EDITOR NOTE :Confidence & Clarity During Frightful Times, was originally published in 2009 as part of Craig R. Hersch’s Will Power column featured in the Island Sun newspaper of Sanibel, Florida. While some of the economic references reflect the unique challenges of that period, the core guidance remains timeless. Craig is a Florida Bar Board Certified Wills, Trusts & Estates attorney and CPA who shares practical and level-headed insight to help readers manage uncertainty—financial or otherwise—with perspective and purpose.
Insanity is humorously defined as “doing the same thing over and over again, but expecting a different result.” Many of us appear to be going insane with worry over our economic future. But doing the same thing that you’ve always done in response to the daily dose of bad news isn’t going to make your life any better. Let’s review some effective strategies to help ourselves become sane, confident and clear:
Stop Watching 24 Hour Financial News Networks – In a gym that I frequent television screens blast 24 hour financial news. Worried retirees running on treadmills or elliptical machines watch incessantly. I fret that the combination of emotional and physical fatigue will lead someone to suffer a heart attack. Keep in mind that the cable television 24 hour news networks don’t lure you to watch by airing stories about how things might improve over time, or how the deleveraging of Wall Street might actually make surviving companies stronger. In the meantime, you have absolutely no control over the daily stock market gyrations. Why monitor them as closely as you would a sleeping infant with pneumonia?
Don’t Let the Tax Tail Wag the Dog – One retired couple who visited with me recently lost 50% of their life savings since last September. Over the past several years, their financial planner begged them to reallocate their portfolio – as it was too heavily weighted in equities given their age. Their reason for not listening was due to the reluctance of incurring the 15% capital gains tax! While it may be too late to forgo losses on the equity side of your portfolio, don’t allow your brokerage statements to sit on your kitchen table unopened. Open them up. Schedule an appointment with your financial advisor. There are always new pathways available. While you should be aware of tax consequences to any particular strategy, taxes should not be the determining factor in what you decide to do.
Work with Your Team – Work with your team of advisors to plot out a strategy for the next six months to one year. If you aren’t happy with your team, consider replacements. Those do-it-yourselfers who aren’t doing particularly well might consider interviewing several professionals. There are a number of good ones out there. Find a firm or advisor one whose personality meshes well with yours. While you should be conscious of fees, remember that you often get what you pay for. Once you’ve met with your team and decided upon a strategy, implement it. Don’t waste time second guessing yourself. You can certainly adjust your strategy as conditions warrant. Don’t let fear paralyze you. Take affirmative steps now.
Treat Yourself – Starbucks announced that it is closing more than 600 of its stores as consumers cut back on the luxury of a $5 cup of latte. While I’m not advocating that you indulge in senseless spending, don’t always deny yourself. Now is not the time to terminate your health club membership (but don’t watch the cable news – bring your own iPod or something!). Physical exercise is good for body and soul. While an expensive
European vacation might be too much this coming summer, consider visiting friends or loved ones who you miss. Taking a breather from our everyday worries centers us and allows us to focus with greater clarity.
Get Involved in the Community – My mother-in-law always says that she would never trade her own bucket of problems for someone else’s. She’s right – there is always someone else worse off than you are. Find a community outreach program or charitable cause that appeals to you. Give of yourself. You’ll feel better, you won’t waste time worrying about things you can’t control, and you’ll make someone else’s life better as well.
Things Will Improve – Some have told me that they don’t expect to live long enough to see an economic recovery. Except for those currently suffering from a terminal illness, that’s nonsense. Just as the good times couldn’t go on indefinitely, the bad times will also end. We won’t see sharp rises in real estate or the stock market anytime soon, but things will gradually improve. Remember that America remains a strong, vibrant and diversified economy. Our highly educated populace is of the world’s most productive and hard working. If you don’t believe me travel US41 any weekday at 6:00am. You’ll see a whole lot of dedicated people on their way to work, taking their children to school, doing what’s necessary. Confidence will return. Lead this trend, rather than waiting to follow.