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GAINS & LOSSES ROSS LEVIN

People often walk into our office for advice and have no idea about their investments.

With stocks, bonds and mutual funds, we can easily remedy this situation by analyzing and explaining our observations. It's far more difficult to uncover the other less-tangible investments they may have never articulated before.

Many of us are invested in living a lifestyle that shows our place in the world. If you want to understand someone's values, look at how they spend their money. Their spending lends consistency to who they are or who they want people to think they are.

While there are certainly a number of people just trying to scrape by, there are also many concerned about losing their place in society. Money fears for each of these groups may be different, but they are very real.

We sometimes see people right after they have gone through a divorce. Their world has been turned upside down. Their future does not seem clear and it will certainly be different from what they had expected. But one of the first things that they have to confront is how their social life will change as they learn which friends have "sided" with which partner and decide whether they need to sell their home or go back to work.

Money creates community, but communities are not all-inclusive. Certain people are in and others are out.

See change as opportunity

Use any change in your money situation to assess what is essential in your life. Many of our decisions are ones made for others -- explore the ones that are right for you. While there are times when less is really a hardship, there are also times when less allows you an escape from the unconscious choices that build up over time and don't reflect what you truly think is important.

We are invested in judging ourselves and others by what we have. One of our clients simply can't figure out why people in similar jobs seem to have many more possessions. There can be several reasons for this. No one really knows how much people have or from where it came. Outward appearances don't tell you how much debt people have, how much inheritance they may have received or how much they choose to save.

Your financial condition represents one aspect in one moment in time. It certainly is not a complete indication of your success or worth. It's crazy to think that you are 3 percent less important when your investments fall by that amount. So why is someone twice as important as someone else when they have twice the money?

Don't use money as a measurement tool, use it as one of your many resources.

We are invested in holding on to what we have, regardless of the cost. About three years ago, someone walked into our office to discuss their financial situation. They had invested significant money on a down payment for a soon-to-be built Florida condominium they were buying on speculation. After they became a client, we analyzed the property and encouraged them not to close on it. They were not going to use it enough to justify the ownership costs, and the market was beginning to appear unstable. While the amount they were going to lose was large, it was far less than their cost of ownership.

Creating conflict

Everything has costs associated with it. Some of those costs are obvious, while others are far more subtle. Some people don't want to experience their portfolios dropping, so they eschew stocks at the probable cost of either needing to work longer or having less to live on when they retire.

Some of our clients were invested in their adult children taking over the family cabin, even though it clearly was the clients' dream and not that of the children. This ended up creating conflict between the kids who were trying to adhere to their parents' wishes and those who were trying to do what was right for themselves.

I have witnessed other clients invested in not recognizing their mortality, thereby forcing their long-term care decisions on their children, ultimately causing unnecessary friction.

Only when you understand and acknowledge those things in which you are invested can you determine whether they are the ones that really matter.

Spend your life wisely.

Ross Levin is the founding principal and president of Accredited Investors Inc. in Edina. He is a certified financial planner and author of "The Wealth Management Index." His Gains & Losses column appears on the fourth and fifth Sundays of the month. His e-mail is ross@accredited.com.