values. Our life goals are far more special and important; yet we spend far more time planning our vacation than our financial objectives and willingly trust others to be stewards to manage our resources as they see fit. Our vacation plans come from inside us, not outside in; our life goals should also come from inside‑out. Each individual must decide on life objectives, based on empirically‑validated values. Yet, here again, most of us allow strangers to manage our assets with very little thought to achieving our objectives.
More personal financial planning will even get some people, albeit by accident, where they want to be. But more takes the personal out of Apersonal financial planning. We wouldnt let a travel agent select our vacation, and yet most of us readily let more personal financial planners select the train, the track and the destination of our resources. But what good is a fast train that isn't going where we want to go? As Eric Hoffer said, You can never get enough of what you don't need. If our vacation is special and important and personal, how much moreso are our life goals? More doesn't work for vacation planning and it doesn't work for financial planning.
What has happened is that in our society, our objectives have become disconnected from our resources. We are trying to manage our resources, trying to get more, without knowing or even caring what more is for. We just know that we want more. Our travel has been disconnected from our vacation and we're endlessly riding the train. How do we stop? If we haven't defined goals, how will we know when we have enough? We have gotten on the fast track to acquiring more for the sake of more. We are accelerating, unable to steer, unsure of the destination, yet crying, Faster, faster! as we derail.
Striving for more things leads to the realization that you can never fulfill yourself from the outside.
Dr. Wayne Dyer
Look at the figures in the margin. The first is a fluctuating line. It represents a high‑risk strategy for getting more. It might be a win it, lose it, win it, lose it entrepreneur, a chart of performance at a blackjack table in Las Vegas or performance of a volatile stock. The box represents an objective. In more personal financial planning, strategies come first. Then we attempt to retrofit the strategies to the goals. Notice that sometimes the performance exceeds the need of the objective, and sometimes the strategy falls below it. These two figures represent the bungee‑jumping method of personal financial planning.
If it so easy to see the insanity of more vacation planning, why is it so difficult to see the faults of more financial planning? Part of the answer lies in Thomas Paine's observation about doing the wrong thing for so long that it appears right. Part of the answer lies in our society's incessant indoctrination of consumerism. Part of the answer also lies in the cultural links between more, good and our sense of worthiness.
Our Cultural Bias for More
Our culture has a built‑in linguistic bias in favor of the concept of more. Words like more‑ality and social more‑s suggest that the more we have, the better we are, in both spiritual and financial terms. By middle age, we have read 50,000 ads and seen 350,000 television commercials all about dis‑satisfaction, about wanting more. Let's briefly explore the disturbing and persistent connection between monetary and spiritual values in our vocabulary. Worth, worthy, worthiness, worthwhile all connote ethical values, but we also link them with the financial term net worth. Is a person with little net worth to be considered worthless? In our society worthless doesn't mean without assets, it means Ano good.
God and good are etymologically linked in many languages. In Middle and Old English, for example, both words were spelled god. But good and god are also linked to tangible assets in the phrase goods and services. Are we less or more good morally because we have less or more goods?
What does more mean? It is virtually impossible to define except in relative terms. It is a moving target, like the horizon or a rainbow, that continually recedes from us. Yet as a culture, we suffer from a collective sense of urgency to acquire more, to capture the pot of gold we hope lies under the rainbow. Most of us believe deeply that more means growth, progress, improvement C in short, that more is inherently good. The logical extension of that argument is Midas, who gained more at every touch, but starved to death in his world of solid gold. Seeking more when we already have enough is akin to continuing to pour tea into a cup that is already full. When the cup is full, our strategies must change. But first we must individually create our individual definition of enough.
Unfortunately, most of don't know when our cup is full. The adjective and the noun content both derive from the Latin cognate meaning to contain. We should be content when we are full, when our cup has its full contents. Therefore, we need to understand what enough is for us. Otherwise we may pour more and more into the overflowing cup, spilling out our resources and indeed our very lives. The result? More actually becomes less! (Subtraction by addition.)
The less I had to get, the more I got.
