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I HAVE READ THAT confession is good for the soul. I suspect it’s also good for our financial health—or, at least, I hope so. I have a confession to make as a usually loyal fan, regular reader and occasional contributor to HumbleDollar.
I’ve read less than a dozen of the site’s articles in 2022, and I’ve checked my portfolio just as infrequently. This is a new practice for me. I share it somewhat reluctantly because it may or may not be healthy.
When I was a regularly practicing minister, it was rare when someone came to me to spill their darkest secrets. My religious tradition doesn’t require regular confession.
When I counseled people in financial trouble, one of the first tasks I gave them was to write down everything they earn, spend, owe and own. In every case, I found that sharing honestly was not only good for the soul, but also for just about everything else in their life. Secrets and darkness often destroy; openness and sunlight give life.
As I reflect on why I’ve disengaged from finances this year, I realize I’ve learned some good things—and some not-so-good things. I hope you’ll find a truth or two for yourself in my confession.
Bad news isn’t fun and I avoid it. In years when the financial markets decline, I often stop looking at my portfolio. I do the opposite when the market is booming. Then I may check and recheck my balances multiple times a day.
The bad news is that frequent checking sometimes led me to act impulsively. I’d sometimes sell low or buy during what I thought was a dip. I wish I was more like Warren Buffett, who famously advised, “Be fearful when others are greedy, and greedy when others are fearful.”
Most of the time, unfortunately, I’m not like Warren. By not looking at my portfolio this year, I’ve missed some buying chances. But I’ve also avoided selling in a year when I probably just needed to sit still and be patient.
Greed is good—except when it isn’t. The bear market wasn’t the only reason I’ve stayed away from HumbleDollar and my portfolio this year. Last spring, I finished my third year as a seasonal tax preparer. I continue to learn and enjoy the work—most of the time.
Living with investment accounts, bank statements, W-2s and the other details of people’s financial lives for two months each year puts money front and center in my life. This year, when tax-filing season ended, I went on a two-day silent retreat to rest, meditate, pray and reground myself.
At the CPA practice where I work, the income of the clients is typically higher than my own—and that of most people. I don’t get to meet the folks whose returns I prepare, yet I imagine what their lives are like based on their tax returns and background information.
The financial person in me looks for ways that people can keep and enjoy as much money as they’re legally allowed. What they do with that money is, of course, up to them. The minister and spiritual searcher in me, however, reflects on the value of money, and how we can use it to bring more joy, peace, health and happiness into our lives and into the world.
But it’s also true that not all needs are met. We’re such a rich society, and yet there’s such poverty and despair among us. I wonder how we can justify one rich man spending $44 billion to buy a single company or, for that matter, collectively spending a record $16 billion on elections. I needed a break from the financial industry this year to focus a little more on questions like how much is enough, and how much do I want to share with others.
For me, these questions never get old, although in some years they seem more urgent. Reading and writing about financial struggles and strategies felt too heavy for me in 2022.
Planning and preparing give me options. I’ve been able to consciously disconnect from money this year partly because I have the privilege of knowing so much about it. The lessons I’ve learned over the years—from my experiences and from financial experts like my colleagues at HumbleDollar—taught me how to manage my money in a successful, non-stressful way.
I don’t have to sweat the market’s ups and downs because my wife and I have enough cash set aside to carry us through a minimum of three years. I’ve set up our finances so we don’t need any money from the bond market for at least three years, or from the stock market for at least eight.
This peaceful security is the result of lots of hard work and luck, and some spiritual practices as well. Regular meditation seems to help me focus on today, rather than on what might happen tomorrow.
I’m semi-retired now. Next year, when I turn age 65, I’ll have a myriad of financial decisions to make. I expect I’ll be spending more time with HumbleDollar to learn and share. The conversations and articles here have helped me prepare and be at peace more often than not.
I just hope I won’t forget the lessons I’ve learned by not paying so much attention. My soul feels better now. Thank you for hearing my confession.
Don Southworth is a semi-retired minister, consultant and tax preparer living in Chapel Hill, North Carolina. He recently completed his Certified Financial Planner education. Don is passionate about the intersection between spirituality and money, and he encourages people to follow their callings wherever they lead. Follow Don on Twitter @Calltrepreneur and check out his earlier articles.
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I found myself looking more than ever this year and went mad with tax loss harvesting.
Congratulations on not checking so often. I really don’t see the need to check more than a few times a year. I rebalance maybe a couple of times a year, if that, and if I’m not going to rebalance, why look? Anything else is market timing.
Don, thank you for this thoughtful piece. And I hope you will continue to contribute in 2023 as you are a positive presence here on HD.
I second that sentiment. I’m hoping we’ll hear a lot more from Don in 2023.
Thanks Andrew and Jonathan.
The point is it’s his money and he gets to decide what to do with it. I could make the case that we should all sell everything we own, including investments and give it all to those poorer than we are. After all, we are among the world’s richest people. Yet I don’t see any of us doing that. In fact it is mostly just billionaires like Gates and Buffet who are giving away their money.
Don, I’ve done the same thing for most of my investing life. When the market is down, I hardly look at it, when it reaches new highs I’m checking almost every day. It has worked well for me.
There is a reason that the richest country still has poverty. It’s not the inequality, or the system, it’s people, human beings and the decisions they make or don’t make. Sad to say, but human behavior is why we still have wars and racism and many other ills we face too. I’m afraid there is no way to change that.
You say you have three years cash and “I’ve set up our finances so we don’t need any money from the bond market for at least three years, or from the stock market for at least eight.”
Just curious, how does that work if it’s not cash, bonds or stock? What’s the secret?
