This past Wednesday morning, people woke up to something that very few people in the world could have predicted… I actually used my Twitter account to send out a tweet! (Oh and there was that whole election thing, too).
Little EE was up crying with an earache Tuesday night, so I laid down in her bed to comfort her, and we both fell asleep early. I picked up my iPad to check the election results early Wednesday morning. I was shocked to see that Donald Trump had been elected president. The very next headline I saw was about financial markets and panic. It prompted me to ask my followers a simple question:
By the end of Wednesday, markets were up. By Friday stock markets had one of their best weeks in the past five years. Life goes on…for now.
However, that initial panic and uncertainty had me asking myself a simple question.
Part of planning for FIRE is to plan for worst case scenarios. Some scenarios can be addressed with simple planning techniques such as diversifying an investment portfolio and having a written plan that you stick to when others are panicking. Other scenarios can be addressed with insurance products. I’ve written and will continue to write about this type of planning in the future.
However, that is not what I’m writing about here today. Some risks and events have impacts that are too large and wide ranging to be diversified away or insured. Today I want to address how we avoid the angst and anxiety that cause people to do irrational and destructive things. This can include the relatively benign losing money in the stock markets because of panic. However, it can be much worse as seen with people causing themselves stress that negatively effects their health, relationships, and even leads to spikes in calls to suicide prevention hotlines following elections or other trying events.
Today, maybe you are worried about the fallout of the election and the effects on affordable health care, the economy, wars abroad, or peace at home. Maybe you don’t care much about the election, but worry about other big issues over which you have little control. These could include health issues you or someone you love is dealing with, general economic uncertainty, a changing world dominated by technology and artificial intelligence, or concern about the environment.
We follow a few principles that allow us to get beyond these “what if…?” scenarios. These principles are vital to achieving FIRE while living a happy life on the journey and having true financial freedom in retirement.
Live for Today
We all like to think that good financial habits will make us wealthy and happy. Exercising and eating well will give us good health. Being a good parent will result in our kids becoming the adults we want and lead to a lifelong loving relationship. Electing the right leaders will make the world safer, more fair, and more prosperous. However, nothing is guaranteed.
We can shift the odds in our favor, and we should continue to do so. However, we can never know what the future holds. We can seize today.
I personally don’t care much about politics, but I can relate to the angst that people are feeling about things out of their control. When learning about investing, I spent hours agonizing over an optimal asset allocation and got ultra-focused on increasing savings rate, thinking that a few more dollars would make me happy. It won’t. Mrs. EE gets frustrated when she has symptom flares related to a likely autoimmune disorder. Stress only makes things worse. I think any good parent feels angst about doing what is best for their children. Ultimately, they will grow up to be their own people.
In each of these cases, we can not determine the final outcomes. We can focus daily on the things we can control. We try to allocate our resources of time and money each day on doing the things that allow us to enjoy the journey. We continue to spend freely, both time and money, on things that enhance our relationship with each other and little EE. We continue to try to learn a little more and live a little healthier each day.
We are not on the optimal path to FI, either of our health can deteriorate, and there is no predicting what will happen with little EE. That is OK. No one will ever be able to take today from us. Cherish the simple things.
While we can not control all of the things that we worry about, virtually nothing is completely out of our control. I just completed the book “Extreme Ownership, How Navy SEALS Lead and Win” written by former SEALS Jocko Willink and Leif Babin. Extreme ownership is essentially the opposite of playing the victim card. It is an approach rarely modeled by the two presidential candidates, who managed to blame a multitude of factors for their shortcomings.
Ownership can be overwhelming with the types of “What if…?” worst case scenarios. It can seem unfair and make things even harder in the short term. It can seem like blaming the victim. However, taking ownership of your fears and issues is also the only way to grow, improve and avoid repeating your mistakes. Even though we can not control all aspects of a situation, we must take ownership of the situation we find ourselves in.
As related to financial independence, we all have slightly different definitions of what that means. The reality is that no one is truly independent, not dependent on others. We are dependent on reasonable market performance or having people able to rent our properties for income. We are dependent on having a healthy food and water supply. We are dependent on a system that provides affordable health insurance. We are all dependent on having general peace and prosperity. No one is independent, financially or otherwise. It is reality and we need to own it. Only then can we develop robust plans and strategies that can’t be taken away by one change to the tax code or a bad decade or two in the markets, let alone something bigger.
A lot of people are feeling hopeless because of a Trump presidency. There will be a Trump presidency, because a lot of other people are hopeless and have tied their hopes to someone else making them “great again”. No one has ultimate power over your life, unless we give it to them. Take ownership today.
Viktor Frankl wrote the amazing book, “Man’s Search for Meaning” to share his experiences and observations of surviving in Asuchwitz and other Nazi concentration camps for four years during WWII. His conclusion is that there is meaning in all aspects of life, even suffering and even death. The ability to find meaning and purpose is often what separated those who survived and those who did not.
Often we get caught up seeking happiness by reaching a goal, obtaining objects, having more money, or romanticizing a lifestyle. Rarely do these things or accomplishments give us lasting happiness. Instead, maybe we should be looking for purpose and meaning. When we have purpose and look for meaning in life, happiness can just happen.
If this election and other recent events around the world teach us anything, it is that there are a lot of disaffected people out there looking for something. It sounds like a lot of opportunity to find purpose for those in this community who are in position to do amazing things with your lives. Will you?
How do you deal with things out of your control? How do you plan for worst case scenarios? Share your thoughts below.
*Thanks for reading. If you enjoyed this content, you can find my current writing at Can I Retire Yet?. Enter your email below to join our mailing list and be alerted when new content is published.