Dr. Dean Ornish
In its most basic etymology, content means held in or held together. The contents of a full cup of tea are held in by the cup. It doesn't make sense to pour in more tea, because more cannot be contained in the full cup. Pouring water into an already filled cup will only spill the contents. More becomes less. This is the less‑on of subtraction by addition. It also doesn't make sense to use a cup which leaks. In ENOUGH, each one of us learns what is plenty, what the cup will hold. Then we attempt to protect those contents in a cup whose leaks are minimized or prevented. ENOUGH is the alignment of personal goals and values (the cup) with our resources (the tea).
In our culture more is addictive, actually limiting our choices. We use more motivation to keep score or because we like the action, or because we feel more worthy. In the words of William James, In our quest for having, we lose our freedom. As more becomes less, we become have beens. More has become the master, not the servant. And Alan Durning, In the final analysis, accepting and living by sufficiency rather than excess offers a return to what is, culturally speaking, the human home: to the ancient order of family, community, good work and good life.
Because more is so closely linked with our sense of inner worth, the alternative paradigm ENOUGH will not be easily established:
. . . the more important the old concept of reality is to a person, the more important it is to his sense of self‑esteem and sense of inner worth , the more tenaciously he will hold on to the old concept and the more insistently he will assimilate, ignore or reject new evidence that conflicts with his old and familiar concept of the world. This behavior is particularly common among very bright people because they can so easily develop and articulate self‑persuasive logic to justify the conclusions they want to keep.
Charles D. Ellis, The Loser's Game
The Ladder to More
When I was a young man, we had 10 cows and we did very well. When I was 30, we had 20 cows and we did not do better. When I was 40, we were barely making it. Now I'm 70. We have 70 cows and we are not making it at all.
Anonymous.
To illustrate the difference between more and ENOUGH, I have developed Aladders@ for the more and the ENOUGH approaches. The more ladder illustrates the endless pursuit for more, based at least in part on the false impression that we are as more‑ally worthy as we are net worth‑y. The ladder for ENOUGH, by contrast, illustrates the aspiration for personal financial wellness as defined by personal life goals and values.
One compelling stimulus to prod us up the more ladder is a dualistic thinking; if I'm not getting more then I must be getting less; if I'm not better, I must be worse; if I'm not good, I must be bad. We are prodded up this ladder just as the train master steered us to our vacation destination. External forces are controlling, steering us, forcing us to stay on track. We are forced to climb rung after rung because we are convinced that more is better.
Shame is the glue that holds the more philosophy together. We accept the dualistic premise that more is good, therefore less is bad. If we are useful, of service, functional - we are right. Today's currency is being right and not being wrong. If we do what is useful, we are right (we get an A) and we are righteous (originally, right‑use‑ness). We feel worthless when we are worth less, so we pursue more. If we get more, we are better; if not, we are worse. Notice how the pernicious process drives us on and on. We feel guilty when we do badly. If I'm not right, I must be wrong, and therefore I feel shame.
As we climb the more ladder, money and external values coincide. I must be useful, or I am useless. (And doesn't everyone want to be useful?) If I am useful, then I am right and righteous. (Notice how more‑ality creeps in?). If I am right and get more, then I am better and a winner. If I do not continue to get more then I get less and I am both worth less and worthless. If I get more, then I am better (if I don't, I'm worse). If I'm better, I'm a winner - not a loser- and winners are good and godly - not bad or evil.
Since there are only two choices offered on the more ladder (more/less; better/worse), we perceive the only sensible choice to be to continue upwards for more and more. Staying on the more financial ladder is really an excuse for avoiding the awkward question, What now?Why am I accumulating more? What are my goals and values? As long as I am on the more ladder, someone must be admiring my accomplishments; someone must think that I'm good and successful. Some day I'll decide on my values and make a commitment to achieve them. For now, just one more time, I want more, even though I don't really know what more is! Isn't that what junkies and compulsive gamblers say? In our quest to be right, good or worthy we succumb to the dictatorship of more.
The poor rich. All they have is money.
