Fixed Ideas

We all have fixed beliefs

Some of them are about standards we have. Some are about behaviors we favor. Some others are just there. The last group deserves some thought.

People hold on to fixed ideas because they think they work or because they want to have a recurring theme in a work of art. Don Quixote and Captain Ahab had profound fixed ideas that led to quite good stories. In music there is often a recurring theme.

Fixed ideas are not without merit. Assess the meaning of the ones you hold.

Security is relative

One that requires periodic review is security need. Some people can never feel safe financially. Sometimes there is a deep reason. A common one is the loss of a parent when  young, coupled with serious deprivation. The frightened child never goes away.

Many people of great wealth fall into this group. Building wealth becomes compulsive.

How much is enough?

The answer varies from one to another. In places of extreme poverty, enough food for another day might qualify. For someone else, 20 years of lifestyle spending might suffice. For the ones with the fear problem, all the money there is might be short.

An assessment 

Life is about balance. Money is just one of many parts. People should see money in context. What is it for? How does it support other priorities I may have.

Money is a store of value. You contribute time and skill and someone pays you. The money goes four ways. To the government, to the past to pay debts, to the future to pay for lifestyle and developing obligations like education and to the present for consumption. Consumption defines lifestyle.

Consumption is the only part of your money that matters if you have enough for all time. You can’t take it with you and their is little glory in being the richest person in the cemetery.

Learn to balance your money with the uses that exist throughout your life.

Undersaving is a mistake.

Without saving there is no money for the future. No money equals less consumption.  A less enjoyable lifestyle. No saving means no capital to invest. No one is such a clever investor that they can earn great returns with no capital.

Saving is fundamental. Think of your retirement savings as deferred groceries.  Maybe then it will make sense to save.

Oversaving is a mistake

Undersaving cheats the future. Oversaving cheats the present. Life planning is balance. Remember? You cannot take the children to DisneyWorld or send them to a summer camp when they are 34.

Parenting is about creating memories and experiences.

One of the experiences is showing the children how to fit a current consumable into a budget that includes future needs as well present wants.

Think balance

Balance time and lifestyle and money. Be sure your fixed idea about when you fell good about security is not cheating you.

You might need a little help with the arithmetic, but once done, the habits are easy enough to continue.

Check out some other fixed ideas while you are in the mood. Why retire? Why own a house? Why work through vacation time? Why not give to charity?

Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. 

In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you. don@moneyfyi.com  866-285-7772

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