Financial Decisions in an Information-Overload World

info overwhelm

Let’s face it. We live in an age and a culture where information, expert advice, and countless opinions bombard us daily. Within minutes of picking up an iPad or Android we can easily become confused, scattered, and totally overwhelmed on a subject we were feeling pretty confident about just yesterday. This seems to be particularly true when making a financial decision. It starts with the well-intended notion that we ought to first do our research, we should certainly read articles from all the smartest experts, and maybe it’s a good idea to consult with Uncle Jim and Cousin Marge too. And then we’ll have the answer. Only somewhere along our data-finding, information-overload excursion, we lose ourselves and the initial shreds of any real clarity we had to begin with. Now what?

I think there’s a better way and it involves both doing your homework and making decisions from a clear, calm, anxiety-free place. A short case study might help shed some light on the matter. I recently sold my home in Atlanta, relocated to Asheville, and am currently in the market for a new home. But wait, the Wall Street Journal says home prices have jumped significantly in the past year. Should I wait until that cools off? Bond experts say the time to buy is now because mortgage rates are only going higher. Oh no. My dad thinks I should keep renting. What?! You get the idea.

So what’s the solution? How do we use the right information in the right doses all without losing sight of ourselves? After many years of sometimes easy but oftentimes painful lessons, I’ve discovered a few principles that seem to work without fail. Here they are:

Principle #1, stay focused on your “business”. By your “business” I mean things that you can control. Things like doing thorough research (of homes, financial advisors, stocks, etc…), creating and sticking to a budget, improving your knowledge base, etc… It also means staying out of areas that are not your business, i.e. outcomes. In my experience, outcomes are pretty much nobodies’ business and trying to wrestle out a certain result typically leads to stress and anxiety. More on that in Principle #3. Thus, I find it’s best to focus on activities within your control. An important point is to undertake your “business” with gentleness and kindness. If you’re feeling run down or more confused, it’s time to take a break. On the whole, when you stick to your business and enjoy the process, there’s less stress and more clarity – a great place from which to make any decision.

Which leads me to Principle #2: avoid making decisions from a place of anxiety, fear, or urgency. This can be difficult because sometimes we face important and potentially life-changing decisions that seem to go hand-in-hand with stress and anxiety. Although we may believe big decisions are inherently stressful, I’ve found that it’s usually the expectations we put on ourselves to produce a perfect outcome that kicks up all the anxiety. We hold onto the misguided belief that we have to make the best or perfect decision. That we’re not allowed to change our minds if something doesn’t work out, or that we can’t adjust our course as we go. That fact is no one can know how things will turnout, even with the best research and intentions. In that case, big decisions don’t have to be so scary. When we take this perspective it’s much easier to make a decision from a clear, calm place. A place that paradoxically is much more likely to lead to a good outcome.

Finally, principle #3, let go of the outcome. This is hard. Probably the hardest part of the whole darn decision-making process. We want what we want. We are certain that we know that this or that particular result would seriously be the best possible outcome. As much as we genuinely believe our vision of the way things ought to go is the best possible way things could go, attaching to a specific outcome only kicks-up anxiety, fear, and usually a whole lot of stress. I’ve found that in the few instances when I’ve actually let go of the outcome (typically against my will), things turned out better than I could have imagined.

So there you have it, three easy principles to help you make better financial decisions. Use them (or not) as they make sense for your circumstances. But above all, experiment, have fun, and enjoy the process.

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Does Jiro Dream of Retirement Too?

I recently moved to the Asheville area after living in Atlanta for twelve years. Ironically, the seeds of my move started around the time I purchased my very first home in Brookhaven, a charming neighborhood in Atlanta. I say ironically because for the prior ten years I held a fairly good and financially stable job, yet had never considered buying a house. Why not you ask? Well, I wasn’t sure myself until last week when I watched the documentary, “Jiro Dreams of Sushi” – which, by the way, I highly recommend.

Jiro is a world-renowned – – perhaps the world-renowned – – sushi chef, operating a tiny ten-seat restaurant inside one of Tokyo’s hundreds of subway stations. Jiro seemed to have no worries about money as far as I could tell, and at age ninety-something, he wasn’t quite ready to retire either. Something about Jiro, his perspective on- and relationship to his work prompted questions within me, questions about my own career, my relationship to my work, and my dreams for the future. Because as far as I can tell, most of us, myself included, work and save, plan and invest, with the hope and dream of one day retiring so that we no longer have to work. But in Jiro’s case, his work was his dream. It was one and the same. Which really hit a nerve in me and at the same time provided some clarity.

What I realized was that for the ten years prior to buying my first house, despite having a good job that would allow me to do it, my dreams and plans for my future life did not involve doing the work I was doing at the time. Meaning, I was not fully engaged in my career or my life and as a result I was often on the lookout for an escape route – and buying a house would have been a major impediment to escape. The job was a good one, interesting enough, and certainly gave me financial stability, but I believed happiness lived in some other job, at some other firm, pursuing some other career. I became so hungry for change that in 2008 I actually quit my job and moved to France for nine months. Interestingly enough, despite a fantastic, and in many ways, unexpected trip, I came home to find myself in almost exactly the same place. I say almost because while the circumstances, people, and places looked about the same, my perspective had changed.

I returned to my old job, worked with the “old” coworkers, and rented another apartment in the same old city. But having lived across the pond, having had the experiences I had, and having returned, I saw in the end that there actually was no escape. Good news really, because before France I planned and saved my money to escape my life, but after France I planned and saved my money to live more deeply into my life. As a result of this small shift, life and I were much more on the same page. It was in the midst of this shift that I started taking a deeper interest in my work as a financial analyst. I became more curious and engaged, and in turn the work itself grew more engaging and satisfying. A virtuous cycle had begun and continues today. It was when I finally stepped into my life and stopped trying to escape it that a new life, as such, presented itself. Just a year and half after purchasing my first house in Atlanta, a new and exciting career and life opportunity presented itself, and in my dream-city (Asheville), no less.

All this to say, that while planning for retirement, setting goals, and making smart choices are hugely important and necessary components of a satisfying and rewarding retirement, so too is engaging with our current circumstances, in our current jobs, and in our current lives, just as they are today. Thanks Jiro.

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