Tom Moore
more, more, more what the hell are we all,
morticians?
e. e. cummings
The late humorist George Carlin has developed a comic routine that nicely parallels my more ladder. I've adapted it, calling it the Full of Stuff Ladder. If you are useful and right, you have the right stuff. If you have more, you have double stuff (like the Oreos with double filling). More is better upscale stuff. If you are better you are a winner and you can strut your stuff. If you are a winner, you are good - hot stuff. If you are good, you are god‑ly, and full of stuff.
More Personal Financial Planners
To be culturally consistent, most of the personal financial planners I know sell Amake more, save more. Consequently, I term these planners more‑ons. Personal financial planning, as generally practiced, is merely financial planning applied to personally‑held assets rather than to the client. As a result, the client's goals are overlooked and the client often becomes a casualty. Why? Because they practice personal financial planning from the outside in rather than from the inside out. ENOUGH personal financial planning is an evocative process eliciting values from the client (literally, evocative means calling out of) rather than cramming pre‑packaged Astuff@ into the client. In personal financial planning, one size does not fit all.
I'm not even sure what I want, but that's not the point. It's that I want it right now!
Elvis Costello
End of Part II
Saturday, July 17, 2010
Part I More vs Enough A Primer
More Versus ENOUGH
Rich is knowing you have enough.
Kruger, Emotional Business
The cost of a thing is the amount of life which must be exchanged for it.
Thoreau
It is time to start planning for the family vacation. What do you do? Do you consider options, weighing the merits and trade‑offs of each plan? Do you consider the opportunity your vacation will provide for you to enjoy favorite activities? Do you consider modes of transportation? The costs? What the vacation offers the kids? Do you attempt to align your budget with your vacation goals and then make revisions and consider the options again? Once you have decided on a vacation, do you marshall your personal finances, saving for the trip even if it means postponing buying that new set of golf clubs or programmable VCR to bring your vacation goal to realization? Do you ever consult a travel agent to determine costs and compare accommodations? If so, congratulations. You are an ENOUGH vacation planner. ENOUGH vacation planners begin with vacation goals, and then align those goals with their personal resources. Almost everyone, to some degree, is an ENOUGH vacation planner.
Are You Doing ENOUGH Financial Planning?
Most of us are good vacation planners because we determine clear objectives and then plan for them. What about our financial planning? How well have we identified our life goals and financial objectives and planned for them? In the following exercise, the Personal Financial Planning Audit, you will be able to assess how well you have attained specific financial goals. Mark N/A for those categories which do not apply to you. A rating of 1 might mean that you have made no provisions to protect your ability to earn an income in the event of disability. A 5 might mean that you have provided for about half of your income to be replaced, and a 10 could mean that you have protected your entire income in the event of total disability.
When you have completed the audit, circle the ten categories that are most important to you. Then add the score for these ten items. Score:
90‑100 points A
80‑89 points B
70‑79 points C
60‑69 points D
59 or fewer points oops
If you scored an A, congratulations! You are one of the few people I=ve ever met who does not need this book. Give it to a friend.
If you are still reading, you either need this book or you are ignoring my advice. If you want to ignore my advice, go ahead. You paid for the book and can read it if you want to. But I'm assuming that you need this book. In fact, as you work your way through these pages and activities, I am confident that you will discover how much you need it. One of the most interesting activities I do with my clients is to have them complete another Personal Financial Planning Audit after we have gone completely through the ENOUGH personal financial planning process. When you have completed this book, I invite you to repeat this audit. You may be in for a surprise!
Do You Want More?
If you want more, you need this book. I'm not going to tell you how to get more. Instead, I'm going to show you how you can define, in your own terms, what is enough. Once you understand the concept of ENOUGH, you won't have as much anxiety about more.
Case Study:
One November Morning
Note: I have included case studies throughout this book to illustrate a point or concept. If you are task‑oriented and want to move rapidly through the workbook, you may skip these stories, anecdotes and real‑life examples. However, these case studies add an extra dimension of depth and experience to the more expository text. I recommend that you find an appropriate time to read these case studies, a time when you have some moments to be introspective and thoughtful.
It is a leisurely November Sunday morning. We're alone, just my wife and I. The house is strangely quiet since the kids have gone off to college. It's misty and cold outside, barely above freezing, and a trace of snow remains on the ground. I've finished my third cup of coffee; Beth is looking out the window, sipping her Celestial Seasonings tea (Sleepy Time, I think). The window pane is misty with condensation and she draws a tic‑tac‑toe design in the mist.
