planning for the future

When We Overcrunch the Numbers

graphic shows a photo of a calculator, graph paper, and glasses, all pixelated

I was recently amused by an online debate among some financial planners. One planner was wondering how to “deal” with a client who wanted to pay off their mortgage early, given that they could invest their extra money instead.

My amusement came from observing those who believed their calculators or spreadsheets could provide a definitive answer to the question. Was it better to make larger mortgage payments or to invest more?

They seemed to confuse their analytical tools with an ability to know the future.

Most argued that the “correct” answer was to invest more rather than pay down the debt, because their tools showed greater ending wealth by doing so. To them, the spreadsheet was the truth. (Usually, they did did at least concede that an emotional insistence to pay off the mortgage might offer the benefit of greater peace of mind.)

None, however, acknowledged that we cannot know the future. Hence there is always uncertainty about the “best” course financially. It is possible that the path to greatest future wealth is via debt reduction, rather than investing more. No one has been to the future and back; there are no guarantees about it either way.

We do know these things: if the future is like the past, chances are one might end with more wealth by investing. And one might reduce uncertainty and increase financial security by paying the mortgage. But we don’t know if the future will be like the past.

The spreadsheet is not the future.

I wonder if there are more interesting questions worth debating… If you have what you need, what is the point of pursuing more? How do you value the feeling of owning a paid-off home? No spreadsheet—and no planner—can answer these questions for you.

Clients, when you’d like to explore the interesting questions, please email us or call. We’ll talk about it.


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The Great Myth of Mind-Reading

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A friend of ours tells the story of an argument they once had with a parent. Both parties got more and more frustrated, realizing that they were not on the same page—and things were only getting more tangled.

Things escalated until the parent threw their hands up helplessly and yelled, “Listen to what I mean, not what I say!”

Funny, huh? Yet it sounds so familiar to many of us.

We do our best here at 228 Main to express ourselves clearly. We want to make our expectations known, to expedite understanding, but we know that words have their limits. When I say “chair,” you may picture a dining chair while I was thinking of a throne! When you say “retirement”… well, see where I’m going with this?

It happens in the financial news, too. Pundits think they can get into the minds of investors, to read each decision as if it were the same as an inner monologue. If anyone could read minds, though, wouldn’t a lot of people be right a little more often?

Instead, we like to remember our limits. How many resentments, how much confusion could be eased if we turned to the important people in our lives and said, “Oops! Forgot… You can’t read my mind.”

We believe an important ground rule for our work is that we will not treat each other as if we’re all mind-readers.

Clients, fair enough? With this in mind, please reach out when you’ve got anything worth mentioning—and we’ll do our best to check our understanding, together.


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When the Problem Is the Problem

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We like to think we are glass half-full kind of people. We are all for due diligence and preparation, but we also remain optimistic that over time, the best possible things can happen. So how do we keep that spirit? The trick is knowing what you’re up against.

We have to be realistic about the problems we face. Sometimes when a problem seems insurmountable, it’s because it is. Volatility in the markets? You might as well fight gravity. It’s part of the deal.

It can’t be a problem because it can’t be solved.

Making sure you have the resources you need to meet your goals? That might be something that we can address—specifically, with some planning, strategy, and arithmetic. And honestly, some hope. If you don’t think your goals are possible, you’re probably right. There’s a world of difference between “Could I…?” and “How could I…?” We just have to stay open to possibility.

The alternative, we think, is pretty unbearable. We’ve watched too many friends waste away fighting things that were out of their control. What if their energy had been given instead to activities they could control? It’s the difference between years of soul-sucking labor and years of life-giving pursuit.

We want you to benefit from the best of our perspective. You might remember we’ve talked about this sort of thing before, as when we cautioned “Don’t Let Your Anchor Drown You.” We’re not promising a rosy path of puppies and rainbows, but we are interested in any outlook that serves us for the long haul.

The obstacles, the possibilities—we’re ready to face all of the above. Thanks for joining us.

Clients, if you’d like to talk more about what this means for you, call or write.

Go Hard, Breathe Easy

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Being calm seems to come easier to some. Maybe it’s a natural disposition, but for some folks we know, they went hard until they could breathe easy.

Many of our friends and clients have what they have as a result of a lifetime of work and savings. They’ve weathered storms and chose to ignore fads. They decided on some goals and set things to work toward those goals.

Those things didn’t happen all at once. But each of us can choose a little hard now to take it easier, later. The costs of deferring pain are sometimes far too high—and we don’t realize it until it’s too late. It’s credit payments that pile up. It’s deferred maintenance that we wake up one morning to discover is now an emergency. It’s a routine that felt too hard to keep up, and now our wellbeing is anything but well.

Is it possible to buy yourself some calm, even in times of challenge? Those may be the best times to invest in some calm.

Keep your emergency savings at a level that feels right for your family. Keep working your plans; make them automatic where possible.

