The role of fate in your financial planning
Change your outlook on the unknowable future...
Good morning,
Today’s story begins in Perry, GA, in 1982.
This was the year that Ernest Greene was born in the small town just south of Macon.
Though you probably don’t recognize the name Ernest Greene, many know Mr. Greene by his stage name “Washed Out.”
I discovered Washed Out’s music many years ago and it served as my introduction to a sub-genre of indie music referred to as “chillwave.”
This wikipedia entry describes chillwave music if you’re interested.
I just know I like Washed Out’s music and often have it and similar music playing in the background while I work.
One of my favorite songs from Washed Out is Amor Fati.
You can listen here:
Loosely translated, Amor Fati is a Latin phrase meaning “love of fate.”
I don’t recall ever hearing this expression before discovering the song above.
And for some reason, it really struck a chord with me. (Pun absolutely intended)
While this topic could easily spiral into the realm of the existential, I think it has a clear and pretty simple application in your personal financial planning.
But first, a question: do you have a “love of fate?”
Or are you so anxious about what tomorrow holds that it keeps you up at night?
In my opinion, this concept exposes a couple of areas where you can potentially adopt “amor fati.” If you haven’t already.
The first is around control.
If you’re focused on things that aren’t in your control, you’re setting yourself up for increased stress and ultimate disappointment. This is true in many areas of life, but especially so with you finances.
If you’re too focused on the future of the markets, interest rates, commodity prices or whether you have an exciting investment idea to talk about with family and friends, I’m afraid you’re inviting unnecessary worry and anxiety into your life.
You can’t control or really even influence any of the above, so why spend time focusing on or worrying about it?
Sure, easier said than done. I get that.
But not impossible, I promise.
Beyond the issue of focusing on things within your control is the flexibility and adaptability of your financial plan.
If you – even with the help of a financial advisor – have developed a financial strategy that relies on a set of assumptions including a “target investment return,” you’re essentially wagering your financial future on a set of numbers that you hope (and perhaps pray) are in the ball park.
Because it’s HIGHLY unlikely your assumptions will be be accurate across the board.
As a result you’ve created a more fragile, rigid personal financial strategy that is more susceptible to the external forces of the market and economy and isn’t designed to provide you with the maximum amount of choice, flexibility and control.
As a result, instead of embracing an uncertain future and having a flexible strategy designed to accommodate new information and make the appropriate adjustments as your life and the world around you changes, many of you and your advisors have setup an inflexible strategy that is difficult to update and adjust.
It’s not designed to give you choices and increase your control over your financial situation.
Maybe you have a financial plan, but you’re not engaged in the process of financial planning.
Yep, there’s a difference. A BIG one.
It’s no wonder that for many of you, there is no amor fati.
There is no love of fate.
You’re frightened (a little or maybe a lot) about an uncertain future because you’re worried about all the things you can’t control and you’ve setup a financial strategy that isn’t designed to accommodate change as your life will inevitably have some surprises along the way.
OK, maybe you don’t need a “love of fate”…
But you don’t need to fear it either!
Thanks for reading…
Until next Wednesday,
Russ