I sense that something is troubling her. She has been quiet all morning. Is anything wrong? I ask.
No, nothing. Something in that nothing@ says something.
Was it something I did?
Silence. Then abruptly, Beth answers, No, it wasn't you.
Now I'm sure something is wrong. Have I forgotten a birthday? Worse? I scan my catalog of essential dates. Nothing. I badger Beth: Was it something I said? Tell me what is the matter, Beth.
Damnable silence again. But I=m almost afraid to hear what she might have to say.
It was nothing you did, she said quietly, resigned, turning from the tic‑tac‑toe on the window.
I . . . I just wanted . . . more.
What is More?
You will soon discover in this book that you will be defining important concepts like more and ENOUGH according to your own values and standards. In the following exercise, spend two or three minutes filling in the circles with words you associate with more. This activity is called clustering, and is your personal brainstorming session to establish some of your thoughts and attitudes. What do you think of when you think of more?
What is ENOUGH?
Now do the same clustering exercise for ENOUGH. What do you associate with the word enough?
You will have occasion to refer back to these clusters several times as you progress through this book. For now, compare the two clusters and make your own observations and conclusions.
Do You Want to Know How to Manage Your Assets?
If so, you really need this book. I'm not going to show you how to manage your assets. That's what the other guys do. Bookstores are filled with advice on managing money. I am going to show you how to manage your objectives. Once you have determined your objectives, and aligned them with your personal resources, you may want to direct a personal financial planner to provide technical advice to help you buy (but certainly not to be sold). It's okay if the personal financial planner helps to row the boat, but you have to steer.
Why Do We Need a Book on ENOUGH?
That=s a very good question. Answering that question is what this book is all about. You will have a pretty good answer to the question when you have finished this chapter. By the time you have finished your personal prospectus in chapter four, you will have developed your own definition of enough, with thorough empirical knowledge of your personal goals. If you want an answer right now, consider five points:
1. We need a book on ENOUGH because:
The world is too much with us . . .
Getting and spending, we lay waste our powers.
Little we see in Nature that is ours.
Wordsworth
2. We need a book on ENOUGH because we have been hypnotised by the allure of more and because we think that more is, by definition, better. Ironically, as you will soon discover, more is often less.
3. We need a book on ENOUGH because it helps us to examine our life, and as Socrates said, The unexamined life is not worth living. The examined life can be re‑aligned.
4. We need a book on ENOUGH to reduce anxiety. In a 1986 survey, research firm D'Arcy Masius Benton Bowes reported that the number one cause of stress for Americans is financial concerns.
5. We need a book on ENOUGH because we work 2,000 hours or more every year earning money and devote almost no time to keeping it.
Try this exercise:
How old are you? _____
How many years have you worked full‑time? _____
How many hours have you worked? _____
(2080 hours is the standard American work year.)
Now, how many hours have you spent keeping what you have worked so hard to earn (keeping defined as determining your financial objectives and then formulating plans to meet them)?
_____
Now, the important question, which only you can answer B Do you need this book?
_____
What is Misdirected About More?
Let=s imagine that five events are about to occur in your life. By each one, mark a A+ if the event gives you more.
1. 50 percent increase in salary. more? _____
2. Job promotion. more? _____
3. Free vacation. more? _____
4. Offer of partnership in a company. more? _____
5. A cup of tea (favorite drink). more? _____
Did you put a plus sign by all of the above? Maybe the cup of tea wasn't such a great event, but the others were pretty good, weren't they? Let's look at them a little more closely. What if your 50‑percent increase in salary meant that you had to change from a job you really enjoyed and found worthwhile to one that you detested, or where the cost of living was much higher? What if the job promotion meant moving where your child will suffer from her asthma? What if accepting the free vacation would burden you with tax liabilities, or force you to listen to four hours of a time‑sharing sales pitch? What if the partnership risks your personal assets in the event of a lawsuit where the plaintiff prevails? What if you already have a full cup of tea and more will only cause the excess to spill onto your lap?
