Financial Satisfaction in Crazy Times

These are crazy times, almost chaotic. Chaos is defined as complete disorder and confusion – and parts of the world and our lives may be nearing that point, or at least feel that way. How does an investor get financial satisfaction in times like these? Carefully and patiently.

“Carefully” can equate to:

  • having a plan that addresses saving, spending, taxes, & investments
  • being able to monitor and adjust the plan, perhaps with an adviser
  • then continually executing the plan.

The “patiently” part can be more difficult and is just as critical.

Storms are temporary and the worst of chaos and volatility will pass – be prepared for an unknown timeframe.

In periods of relative calm for the economy and markets (unlike current times) the plan almost runs by itself. When stresses or excesses are injected into the economy and markets, as in actions by the US Fed, spending by the US government, and spending by Americans in the housing market, the plans of individual investors will need attention and possibly a tweak or two.

A quick note on markets and chaos: markets are designed to function amidst chaos – even though “function” can mean with major volatility and even temporary stoppages. During and following times of major volatility markets gradually (or not-so-gradually) adjust and prices “settle” at levels that reflect expectations of the future. A plan that can be maintained throughout the type of volatility we are currently experiencing canlead to long-term satisfaction.

Two excellent places to start are:

  1. Having a “peace of mind” amount of cash on hand,
  2. Maintaining investment discipline through regular 401k or other saving.

Other ways to gain long-term financial satisfaction center around spending and perspective:

  • Buying an affordable home – nearly no one stays in a “forever home” forever
  • Making responsible investments in renovating a current home
  • Driving affordable cars and SUVs (fully paid-for where possible)
  • Not allowing short-term daily, weekly, and monthly market actions to lead to actions based on fear and panic. Here an adviser can be the difference.
  • Knowing that “storms are temporary”* and the worst of chaos and volatility will pass – be prepared for an unknown timeframe.

Chaos and volatility can be super distracting – and in the case of chaos it can be meant to distract. Having a solid plan and an adviser can maintain focus and lead to financial satisfaction beyond the craziness.

*Alison Levine TEDxMidwest

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