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I’M NOT THE SMARTEST guy. That used to bother me when I was in school. The smart guys were making their teachers happy. They were named to the National Honor Society. They went to the best colleges. They seemed to have it all.
As I got older, and began to make more and more decisions on my own, I had to come up with a method that would allow me to make good decisions, given the limited gray matter I was working with. My strategy: I like to narrow down my choices, identify the key variables, avoid decisions with really bad potential outcomes—and then get on with my life.
Remember, every decision comes with risk—the risk of being wrong—and every decision will lead to an outcome, good or bad. The first thing I do is settle on my priorities. What am I trying to achieve? I then think about the options available to me, and try to narrow that list. I believe limiting choice reduces anxiety. If there are fewer choices to consider, it’s also easier to study each choice and make a good decision.
Among the choices I’m considering, I think about what’s the worst that could happen if I chose one option over another—and I then avoid the one with the worst possible outcome. What if the choices seem pretty much equal? I don’t worry too much about which one I choose.
I once spoke with a guy who was affiliated with my employer. He was trying to decide how to spend his money. He said his options were to buy a new truck or remodel his home. I asked him which would be best for his relationship with his wife. He chose the remodeling project. Identifying the most important variable is the key to making good decisions.
When my son was young, I decided I needed life insurance, so my wife and son would be okay financially if I died suddenly. That was my priority. The two main types of life insurance are term and whole life. Term-life insurance provides only a death benefit, has far lower premiums and is designed to provide coverage for a limited period of time, perhaps 15 or 30 years.
Meanwhile, whole-life policies provide a death benefit coupled with an investment account. These policies are designed to provide coverage for your whole life—hence the name—but the premiums are far higher. I chose term, which provided what I needed, or so I thought.
Under normal circumstances, once your children reach adulthood, they can make it on their own and they no longer need the financial support that life insurance might provide, so term-life insurance works well. But if you have special needs children, they might never be able to make it on their own. They’ll always need your financial support—including your financial support after your death.
As my son got older, it became evident his disability wasn’t going away. Once I realized that, I also realized whole-life insurance would have been a better choice. But by then, it would have been prohibitively expensive to buy a whole-life policy.
As a substitute, I opted to fund a Roth IRA. That also allowed me to achieve my goal. Under current rules, when you bequeath a Roth, the beneficiaries won’t owe any income taxes, just like the beneficiaries of a life insurance policy. I’ve earmarked my Roth IRA dollars for my son, so there will be a pool of tax-free money to help support him after my death.
I keep hearing lately about the “tax time bomb” that’ll be triggered when I take required minimum distributions (RMDs) from my traditional IRA. One solution touted is to convert my traditional IRA dollars to Roth dollars prior to starting RMDs, so I’ll never need to pay income taxes on those dollars again.
But while I have my Roth dollars earmarked for my son, I also need some IRA dollars for me to spend during my lifetime. That’s another priority for me. I’m happy to pay taxes on those traditional IRA dollars along the way, rather doing a big Roth conversion now and getting hit with a big tax bill.
Like Henry Ford, who was famous for making decisions and then sticking with them, my decisions on my Roth and traditional IRAs are made, and I’m not changing them. Good or bad, the choices have been made. Now, I can move on to other decisions.
David Gartland was born and raised on Long Island, New York, and has lived in central New Jersey since 1987. He earned a bachelor’s degree in math from the State University of New York at Cortland and holds various professional insurance designations. Dave’s property and casualty insurance career with different companies lasted 42 years. He’s been married 36 years, and has a son with special needs. Dave has identified three areas of interest that he focuses on to enjoy retirement: exploring, learning and accomplishing. Pursuing any one of these leads to contentment. Check out Dave’s earlier articles.
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David:
I have always been jealous of those to whom math comes easier. Considering your degree in Math, I believe you had, and still have, ample grey matter.
My take on your article is a little off on tangent, but here goes.
I barely graduated from high school in 1968. My GPA had to have been in the lowest decile. My greatest challenges were in Algebra I & II and Chemistry. There were some reasons for this, but basically everyone has reasons for shortcomings in their life, so those reasons aren’t really important.