The point? Accumulating more for more=s sake can be foolish at best and destructive at worst. In the words of Edward Abbey, Growth for growth's sake is the ideology of the cancer cell. Assets have value only as they enable us to achieve our goals. The increase in salary may not offset our deeply‑held belief in the purpose of our work. The benefits of the job promotion and vacation must be weighed against our personal values and our resources. Are we willing to put our home at risk to accept a partnership that might make us rich (or poor)? Even the cup of tea offer has to be weighed against what we have; and in this example, a full cup is enough. More only gets us burned and wet.
By definition, more means addition. Let's consider some examples of more addition.
1. There once was a boy who asked his Zen master how he could learn more. The master handed the boy a cup and began pouring tea. The cup filled and began to overflow, but he continued pouring, as the tea spilled onto the boy's lap. Finally the boy exclaimed, Master, you cannot pour any more tea into the cup! The Zen master smiled and replied, AYou must then empty your cup.
2. What about the doctor who has so over‑financed his retirement, at the expense of other goals, that he has to work a full schedule through age 59 1/2 just because he didn=t know what was enough for retirement?
3. Two people enter a supermarket and win a 10‑minute shopping spree. Shopping carts are lined up for them to use and the manager starts the clock. The first person races up and down the aisles, grabbing everything in sight, enjoying the frantic orgy of greed. The other person spends two minutes writing down favorite foods, some steak and lobster (won't Dad be happy!), Sara Lee cherry cheese cake and Häagen Daz chocolate chocolate chip ice cream. Fresh corn on the cob and let=s not forget the Macadamia nuts. When 10 minutes are up, the first woman has four shopping carts spilling over, one entirely filled with steaks (she will now have to rent a freezer), another with expensive stuff from the delicatessen section. (Too bad nobody in the family likes caviar, pate or smoked sturgeon.) The second woman still has room in the first cart. But she is already planning a dream meal for the family. Which person is most likely to regret that she didn't get more? Which woman most likely perceived that she got enough?
4. What about the woman who gets a 15‑percent pay raise, but has to work every Saturday in addition to her 40‑hour week? True, she gets more, but it cost 20 percent more time for 15 percent more money.
5. What about the man who risks his achieved financial objectives on the chance to get more, by putting up his personal guarantee for his college friend's venture? The investment might double his money, or he could lose it all, sacrificing what he needed for what he didn't.
Yes, more can be a kind of fatal addition. The result is that the roulette wheel of more may become less; it may even cause us to lose everything. Or, the desire for more without our even understanding what more is, may lead us to the sadness of Beth, who just wanted more.
The more we have the less we are.
C Eckhart
more means nothing without a context. That context should be our personal goals and values. Most of us are accomplished vacation planners because we start with goals and work our way through a process of evaluation to aligning our vacation goal with our personal resources. That is exactly what we should do in our personal financial planning: align our personal goals with our personal resources. Yet we use a very different model for financial planning than for vacation planning.
PartI
Rich is knowing you have enough.
Kruger, Emotional Business
The cost of a thing is the amount of life which must be exchanged for it.
Thoreau
It is time to start planning for the family vacation. What do you do? Do you consider options, weighing the merits and trade‑offs of each plan? Do you consider the opportunity your vacation will provide for you to enjoy favorite activities? Do you consider modes of transportation? The costs? What the vacation offers the kids? Do you attempt to align your budget with your vacation goals and then make revisions and consider the options again? Once you have decided on a vacation, do you marshall your personal finances, saving for the trip even if it means postponing buying that new set of golf clubs or programmable VCR to bring your vacation goal to realization? Do you ever consult a travel agent to determine costs and compare accommodations? If so, congratulations. You are an ENOUGH vacation planner. ENOUGH vacation planners begin with vacation goals, and then align those goals with their personal resources. Almost everyone, to some degree, is an ENOUGH vacation planner.
Are You Doing ENOUGH Financial Planning?
