Cleaning Out the Q and A Junk Drawer

Fall has arrived! And as we enjoy our pumpkin spiced latte in 100 degree heat, we use yet another calendar event as a bench mark to evaluate are current standing in life. We check our task list to make sure we are accomplishing what needs to be done. We consider new health trends or hobbies to take up. We go through our wardrobes to get rid of things we no longer wear. We organize our homes to make sure we know where the important things we need our locate.

On the last point, how’s your junk drawer looking? You know that spot in your kitchen or den, with all the ‘stuff’ that doesn’t really coordinate with any of your other stuff. This land of misfit toys contains a lot of items we seem to use most often, even if our lives would barely change if the items went missing.

My junk drawer inspired the topic for this month’s ‘For Your Consideration’. A list of questions that I’m sure everyone has wanted answers to, but are not quite important enough to bring up in a serious financial conversation.

So what follows are some junk drawer questions I have been asked. Questions that don’t really fit into any financial conversation, have useful answer, but wouldn’t affect us much if the answers were not known.

1.) How often should I look at my investment statements?

Answer: Once a year. If you are following a financial plan then the ebs and flows of the financial markets shouldn’t affect your decision making. We recognize that the markets are going to fluctuate, but unless our goals change our plans should not. So there isn’t really a benefit to checking your statements more often. Checking once a year is enough to give you a general idea of how your contributions and/or distributions are affecting your balance and net worth. The fluctuations in your investments are just a characteristic of your accounts, but if you plan correctly, they are neither a detriment or an advantage in the short term.

2.) What financial personalities on social media should I follow?

Answer: If we are going to use the word ‘should’ in the question, then the answer is no one. Everyone on social media has an angle. They are trying to accomplish something with their tweets, or Facebook posts, or Instagram photos, and so on. There is a book to sell, a show to promote, an agenda to push. This is not to say that you shouldn’t seek out people for information, or that following people (and considering their opinions) is wrong. It needs to be understood that the information on social media is, at best, either a generalized point on a subject or an effort to influence the audience. There are certainly things worth reading, but there is nothing loss when social media is avoided entirely.

3.) What about mainstream news? What facts, figures, numbers should I be considering on traditional media sources?

Answer: Things directly relating to your current lifestyle. Watching the pretty graph of the Dow Jones’ daily movement, or GDP statistics is great for the analytic. But it has little immediate value to most viewers. The news that should catch your attention is anything related directly to your everyday life. Tax issues related to your city (e.g. property tax increases, school issues), news directly relating to the company you work for or your profession. The first variable of successful financial planning is controlling your cash flow. Increase your income where possible, control your spending where possible. If there are topics that directly affect your employment, or where your money goes, which is out of your control, these are the topics you that should grab your attention.

4.) Which discretionary expenses are worth ‘the splurge’?

Answer: The expenses that free up your time. Time is money, and if you use your time wisely than paying for services that give you more time should pay for themselves, theoretically. First you must be honest with yourself and consider how you use your free time. Do you use your extra time to find ways to advance your career or education, and hence increase your cash flow? Or, do you use your free time to accomplish the goals that help you reach a level of self-fulfillment? If you use your time wisely than finding ways to increase your available time can be worth the expense. Whether the expense is cleaning services, or a personal assistant, if you can find a way to turn your extra time into extra income or self fulfillment then it’s money well spent.

5.) Should I invest in that thing that guy who I kinda know says is the next big thing?

Answer: Of course not. Yes, there is the unlikely chance that might be the next big thing. But it’s more likely that you are throwing money in the garbage. In fact, it’s usually a safe bet that you can tell the person bragging that they got in on the ground floor of Amazon, or Apple or whatever, that they are lying through their teeth (stock option employees aside). We are talking about the once in a lifetime investment of which 999 out of 1000 fail. There’s room in everyone’s portfolio for chasing investment unicorns, but worrying that you might miss out based on what you overheard on the city bus is not worth your time.

6.) What future event should we be most concerned about financially?

Answer: Artificial intelligence. The topic of late is climate change, and how that may negatively affect the world economy. And while there is certainly a reason to be concerned about how we will need to alter our business practices to keep our planet habitable, and how that will affect our wallets, it is a task in which humans will actually participate and our inventive brains will create a way to profit from our efforts.

However, artificial intelligence has the potential to not only change our economic models but make human participation unnecessary. For the time being, we have robots and automation. Personally, I love robots and automation. It makes things cheap, makes tasks easier to complete and makes the world a bit smaller so that those who are willing can expand their social footprint. But humans are still needed, because we have emotions and empathy (most of us). We relate to each other, and while we need to evolve our way of live over time, we have a need for each other. Services industries will always exist and personalized skills will always be in demand as long as humans have emotions and have trouble acting rationally.

When the robots learn to ‘feel’, and that have the ability to relate to humans and each other. The need for humans to do jobs (all jobs) that a network of robots can do for free……well….that’s a topic my human brain has trouble comprehending.

7.) That was depressing, can you end this post on a positive note? What is there to be happy about?

Answer(s): Sure and Everything! If you look at the microcosm of your life things have their peaks and troughs. Some days we fell like we have everything together and other days we feel like the slightest breeze will floor us. Then we turn on the news and all we see is ‘bad news’ ‘bad news’ ‘bad news’.

But in my opinion, this is the best time to be alive, financially. Goods and services are plentiful and cheap. The average quality of life is better now than a billionaire’s 100 years ago. The medical field has advanced exponentially, and public policy appears on the cusp of catching up. Most importantly, technology and unlimited information is lowering the barrier of entry on many facets of society. The secret to success is becoming much less of a secret. We just need to work on making more people aware of the tools available to them.

Just as long as those robots mind their own business.

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