But the funniest thing happened after high school. I enlisted in the US Army to become a Helicopter Pilot, because my older brother had died in Viet Nam the I was a 10th grader. I never realized that goal, because of my lack of depth perception, but the Army revealed to me that, contrary to what my grades in high school evidenced, I was actually a pretty bright person.
The first two weeks in the US Army you are assigned to a Basic Training Unit and then you get the haircut, uniforms, etc. The you spend about a week taking tests…lots of tests. The results for me were outstanding. For those of you that are veterans, you will recognize the GT Score. (Basically, the Army’s version of an IQ Test.) Mine was 130. In addition, my other scores placed me at the top decile in almost every category, (Scoring over 90) except motor mechanics, and I will testify, God gave me no gifts that require the use of hand tools.
After completing my military service, including spending a year in Viet Nam, (1969-1970) I came home and went to college. With my new found confidence in my academic abilities, I earned 3 Associates Degrees, a Batchelor’s Degree, an MBA, and I completed all the coursework for my DBA, over the years, but did not complete my dissertation. Throughout my academic career, the lowest GPA I ever scored was a 3.0, and the highest 3.97. I graduated with honors multiple times and was nominated for Outstanding Graduate student in my MBA Cohort.
Did I ever overcome my math phobia? NO! But I proved to myself that with enough effort, even a math phobic person can earn A-‘s in College Algebra, Quantitive Mathematics, and Statistics at the undergrad and graduate level.
Beginning in 1972, I began a career in Finance and Banking. Over the years I worked my way unto Group VP for the second largest consumer finance organization in the US. In 1998 I began a second career in Financial Services, as an Agency Owner for America’s 4th largest Insurance & Financial Services company. I sold the agency and established an independent agency and after selling that agency, I ended my financial services career as a Regional Management Associate for the largest Fraternal Benefits Organization in the US.
in 2009, I joined academia, from which I retired in January, 2024 after 15 years as an academic, training thousands of financial services professionals, as CFPs. ChFCs, CLUs, RICPs, and additional professional designations. (I personally earned 23 different professional designations between 1991 and 2023, as well as completed all the course work required for a DBA.)
You talked about making decisions that affect your life. My decision in 1968, to join the US Army, where I learned that I was really a bright person, despite high school grades indicating otherwise, changed my life, forever. Had I not made that decision, it is likely I would never have attempted to earn a college degree. And if that had happened, I would have missed out on my life’s work…helping to produce 1,000s of educated, qualified financial services professionals, like you.
Thank you for a great article.
That’s a great story. I’m a professor who’s spent much of my career training future teachers. Many of them had stories of being told by their own teachers that they weren’t “cut out for college,” were terrible writers, etc. It wasn’t true. They were just late bloomers when it came to success in school—or maybe their previous teachers didn’t know how to reach them. But just because one isn’t a great student in high school doesn’t absolutely mean that more education isn’t possible later, if that’s a path one wants to take.
While National Honor Society accolades and prestigious college degrees often lack a direct correlation with sound financial acumen, your humility, as beautifully exemplified in your blog, stands as a true testament to your wise judgment. Thank you!
agree with David about his HS reminiscence. good decisions may/may not come from book smart. it’s all about the wisdom one gains throughout his life.
David, nice try at the self-deprecation, but it’s clear from your writing and your experiences that you’ve got plenty of gray matter. And I guarantee you got more dates in high school than the smart guys. (I never got one.)
But the most important thing to understand is that good decisions are not a function of IQ. Smart people make dumb decisions all the time, be it overreliance on brain power or lack of EQ or whatever.
For me, the way to look back on my decisions, dumb or smart, is to ask myself whether I would change any of them. Every decision I’ve made has led me to this exact point in my life (even the worst ones, like that first marriage), and I don’t know where I’d be if I’d decided differently. Since I love my life today, I not only accept those bad decisions, I’m grateful for them.
Claiming to have limited gray matter and having a bachelor’s degree in math…. doesn’t add up.