Most of us are good vacation planners because we determine clear objectives and then plan for them. What about our financial planning? How well have we identified our life goals and financial objectives and planned for them? In the following exercise, the Personal Financial Planning Audit, you will be able to assess how well you have attained specific financial goals. Mark N/A for those categories which do not apply to you. A rating of 1 might mean that you have made no provisions to protect your ability to earn an income in the event of disability. A 5 might mean that you have provided for about half of your income to be replaced, and a 10 could mean that you have protected your entire income in the event of total disability.
When you have completed the audit, circle the ten categories that are most important to you. Then add the score for these ten items. Score:
90‑100 points A
80‑89 points B
70‑79 points C
60‑69 points D
59 or fewer points oops
If you scored an A, congratulations! You are one of the few people I=ve ever met who does not need this book. Give it to a friend.
If you are still reading, you either need this book or you are ignoring my advice. If you want to ignore my advice, go ahead. You paid for the book and can read it if you want to. But I'm assuming that you need this book. In fact, as you work your way through these pages and activities, I am confident that you will discover how much you need it. One of the most interesting activities I do with my clients is to have them complete another Personal Financial Planning Audit after we have gone completely through the ENOUGH personal financial planning process. When you have completed this book, I invite you to repeat this audit. You may be in for a surprise!
Do You Want More?
If you want more, you need this book. I'm not going to tell you how to get more. Instead, I'm going to show you how you can define, in your own terms, what is enough. Once you understand the concept of ENOUGH, you won't have as much anxiety about more.
Case Study:
One November Morning
Note: I have included case studies throughout this book to illustrate a point or concept. If you are task‑oriented and want to move rapidly through the workbook, you may skip these stories, anecdotes and real‑life examples. However, these case studies add an extra dimension of depth and experience to the more expository text. I recommend that you find an appropriate time to read these case studies, a time when you have some moments to be introspective and thoughtful.
It is a leisurely November Sunday morning. We're alone, just my wife and I. The house is strangely quiet since the kids have gone off to college. It's misty and cold outside, barely above freezing, and a trace of snow remains on the ground. I've finished my third cup of coffee; Beth is looking out the window, sipping her Celestial Seasonings tea (Sleepy Time, I think). The window pane is misty with condensation and she draws a tic‑tac‑toe design in the mist.
I sense that something is troubling her. She has been quiet all morning. Is anything wrong? I ask.
No, nothing. Something in that nothing@ says something.
Was it something I did?
Silence. Then abruptly, Beth answers, No, it wasn't you.
Now I'm sure something is wrong. Have I forgotten a birthday? Worse? I scan my catalog of essential dates. Nothing. I badger Beth: Was it something I said? Tell me what is the matter, Beth.
Damnable silence again. But I=m almost afraid to hear what she might have to say.
It was nothing you did, she said quietly, resigned, turning from the tic‑tac‑toe on the window.
I . . . I just wanted . . . more.
What is More?
You will soon discover in this book that you will be defining important concepts like more and ENOUGH according to your own values and standards. In the following exercise, spend two or three minutes filling in the circles with words you associate with more. This activity is called clustering, and is your personal brainstorming session to establish some of your thoughts and attitudes. What do you think of when you think of more?
What is ENOUGH?
Now do the same clustering exercise for ENOUGH. What do you associate with the word enough?
You will have occasion to refer back to these clusters several times as you progress through this book. For now, compare the two clusters and make your own observations and conclusions.
Do You Want to Know How to Manage Your Assets?
If so, you really need this book. I'm not going to show you how to manage your assets. That's what the other guys do. Bookstores are filled with advice on managing money. I am going to show you how to manage your objectives. Once you have determined your objectives, and aligned them with your personal resources, you may want to direct a personal financial planner to provide technical advice to help you buy (but certainly not to be sold). It's okay if the personal financial planner helps to row the boat, but you have to steer.
Why Do We Need a Book on ENOUGH?
That=s a very good question. Answering that question is what this book is all about. You will have a pretty good answer to the question when you have finished this chapter. By the time you have finished your personal prospectus in chapter four, you will have developed your own definition of enough, with thorough empirical knowledge of your personal goals. If you want an answer right now, consider five points:
1. We need a book on ENOUGH because:
The world is too much with us . . .
Getting and spending, we lay waste our powers.
