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Money Misery

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Now that, yet another completely, dreadful Indiana basketball season is in the books, I have had time to reflect, decompress or just become undepressed.  Actually, I’ve had an epiphany: IU hoops and, for that matter, sports, are no longer worth the mental anguish.  There’s no payoff and the spiritual cover charge is too much.  While not too embittered, I’ve come to realize my emotional gas tank is nearing E.  And a season sweep to Purdue is hard on mileage.   Might as well conserve for more important things like family, friends, golf & grilling. I haven’t sworn off sports; I just won’t be invested in the non-wagered events.
 
However, I don’t think I’m alone.  I believe most of us have our poignant white elephants.  Stuff we care too much about which we really have little control over.  Subjectively, I’m bemused by social media & cell phone dependency – most of which have the nutritional value of cotton candy.  Politics are another hot button.  Regardless of your lean, those Friday night wine debates aren’t going to settle trade tariffs or resolve immigration.  Just feels like non-productive, wasted energy.  But disregard my political fumes:  highest office I’ve ever held is VP of Litterbox Sanitation.
 
Finances, however, are a completely different animal.  Many of us feel we have complete command.   But this illusion of control is just that – an illusion.   Sure, we set our budgets, sock away college funds and dollar cost average into retirement plans.   And those are all great habits.   But what about forecasting returns? Economic cycles? Geopolitical events? Or pegging our financial longevity?  Lot of hairpin turns on life's financial highway.
 
How about Central Bankers and interest rates?  They simply set the overnight, bank to bank lending rate.  Longer term rates (think mortgage), are more governed by supply and demand.  And the stock markets react frenetically to every adjustment.  The same goes for the ridiculous Federal Reserve pronouncements every month.  When my mom (TMI)[i] is shushing me during lunch to tune in to this circus, I feel we’ve jumped the shark.   These sound waves provide very little tangible value but we still allow talking heads to play with the economic placebo dials.
 
Speaking of placebos, the City of Los Angeles’ (likely many other cities too) cross walk buttons are purportedly bogus.  Their only purpose is to give pedestrians the impression they can control traffic – thus we will endure the short wait and quell our impatience.[ii]   Similarly, for elevator ‘door open/door close’ buttons – most are not even connected to the electrical panel.  I’d almost bet our office thermostat is made by Fisher Price.  Turning it up or down does little other than allow the landlords[iii] to save on energy bills.
 
Financial control isn’t necessarily a means tested phenomenon – in fact, we occasionally see the more affluent adversely affected.  Sometimes 8-digit, generational wealth.  They’ve lapped the money marathon but can’t enjoy the winners’ circle.  They obsess over their portfolios. While their competitive inner drive is likely a catalyst for the financial success, it can be breed frustration when trying to control the uncontrollable.  Conversely, we’ve observed more humble families with complete contentment.  Money isn’t the driver.  They aren’t bothered by the Dow’s daily fluctuations nor concerned with the 10-year Treasury rate. Needs vs wants have been effectively segregated. I find that admirable.  
 
Sometimes realizing our limitations can refocus the mind & efforts on things we can actually influence. While sadly my impetus was a January loss to Rutgers; I realized Michelle & Catherine didn’t deserve the nuclear fallout. Now she makes me watch Housewives of Beverly Hills as a penance – which I don’t care about.  And that can be liberating. 
 
 
 
 
 
Fiscal Fitness is a publication of Houlihan Asset Management, LLC for the benefit of its clients and friends.     Houlihan Asset Management.  Wealth Counseling/Asset Management. Copyright 2019
 
 
[i] The Molly Index – currently neutral.
[ii] Christopher Mele, 2016, Pushing That Crosswalk Button May Make You Feel Better, But, New York Times
Dennis Houlihan