Often in our investment lives, and otherwise, we spend a lot of time trying to answer big question for ourselves. This can be overwhelming, stressful, time consuming, and mostly, a waste of energy.
Asking better questions or posing questions a bit differently is often a great strategy for finding the root of what we’re really trying to answer. A good place to start can be asking ourselves “even if I do come up with a solution, will get that me into a better place?”
If the answer to that question is some version of “no,” then you likely should be asking a different question. Here are some examples of common questions and how they can be asked in a more actionable way:
How much do I need to retire?
How much money would it take to create the cash flow I am used to right now?
What if the market crashes next year?
How can I invest my money to assure my plan stays on track through the unpredictable year-to-year returns of the stock market?
How much money do people like me usually have?
How do folks in a similar situation to me setup their investments to meet their goals?
Is now a good time to invest with everything going on?
Since none of us know when the good or bad markets will come, how can I invest to grow my money and not risk my future?
Can I even afford a new car?
What am I currently spending money on which is not adding to value to my life? What can give up so I buy a new car, which would provide more benefits?
Isn’t the stock market risky?
How much of my money am I comfortable putting into the market for future growth and accept that there will be risks that come with that?
How do I make better return on my investments and get on track for retirement?
What am I spending money on right now that is not providing much happiness and holding me back from saving or spending elsewhere? Often, there are things in our control that we are spending money on that can have a much bigger impact on our retirement plan than the returns of one investment or another.
The big, ominous questions are often a convenient excuse to hide behind knowing that there is no “real” answer, and therefore gives us an “out” for needing to take any action. It can be so easy to convince ourselves that even if we take a stab at the answer, it will end up unfinished anyways, or we may feel that if our questions are related to things out of our control it’s a waste of time to even think about or discuss — these are red flags! The truth is, if we can bring the question back to the related topic but focus on things we can control it helps relieve a lot of stress.
Let’s look at the common question “Is the market going to go down next year because of the election?” This is a great example of something we could discuss ad nauseum and still not come up with a sufficient answer. A better question — one that provides some control — would be something like: “We know year to year the market is extremely unpredictable, how much of my money do I feel comfortable investing given that fact. (Sidenote, the market is just as unpredictable even during the times it “feels safe and steady” so wishing and hoping for those “easy times” do not change that fact.)
Here’s another example: In the fall of 2019 how many of us were worrying about a virus heading our way and driving the markets down over 35%? The best part is even if we did know that was coming, staying invested going into that pandemic would have worked out just fine given the strong bounce back.
What we often forget though is that doing nothing is still a decision. The goal here is not to judge this inclination but to remind ourselves that we are the ones that deal with the end consequences. It’s also empowering to know that we are in control of our next steps instead of wishing and hoping for external factors to go in our favor (or worrying about the possibility of things going against us.)
At Evergreen Retirement Planning, ownership is one of our values that comes into play here. Ownership of our path toward retirement: ownership of choosing our risk profile that works for us; ownership and acceptance of losing money in the short term in exchange for future growth; and ownership of the responsibility of our actions with our money and that impact on our family.
We believe ownership and accountability not only liberates but provides security in the knowledge that we considered all options and chose the best decision for us — regardless of how things work out. With this mindset, we understand that ownership includes taking accountability for investments going down in poor markets because we took a risk, or needing to work a bit longer if we invested too aggressively during a poor market, or vice versa. This doesn’t always lead to the perfect decision, but it does provide peace of mind knowing the decisions were ours and with intention. At the end of the day, we can all only do our best with the information we have at the time.