Little we see in Nature that is ours.
Wordsworth
2. We need a book on ENOUGH because we have been hypnotised by the allure of more and because we think that more is, by definition, better. Ironically, as you will soon discover, more is often less.
3. We need a book on ENOUGH because it helps us to examine our life, and as Socrates said, The unexamined life is not worth living. The examined life can be re‑aligned.
4. We need a book on ENOUGH to reduce anxiety. In a 1986 survey, research firm D'Arcy Masius Benton Bowes reported that the number one cause of stress for Americans is financial concerns.
5. We need a book on ENOUGH because we work 2,000 hours or more every year earning money and devote almost no time to keeping it.
Try this exercise:
How old are you? _____
How many years have you worked full‑time? _____
How many hours have you worked? _____
(2080 hours is the standard American work year.)
Now, how many hours have you spent keeping what you have worked so hard to earn (keeping defined as determining your financial objectives and then formulating plans to meet them)?
_____
Now, the important question, which only you can answer B Do you need this book?
_____
What is Misdirected About More?
Let=s imagine that five events are about to occur in your life. By each one, mark a A+ if the event gives you more.
1. 50 percent increase in salary. more? _____
2. Job promotion. more? _____
3. Free vacation. more? _____
4. Offer of partnership in a company. more? _____
5. A cup of tea (favorite drink). more? _____
Did you put a plus sign by all of the above? Maybe the cup of tea wasn't such a great event, but the others were pretty good, weren't they? Let's look at them a little more closely. What if your 50‑percent increase in salary meant that you had to change from a job you really enjoyed and found worthwhile to one that you detested, or where the cost of living was much higher? What if the job promotion meant moving where your child will suffer from her asthma? What if accepting the free vacation would burden you with tax liabilities, or force you to listen to four hours of a time‑sharing sales pitch? What if the partnership risks your personal assets in the event of a lawsuit where the plaintiff prevails? What if you already have a full cup of tea and more will only cause the excess to spill onto your lap?
The point? Accumulating more for more=s sake can be foolish at best and destructive at worst. In the words of Edward Abbey, Growth for growth's sake is the ideology of the cancer cell. Assets have value only as they enable us to achieve our goals. The increase in salary may not offset our deeply‑held belief in the purpose of our work. The benefits of the job promotion and vacation must be weighed against our personal values and our resources. Are we willing to put our home at risk to accept a partnership that might make us rich (or poor)? Even the cup of tea offer has to be weighed against what we have; and in this example, a full cup is enough. More only gets us burned and wet.
By definition, more means addition. Let's consider some examples of more addition.
1. There once was a boy who asked his Zen master how he could learn more. The master handed the boy a cup and began pouring tea. The cup filled and began to overflow, but he continued pouring, as the tea spilled onto the boy's lap. Finally the boy exclaimed, Master, you cannot pour any more tea into the cup! The Zen master smiled and replied, AYou must then empty your cup.
2. What about the doctor who has so over‑financed his retirement, at the expense of other goals, that he has to work a full schedule through age 59 1/2 just because he didn=t know what was enough for retirement?
3. Two people enter a supermarket and win a 10‑minute shopping spree. Shopping carts are lined up for them to use and the manager starts the clock. The first person races up and down the aisles, grabbing everything in sight, enjoying the frantic orgy of greed. The other person spends two minutes writing down favorite foods, some steak and lobster (won't Dad be happy!), Sara Lee cherry cheese cake and Häagen Daz chocolate chocolate chip ice cream. Fresh corn on the cob and let=s not forget the Macadamia nuts. When 10 minutes are up, the first woman has four shopping carts spilling over, one entirely filled with steaks (she will now have to rent a freezer), another with expensive stuff from the delicatessen section. (Too bad nobody in the family likes caviar, pate or smoked sturgeon.) The second woman still has room in the first cart. But she is already planning a dream meal for the family. Which person is most likely to regret that she didn't get more? Which woman most likely perceived that she got enough?
4. What about the woman who gets a 15‑percent pay raise, but has to work every Saturday in addition to her 40‑hour week? True, she gets more, but it cost 20 percent more time for 15 percent more money.