I sure hope you join those us who visit and comment on HD every day in 2023.
I’ve set up the bucket system with the cash we’ll need for three years in the safest places, the bond funds we have won’t kick in for at least three years and I don’t plan on using stock funds for at least eight. Not really a secret and sorry if I didn’t explain it very well.
Richard, I think we’ll agree to disagree a bit. The system often produces the inequality and the system is created by people. If we could take the best and most equitable parts of the different systems in the world, and perhaps reprioritize our society’s values so that ensuring everyone has basics and nobody has billions more than they need things could be different. I’m always an optimist and especially this time of year when Scrooge reminds me it’s always possible to change our hearts and what matters most!
People who get super-rich often assume significant risk to create new products, services, or technologies that people find useful and at prices they’re willing to pay. Sometimes a new product or service is transformative, e.g., smart phones and mRNA vaccines.
We too often stereotype the super-rich as fat cats who stuff money in their pockets and live luxuriously at the expense of others. Actually, these are the people who had innovative ideas and took significant risk to develop marketable products that can improve millions of lives. Attempts to “redistribute the wealth” according to some notion of “fairness” will only sap the willingness to bear the risks of innovation. This will only diminish our lives and lead to a stagnant economy. The super-rich don’t get wealthy by theft or by oppressing others. We should also acknowledge that they are a significant source of private philanthropy.
One final thought: LBJ’s War On Poverty was begun in 1965. It wasn’t meant to reduce poverty in America, but eliminate it. Over the ensuing 57 years we have spent trillions of dollars on anti-poverty programs, yet we feel there is still too much poverty. How is that possible? Either our anti-poverty spending is ineffective and wasteful, or too many people have become dependent on welfare and never advance to the middle class. Rather than face this head-on, we tend to sit back and ruminate about vague abstractions like “inequality.”
Yes, agree to disagree. The honest accumulation of great wealth does not take from others or block opportunity. In fact, the opposite. In most cases that wealth has been accumulated through the creation of new technology, industries and products of value to all Americans- and millions of jobs as well. In addition, many of the super wealthy add to society through their donations and causes.
Someone with billions have most of that wealth in investments and there is no finite pool that requires taking from others.
Also, keep in mind that those societies with stronger social programs also have higher BROAD BASED taxes, not simply tax the rich. VATs are one example.
On balance much of the great wealth benefits all levels of society IMO.
I’m sorry, but I’m on Don’s side. Just how does Elon Musk spending 44 billion on Twitter benefit anyone? Even himself, as it turns out? Often who gets rich and who does not involves luck as much as effort. If everyone paid a reasonable tax rate we could have a much better social safety net, not to mention such niceties as universal health care and free tertiary education, just like other “developed” countries. Instead wealthy people pay accountants to get around the rates we do have, and we wind up with the ridiculous system another article was discussing recently.
I would suggest that the former shareholders benefited from the sell of Twitter to Musk because it wasn’t worth anywhere near the price that he paid. And, it has provided some amusement to me to see how a big ego can backfire.
But, I feel sorry for many of the employees who were treated like commodities.
I love capitalism, but there is a lot of luck in life, and I want to live in a county with a reasonable safety net for people who are less fortunate.
God Bless!
We ALL benefited from Elon buying Twitter…he exposed their hypocrisy in limiting our freedom of speech…I personally don’t know of any financially poor individuals creating jobs do you?
Everyone tries to pay the minimum taxes, everyone. How did Musk get the $44 billion or his share of it? Seems like he started a new industry that reportedly helps the environment and his companies employ about about 110,000 people. He accumulated his wealth as did Bezos and Gates, etc. through the action of the stock market and then diversified.
Luck? Perhaps a bit, but it’s mostly hard work, risk taking and savvy. The notion we can have universal health insurance, free education, etc on the basis of taxes paid by the super wealthy is silly, no country does that.
It seems once a person becomes extremely successful they are the bad guy and the target for spreading the wealth. I bet there are people who feel that way about successful HD readers and writers and have accumulated more than the majority of Americans.
Debates about values almost never change opinions, which is why I think Don simply said that the two of you should agree to disagree.
Our tax code and social programs reflect society’s values, albeit imperfectly. We currently have a tax system that is too progressive for some and not progressive enough for others, just as we disagree about many other things. I personally consider the issue of how folks like Musk created their wealth or whether they are good or bad people irrelevant to the issue of how much of their income they should pay in taxes.
What to do with $44 billion dollars? Think of what good could have been achieved with that money. Andrew Carnegie was responsible for establishing and building almost 1700 libraries across America. I lived in two cities where Carnegie library buildings were built. One is still in operation, today. The other is still standing but is no longer used as a library.
“In 1889 Carnegie wrote an article called “The Gospel of Wealth,” in which he spelled out his views on philanthropy: “In bestowing charity the main consideration should be to help those who help themselves.”
The rich should give, so the poor could improve their own lives — and thus the lives of the society. Giving was a code of honor. “The man who dies rich dies in disgrace,” Carnegie said.”
https://www.npr.org/2013/08/01/207272849/how-andrew-carnegie-turned-his-fortune-into-a-library-legacy
I bet many of us here, at Humble Dollar, could have found a better use of $44 billion dollars.
It was an investment not Musk just spending $44 billion.
Oct 6 (Reuters) – Elon Musk has pledged to provide $46.5 billion in equity and debt financing for his acquisition of Twitter (<TSLA.O>), which covers the $44 billion price tag and closing costs.
While Musk will provide much of the funding after selling down his stake in electric vehicle maker Tesla Inc (<TSLA.O>) and by leaning on equity financing from large investors, major banks have committed to provide $13 billion.
Well said.