Money Grounded-ness Memo # 20: “Informed Discretion”

Stephen Weatherby |

Background Note
These ‘Memos’ were written after I published Ten Weeks to Financial Awakening.  This book sought to offer a path with money that would ‘ground’ our lives like a ground wire in an electrical circuit – allowing a free flow of energy.  In offering these Memos to you my intention is that you are reminded that giving money your attention rather than your energy can lead to less suffering and more happiness in your life. (PL)

 

 

Money Grounded-ness Memo # 20
August 4, 2006

“Informed Discretion”

While awaiting a friend in the lobby of a Minneapolis hotel, I picked up a well-worn paperback filled with beautiful black and white pictures of America with aptly placed quotes from our forefathers.  Underneath a beautifully simple shot of the Jefferson Memorial were these words:

“I know of no safe depository of the ultimate powers of society but the people themselves: and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education.” 

 Thomas Jefferson

As we look around there are plenty of signs that as a nation of individuals we have failed to “exercise control with a wholesome discretion” – especially as it relates to our financial affairs:

  •  National Debt – now nearing $8 trillion dollars – $30,000 per citizen.
  •  Consumer Debt – now at $6.5 trillion dollars. (With consumer debt, real-estate loans, and our national future obligations that $30k rises to $185k per citizen.)
  •  Average personal savings rate in America -  under 1% of income.
  • $40,000 of family income per year (Gross – before deductions and taxes) leaves you better off than 50% of Americans.
  • 1% of Americans (3 million people) have as much money as 100 million people at the bottom of the financial net worth scale.
  • 4 out of 10 Americans say they are saving nothing for retirement.
  • 45% of respondents to a recent national survey on retirement say they have less than $25,000 set aside.
  • Only 18% of respondents of this same survey say they have more than $100,000 set aside to fund their retirement.
  • Half of 401(k) account holders surveyed believed that money market funds were composed of stocks and bonds.
  • Surveys reveal that more money doesn’t equate to more happiness – in fact, the positive correlation between the two ends at less than $20k of income per year!

But if you look around there is more information about money than ever before. Just Google any financial topic and you’ll have more than enough fodder to set you back on track – right?

Consider a few ways we’ve lost our “wholesome discretion”:

 

 

  •   Denial  -“Don’t talk to me about money – it’s none of your business. I’ll be fine when I win the l lottery.”
  •   Dillution – “I’ve got all the information I need – after all I read “Money” magazine from cover to cover and will act on some of those ideas any day now.”
  •   Despair – “What’s the use?… I’ve waited far too long to fix this sinking ship.”

 

As if these three ailments weren’t enough to perpetuate our money suffering, there is yet another culprit lurking in the bushes – with full societal support :

 

  • Delegation – “I’ve hired a broker (CPA, Attorney, Personal Assistant, Financial Planner….) and I’m sure that he/she will make sure that everything will turn out just fine.”

“Hire an expert.”  “Focus only on what you are good at and enjoy.”  “Limit your "education” to your own area of expertise.”  We’ve all heard this advise and applied it to an extreme.  Now we shun anything that causes us discomfort or robs us of our entitled “good life”.  After all, we’re too busy to attend to all these menial and boring details.

But Jefferson warns us that “the remedy is not to take it (control) from them…” Each of you have heard me state that “awakening follows attention.”  If we want to reclaim our energy/power in any aspect of life, we must step up to the plate and “inform (our) discretion by education.”  

This year I’ve insisted that my financial planning clients enter their day to day finances into Quicken. It takes hours and hours - but they have stuck with it. Even though there was some natural resistance at first, I’m now hearing: “I feel so much different about my money.” “We really do need to cut back on our eating out – I just didn’t understand how much we were spending each month.” “I never thought I could do this financial work –I hate to admit it but it’s kind of fun!”

But education requires us to admit we don’t know everything. It strips away the superficial comfort of living with illusions of reality rather than with reality itself. It reminds us that learning must become a way of being.  It calls us to engage in the journey of being present to “what is”, rather than constantly be fixated by what “has been” or “could be.”

“Ten Weeks to Financial Awakening” is one tool we can use to follow Jefferson’s advice – especially as it pertains to our financial woes.  There are countless other ways we desperately need to re-educate ourselves and stem this tide of ignorance. I have to admit that my withdrawals have exceeded my contributions to the “safe
depository of the ultimate power of society”.
   
What better day than today to re-engage with the details of our lives in an honest and direct way? What other hope is there that our society will survive?

Your fellow traveler,

Paul 


Paul Lemon, CPA/PFS, CFP®
Author, “Ten Weeks to Financial Awakening”
www.paullemon.com
paul@paullemon.com