5. What about the man who risks his achieved financial objectives on the chance to get more, by putting up his personal guarantee for his college friend's venture? The investment might double his money, or he could lose it all, sacrificing what he needed for what he didn't.
Yes, more can be a kind of fatal addition. The result is that the roulette wheel of more may become less; it may even cause us to lose everything. Or, the desire for more without our even understanding what more is, may lead us to the sadness of Beth, who just wanted more.
The more we have the less we are.
C Eckhart
more means nothing without a context. That context should be our personal goals and values. Most of us are accomplished vacation planners because we start with goals and work our way through a process of evaluation to aligning our vacation goal with our personal resources. That is exactly what we should do in our personal financial planning: align our personal goals with our personal resources. Yet we use a very different model for financial planning than for vacation planning.
PartI
Monday, July 12, 2010
More Vs Enough: The Less of Dropping Trowel
More vs Enough: aka Dropping Trowel
“I don’t see how more becomes less”
“I don’t see how more becomes less”
When I did workshops, I demonstrated, using my green thumb, how more better, now became ‘worse, less, and later.’
Necessary for the demonstration was:
· a willing volunteer (preferably a doubting ‘more-on’
· two fistfuls of dirt
· a sprinkling can
· a towel
· a trowel
The demonstrated proceeded as follows:
1. I’d ask the volunteer to put out both hands – into each I would put a good size lump of dirt with the trowel
2. I would sprinkle water onto the dirt in one hand – till it absorbed.
3. Then I would continue to sprinkle water until it became mud
4. Not satisfied, I would continue to sprinkle water until the mud itself was liquid –running through the volunteers
5. Being the kind gentle normal person I am I would then offer my assistance with towel to dry off the first hand
6. Next I would sprinkle water on the dirt in the second hand and stop as soon as it was absorbed by the dirt without it becoming mud or dripping.
I then would turn to the audience and ask (which still stunned and no one would answer), “what is the moral of this demonstration?”
And the moral of the demonstration I would finally tell them, is: more vs enough, more, better, now has a way of becoming less, worse, and later slipping through your fingers.
The response was always an ‘aha’ as if the light went on.
Thus, the ‘less-on’ of ‘more vs enough’ aka trowel and error OR ‘dropping trowel.’
Saturday, July 10, 2010
Original Incompletion & More vs Enough
As this world was created incomplete, so was man.
Original Incompletion.
Man’s assignment is to continue to complete himself (becoming more godly) via his ‘soul curriculum’ and, in doing so, complete the world (spiritualize the material) for re-ascension.
But this incompletion intensifies the fear of extinction causing man to seek physical immortality, in effect, to be God (a quest as old as Babel as new as Richard Branson). The principle strategy to achieve this immortality to extinguish the fear of bodily extinction (or at least palliate it) is acquisition (‘Cain’ as in Cain & Abel, Wells’ Citizen Kane, or Countrywide’s Chairman of the Board).
Acquisition is the framework/filter of action, whether in crass Duddy Kravitz conniving or genteel academic cut throat smiles (least I be redundant) that is fear rather than faith driven. Some Judaic thought finds faith – not courage – to be the opposite of fear as courage is a derivative of faith.
Derived from acquisition compounded by the incorrect feelings of defect/deficiency of incompletion is the never ending ‘if only’ More.
And of course, one ‘more,’ one ‘if only’ solved, another ‘if only,’ ‘more’ is promoted as acquisition cannot buy immortality (though a few vanity monuments).
Where there is no flour, there is no Torah; where there is no Torah there is no flour.
Talmud saying
Talmud saying
Enough balances this material short visit and its exigencies of daily material life in dialectic with faith and remembering our assignment to continue to complete our incompletions. Enough, in and of itself, requires the courage of faith in the face of the daily surrounding tsunami framework of ‘More.’
(The irony is, in time, More becomes less – “more, better, now becomes less, worse, later” and that’s the less-on. Furthermore, as one Rabbi stated, ‘the more possessions, the more worries’ but that’s another story.)
The Enough framework frees man from running up the down escalator of ‘more’ while meeting the requirements of material life during one’s short stay.
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