So often in my line of work, people are searching for how they can fix their finances. Usually, people fall into one of two camps. One knows they have at least one problem they need help solving. The other camp doesn’t have a problem they know of–but they recognize they don’t know what they don’t know.
I am going to focus on camp number two.
This particular crew has a sinking feeling that they could do better. They are convinced that there are special strategies they can learn about to grow and preserve wealth more effectively.
So they seek me out. Like guests at the masquerade ball, they are a classic case of FOMO hidden behind a thin facade of financial responsibility. To be fair, their gut feeling is usually right. There is almost always a way to improve returns, reduce taxes, simplify things, or reduce risk.
However, sometimes my job isn’t fixing these people’s financial problems by finding what is wrong. Sometimes my job is to point out all the good things in their life and help them recognize and celebrate their success. The challenge is to instead show them that nothing is wrong, except perhaps their own self-perception.
In “The Psychology of Money,” a much more readable book than it sounds, Morgan Hausel told the following story:
“At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, “Yes, but I have something he will never have … enough.” Enough. I was stunned by the simple eloquence of that word—stunned for two reasons: first, because I have been given so much in my own life and, second, because Joseph Heller couldn’t have been more accurate. For a critical element of our society, including many of the wealthiest and most powerful among us, there seems to be no limit today on what enough entails.”
Morgan goes on to say the most important and difficult financial skill is to get the goalpost to stop moving. I couldn’t agree more, and might even take it a step beyond finance–it is human nature to want more and more, but the degree to which we can overcome that part of human nature determines how content we are with our lives.
There is, of course, a place for pushing for more. The pursuit of excellence and greater things leads to many of the best things in our lives. Too much satisfaction with the status quo creates complacency and can keep us from becoming our best selves. We just need to keep that in check financially, or wind up chasing after things that don’t bring us happiness.
So how do we balance becoming better with keeping the goalpost from moving too much? We turn to another part of human nature to help us–the nature of habit. If we are deliberate with our habits, we can curate where we push for more and where we decide enough is enough. The novelty of things we don’t have battles with the comfort and familiarity of what we do have, but the power of routine puts up a great fight against lifestyle creep.
Just don’t go too far. The ancient philosopher Epicurus said, “Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for.” I think his overall idea is spot on, but it is okay to want more to an extent.
I remember my college days during the summer sleeping in a locker room and rationing grocery money to ensure there was enough to allow me to train and live off the money I had earned from a work study during the school year. What a glorious feeling it was to come home and know there was plenty of food! And many of you might remember days gone by when you drove unreliable cars because it was all you could afford. For me, buying my first car that didn’t leak oil felt absolutely luxurious (even if it was 78 horsepower and couldn’t fit a car seat). It is okay to want more–as long as the “more” we want truly makes us happier, rather than forcing us to work or spend more for things that don’t bring us joy.
Many of my clients know that I lead our planning conversation with a question: “What does financial success mean to you?”. We start with that because we don’t need more than what that takes. Over time, we revisit that question and compare what we originally said to now two, five, ten years later. It is okay for it to change–indeed, we expect it to change. The key is being able to look back at our original response as a landmark to be sure we are still headed toward a lifestyle that fulfills us.
We don’t want to be the football player trying to kick a 500-yard field goal and forever falling short. It leads to unhappy fans, unhappy coaches, and one unhappy football player.