Know where you're at and want to go

  • Article by: ROSS LEVIN
  • Updated: July 25, 2009 - 11:38 PM

Technically sound solutions must match your personality.


My daughter looked at me after I backed my wife's car into a tree and said: "Do you want me to tell her this time?"

I told her that I'd handle it and trudged up to the porch to announce my third accident -- all in reverse and all in her vehicle. While the evidence proves otherwise, I think that I am a pretty good driver. I usually don't accelerate jerkily, brake suddenly, follow too closely, or speed mercilessly. But driving is more than simply doing everything technically right. It is also being aware of what's behind and ahead of you, as well as knowing where you are right now.

The purpose of financial planning is to understand your current financial situation and what you want for your future. There are technical decisions to make, such as how to manage your portfolio, which of various ways to manage your taxes and how best to pay for long-term care. But technically sound solutions that don't match your personality are like driving into the tree at only 5, rather than 10 miles per hour. Who cares if you held your hands in the ten o'clock and two o'clock position as you heard your bumper crumble?

Many of us are experiencing a reality of having had technically sound financial plans in place that did not match our expectations. We thought our work was secure, diversification would save us from falling markets, and money certainly would not be a major factor in our relationships. But the worst economy in 80 years has given us pause. While it is natural to want to retrieve the things that have been lost, a better idea is to deal with the new perspective that we have gained.

Dr. George Vaillant, the 35-year director of Harvard's Study of Adult Development, in his book "Spiritual Evolution, How We Are Wired for Faith, Hope, and Love'' writes: "As we watch two people make their marriage vows, their faith encompasses only what is past; their love allows them to take a sacramental step in the present; but it is through hope and only through hope that, together, they may imagine their future."

Above all, trust

Of all the things lost over the last year, I believe the most important one to regain is trust. Doing what you thought was right and still suffering, reading about and watching scandals, and listening to the negative tone and tenor of politics today can cause us to lose our trust.

But we need this trust to believe in the unseen and the unknown. It instills in us some of the positive emotion that is essential to creating a future, as well as to enjoying the present. Before we can successfully find our financial planning path, we need to believe that the things that we are doing matter and the steps that we are taking will direct us toward what we are seeking. This is what gets us back behind the wheel, even though the accidents and detours seem insurmountable.

There are many technical solutions to the planning issues that we confront. None works in all environments and none works for everyone. Trust your instincts, don't ignore the evidence and still believe that you can both offer and receive help.

The degree of uncertainty that confronts us is not unprecedented, it is simply more accessible. We receive more information more quickly from more sources. Whether we are paying attention or not, this affects us. But this is the new state of affairs and it is not going away. The "facts" that we receive are often contradictory. What we do with these facts is based on our level of trust. Trust that things self-correct.

Last fall, I sat in front of a few clients who really felt hopeless. Their minds raced to possibility, but mostly possibilities of self-destruction.

I also talked with many clients who felt disappointed, but hopeful. They may or may not have believed that their portfolios would return to previous levels, but they did believe that things would get better. More importantly, they believed that they could influence how they handled the next few years. They had say over their spending and over their approach. They took action where appropriate.

Unbeknownst to them, these clients actually gave me strength. Who in your life has offered you hope? What is it about them? I suspect that they are optimistic and realistic. Hope without basis is simply dreaming. Try spending more time with those who give you this sense of possibility and less with those that drain you of it.

I suppose that I am willing to suffer a few more accidents by not spending too much time looking backward when I drive hopefully toward what is in front of me.

Spend your life wisely.

Ross Levin is the founding principal 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 Levin is the founding principal 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
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