Deciding under the influence...

Retirement planning - and the broader practice of financial planning - is all about making decisions, often in the face of uncertainty.

Sometimes a lot of uncertainty. 🤷‍♂️

And while I enjoy the “numbers” part of financial planning, what I really love is getting to know and build relationships with humans.

Folks like you.

Because humans - like you and me - are fascinating creatures.

Especially when it comes to making decisions.

And even more so when those decisions involve money. 💰

And this isn’t just about investment or portfolio decisions.

But rather than rattling off an endless list of examples which compare and contrast how people - often in somewhat similar situations - can make radically different choices from one another, let’s instead explore what influences our decisions.

Or, what I’ve begun referring to as “deciding under the influence.”

First of all, look in the mirror.

While there are plenty of external influences that weigh on our financial choices and decisions, the most powerful is the person looking back at you in the mirror.

We each have our own personal history with money that often begins when we’re young children.

Ask yourself: what is your first memory of money?

Was there never enough money growing up?

Did you and your family “feel” poor? Did shopping for school clothes involve a trip to the thrift store instead of the mall?

Or was money plentiful in your family?

Did you feel that you were average or above-average compared to your friends and their families? Did you feel, generally speaking, that you always had what you needed? Or wanted?

If one of the scenarios above resembles your childhood memories around money, think about how that experience - which more often than not forms our beliefs - could impact your money beliefs and decisions today.

Therapists often look to your past to help you make better sense of your present.

And while I’m no therapist, there is a growing profession around financial therapy.

But I do believe it can be informative to consider our past to help us understand why we make the decisions we do today.

But beyond ourselves, what are other influences that impact our financial decisions?

How about:

  • Family - not just when you were growing up, but your family’s influence on you today. Many of us want to live up to the expectations of our parents. Or we subconsciously “compete” with our siblings which can manifest in our financial decisions.

  • Friends - we all want to feel successful, and some of us want to look successful too. We buy bigger homes or nicer cars or go on more lavish vacations, often just so we can post about how great our life is on Instagram.

  • Media - my friend Carl refers to CNBC, Bloomberg, and the other financial media networks as “financial pornography.” I don’t disagree with him. I’ll let you interpret that perspective as you see fit.

  • Co-workers - how do you feel if you see Jane from Human Resources park a brand new BMW in the company parking deck on a random Tuesday? You might not feel anything at all. But, then again, perhaps you wonder how can she afford that? Why can’t I afford that? And that’s often the start of trouble.

This isn’t even close to an exhaustive list of all the influences that impact our financial decisions, both large and small.

But my hope is that this will raise your awareness of how your decisions are rarely, if ever, made in a vacuum without the influence of emotions, psychology, other people, or advertisers.

This isn’t a guaranteed way to make better decisions in the future, but maybe - just maybe - you’ll be more sensitive to whether or not your decisions are truly YOUR decisions.

Or if you’re simply deciding under the influence…


I invite you to review the slide below:

This comes from the JP Morgan “Guide to Retirement” (a great resource for all things retirement-related)

Now, a question: are you focused on the areas in which you have control, or are you instead spending your time and energy on things over which you have no control?

Put more simply, see the Carl Richards sketch from last week’s letter.

Easier said than done, I know.

But something to think about nevertheless…

Tax Law Changes

Suggest you read this piece by Christine Benz for Morningstar titled “Don’t Fret About Tax-Law Changes — Yet”.

This article focuses primarily on proposed changes to the “step-up” in basis on inherited assets which would also subject these assets to capital gains, which might also see some changes.

I don’t know what will happen with taxes, now or in the future, but regardless of what transpires, it’s good to have an understanding of different types of taxes and how they may impact you - on in this case, your heirs - down the road.

Any questions? Let me know.

📱 If Your Phone Could Talk

A friend shared this interesting piece with me from Reddit.

It claims that researchers have determined that the accelerometer sensor in your mobile phone can reveal some surprising things about you including:

  • Your location

  • Passwords

  • Body Features

  • Age

  • Gender

  • Level of intoxication

  • Driving style

  • and more…

No financial lesson here. Just something I found interesting. Maybe you’ll find it interesting as well.

If you’d like to read more, here’s a link to the actual research paper.

An Investing Lesson from Seinfeld

I’ll wrap up this week’s letter with yet another article from Morgan Housel.

He opens his piece with the end of the Seinfeld TV series (probably my favorite TV show of all time).

You should read the article, but Housel goes on to present the case that even a market that feels crazy is simply acting on all the available information and inputs at that point in time.

In other words, it’s just being a market.

One solution is to focus on the idea of “enough.”

Thanks for reading.

Until next Wednesday,


Retirement Planning for Women

Postscript: For this week's indie music track, check out “Maria Tambien” by Khruangbin. 🎵 Apparently “khruangbin” means “airplane” in Thai, which reflects the international influences on their sound. All I know is I’ve been listening to this band a lot lately. And I 💖 it. The video below is an entire live set, all of which is fantastic, but I’ve queued up the video to start at the 35:55 mark which is when they play “Maria Tambien” which is currently my favorite of their songs.

Why indie music? Please read the Postscript of Issue #2 for context.