Know that this challenge will not last forever. (In fact, a new best and a new worst will always await us. Such is life.) We can hope that each new challenge will be more meaningful. We can hope each will make us wiser and will cause less damage.

It won’t just happen that way. Some may be born with more calm, but some of us go hard until things aren’t so hard.

Can you work with something hard today? It may help you breathe easier tomorrow. Clients, if you would like to talk about this or anything else, please email us or call.

The Book of Life

© Can Stock Photo / photocreo

Books have chapters, each one a thread that is woven together with the other chapters to tell a story. Characters come and go, things happen, the plot advances. When a character’s part is finished, they do not appear in future chapters.

They were there for a reason; we remember them through the rest of the book. I’ve come to see that life is like that, too.

Our lives are a book with different chapters. In the hardest times, it helps to think there are more chapters out there. It will not always be the way it is now. The current chapter is not the whole book.

And in the best times, the same framework reminds us to be grateful for the moment, for what we have.

The way things unfold for some people, it may seem like half or more of their lives are in a single chapter. When the chapter ends, one might wonder if life is ending. But the chapter is not the book. (Or at least it does not have to be.)

C.S. Lewis noted we cannot go back and change the beginning, but we can start now and change the ending. Our sorrow is that we cannot change the prior chapter, but there is joy in being able to change the next chapter. This is why we make plans for the future!

Clients, if you would like to talk about this or anything else, please email us or call.

What Are We Going To Do With All This Future?

© Can Stock Photo / rbouwman

It is tempting to think of the future as a place of endless possibilities, fulfilled dreams, unleashed potential. “What are we going to do with all this future?” is the work of Spanish artist Coco Capitan, in collaboration with the Gucci fashion brand. It seems to capture that spirit of possibility.

Our work together with you is about the future. But when you get down to it, saying yes to one goal might mean saying no to others. We cannot do everything.

Resources are finite. As we think about retirement destinations or second home locations, choosing a Rocky Mountain high might mean that finding your beach is out of the question. Relocating may mean less time with family. Retiring at a younger age could mean getting by with less money.

This is why we invest so much time in striving to understand and clarify your priorities.

Of course, creative thinking may let us meet apparently contradictory goals by making thoughtful adjustments. A more modest home in one location may free up money to travel other places, or even have a second home. (This is the strategy I employ to live in Floribraska, Florida and Nebraska.)

Clients have chosen to retire and work at the same time by making the retirement-age job a part-time or seasonal or flexible hours arrangement in a field they enjoy.

Some couples choose to spend weeks each year pursuing different interests. Golf in the sunshine is hard to reconcile with watching grandchildren play winter sports up north.

So your own answer to ‘what we are going to do with all this future’ may take a lot of thought to get your priorities defined. Some creativity or adjustments may be needed to make the most of it. This really is the first step in long term planning.

Clients, if you would like to talk about this or anything else, please email us or call.

The End of the World Portfolio

We live in trying times, a recurring feature of our existence.

Our entire investment philosophy is underwritten by a simple fundamental belief: tomorrow will be better than today. We can’t know that this will be true of every single tomorrow, but we’re pretty sure about the long term trend.

Though they say that “past performance does not guarantee future results,” human civilization has a track record thousands of years long of resilience, rebounding from crisis to do better than before. We expect it will continue. Without this belief the idea of investing for the future is meaningless.

We know that there are troubles in the world, with the news full of the virus, death and disruption. People sometimes feel that the latest bad news signals imminent total catastrophe. This isn’t anything new–people have been predicting the end of civilization for the entire span of human history. Yet somehow we’ve always rebounded all the same.

If the most dire predictions ever do come to pass, it isn’t going to matter what investments you own. Your meanest neighbor will be trying to steal your canned goods. So the ideal portfolio for the end of the world is the one that will serve you best in the event that the end of the world fails to show up—again.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Sacrifice or Joy?

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The ability to delay gratification is supposed by some to be the key to reaching our goals. And it seems to make sense.

If one can spend less and save more day by day, greater wealth results over time. Skipping dessert and taking the stairs instead of the elevator over the weeks and months may improve our health over the years and decades.

This framework casts our future welfare as something that contends with current enjoyment of life. “Sacrifice today for a brighter tomorrow,” and all that. It takes willpower to struggle against today’s desires for distant benefits, somewhere down the road.

We believe there is a more productive way to think about this.

The key is to find the immediate gratification hiding inside deferred gratification. If you are broke but begin saving a little bit of money every payday in a systematic way, you have the immediate gratification of changing your trajectory, of moving in the right direction.

Imagine the gratification of getting your act together in the way that most needs it. You have known it needs attention, and its neglect nags at you. Embarking on a plan gives you the immediate gratification of taking action to improve your life.

In short, you can struggle and sacrifice today for benefits in the misty future, or reframe it so that reaching for your goals brings you immediate joy. It’s a matter of the narrative you choose to tell yourself, the framing in your mind.

Clients, if you would like to talk about your goals or anything else, please email us or call.