Slowly and then suddenly… Isn’t that how the big stuff in life seems to happen? But here’s our hot take: that slow growth deserves way more attention than those quick drops. Celebrate what’s worth celebrating.
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Clients, some of you have reported that some people around you are finding it inexplicable that you haven’t yet sold out of the stock market, given its rough times. One of you even heard the prediction, “You’re going to lose it all!” These conversations are happening at coffee time, out to dinner in a group, at every kind of casual gathering.
We often think of peer pressure in connection with children. But there are strong forces at work among not only children: it’s also retirees and everyone in between!
In ambiguous situations, humans tend to copy what other people seem to be doing. If we don’t know what to do, we may assume that others do. So we emulate them. This type of behavior is sometimes referred to as “social proof”: we take our cues from others when we feel unsure what to do.
In some social groups, people react to rough markets by selling out; in other groups, people cling to the long-held belief that investing is too dangerous for anyone. If everybody in your “group” seemed to be doing the same thing, you’d have lots of social proof to reassure you that, surely, you must be on the right path.
But this social influence can hold more weight in our choices than it deserves. Yes, someone marching to a different drummer can seen as a rebuke. The contrary behavior—going against the crowd—is full of resistance. Sometimes it takes a big splashy effort to swim upstream! Hence the hectoring and lecturing.
But we choose our own course, and it does not start or end with what others think about us.
You can see the core principle at work: “avoid stampedes.” We believe this has kept us out of fads—and pointed us to bargains. We think going against the crowd may be profitable, though no guarantees of course.
If your friends hassle you about your investing, be kind to them. You can always change the subject if you need to. Maybe in their mind, fear is in the driver’s seat right now. Or maybe they’re in the grips of peer pressure.
Either way, we know what we’re about. And that’s enough.
Clients, if you would like to talk about this or anything else, please email us or call. You are among the best clients in the world, a group where you may find all the proof you need that being contrary may be a great thing.
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Play the audio version of this post below:
Slow and then suddenly… Isn’t that how the big stuff in life seems to happen? But here’s our hot take: that slow growth deserves way more attention than those quick drops. Celebrate what’s worth celebrating.
Want content like this in your inbox each week? Leave your email here.
Half our staff here at 228Main.com is under 40 years of age, and as you may realize, I’m… not 40.
And I plan to work to 92.
Suffice to say, my “retirement” plan won’t be the right model for everyone. But that doesn’t mean these younger staffers—and many clients their age—aren’t working on their own plans and planning.
A client’s age or generation matter to a certain extent in our line of work. What we’ve noticed, however, is that the most important part is how each person relates to their age.
Think about my goals again. Of course my age is a factor in my planning, but my intention to continue working changes things more. If I were only working for 2 more years, my strategy would require a totally different gear than my plan to earn an income for 20 more years!
Clients, I don’t mean to suggest you need to know your retirement date now—or even have an exact vision of your retirement lifestyle. In fact, what I want to suggest is that it’s okay if it feels like you’re saving for a fuzzy future self.
“But how do I know whether I’m track? I should’ve started years ago, right?” We’ve heard this before.
No guarantees, but if you’ve made it into a conversation where you’re asking someone you trust this question, you’re on your way. From here, it’s about working toward your goals. How your parents retired, how the plan goes in a chart in a pamphlet that gets stuffed into your hand… if you compare your plan to those examples, they can add more anxiety than applicability.
Reframe. Retirement planning is about your goals, your timeline, your lifestyle. No external marker.
Feeling behind? Arianna Huffington calls this sense of a ticking clock being in a “time famine,” a state where “your feeling is that it must be later than you think it is.” Feeling starved for time to do what you need to do is no foundation for a strong plan.
“Yeah but how will I…”
Ooh, good question! That’s where we come in, and we’d be honored to help you shape this vision. Reach out when you’re ready.
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A professor at the Harvard Business School studies the connections between happiness and wealth. Since our immediate business here at 228 Main is wealth, and our primary object as human beings is happiness, we are paying attention.
Michael Norton’s research says there are two main questions people with money ask themselves when thinking about their level of satisfaction or happiness. “Am I doing better than before?” and “Am I doing better than other people?”
We recognize the comparison to others as ‘keeping up with the Joneses,’ don’t we? And always doing better than before implies a treadmill of constant improvement, ignoring the natural ebb and flow of markets, business and the economy. These are high hurdles to happiness.
Somebody somewhere is always doing better than us. And we can never have enough, if we always want more. Perhaps this is why researchers have found that people feel if only they had two or three times as much money as they had, then they would be perfectly happy.
Being the best clients in the world, you as a group are a little different. You possess a certain kind of common sense, a groundedness, that has you considering your happiness in connection with what you need and with your natural aspirations for the future. You understand the “two steps forward, one step back” nature of the markets and economy. (You don’t always like it, but you do understand it.)
One friend quotes her granny on this point: “I have enough, and enough is as good as a feast.” This is sheer genius.
Clients, it is unimaginably more satisfying for us to work with you, instead of the kind of people these researchers talk to. If you would like to talk about this or anything else, please email us or call.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
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