Broker Check

Stored Freedom

September 18, 2017

Stored Freedom

Why save?

We all know we should be saving a significant portion of our income, but in recent months there have been media reports claiming that the average American cannot write a check for $500. Clearly, what we know we should be doing and what we actually are doing often do not match.

So again, I ask, why save?

Here are some perfectly reasonable answers that might not provide everyone the short-term impetus they need:

- For our retirement.

- For our children's educations.

- For a home.

- For home improvements.

- For a once in a lifetime trip.

- For an unexpected illness or medical challenge.

- For a rainy day.

I would guess most us would agree that all of these things are worthy and desirable goals. Yet still, we are consistently over borrowed and under saved, as a nation.

I believe the reason for this is that there exists fierce competition for our money. Notice that the worthy goals listed above are things we expect to take place in the future. In fact, some might not take place at all. The competition for our money comes from perceived opportunities that we are faced with in the here and now. The now, in our society, exerts a particularly strong gravitational pull.

The now seems so pleasingly present and vivid, doesn’t it? Contrast that with the future, which can seem vague, uncertain and at times unlikely to occur. The now has been made to seem hip, chic, stylish and fashionable. The now embodies stylish clothing, expensive cars and with it, the envy of our neighbors and peers. The now suggests the bloom on the rose and vibrant youth. Marketers have done their job well.

Planning for the future, on the other hand, has been cast as dated, frumpy, passé and primitive in comparison; an idea whose time has passed. Perhaps, it reminds us of our older relatives who lived modestly and only spent what they had left over after they saved. “What fools those outdated old sticks in the mud were” the message seems to be.

Isn’t it an interesting paradox that has been sold to us? After all, innovation, by definition, will take place in the future? People 100 years from now will look at us in exactly the same way that we look at people 100 years ago; folksy and perhaps even romantic, but clearly unevolved.

What does the future even mean exactly? When is our future, as distinguished from simply, the future? When, precisely, does it come? Is our future a day, a week or a century from now? It often seems so unclear.

Because of this uncertainty, at times we might feel drawn to just living for the present. Imagine the internal dialogue that takes place. “I’ve made up my mind. No overly cautious fuddy-duddy is going to fool me with all that talk of sacrifice, deferral of gratification and living within my means. For what? The future? Humbug the future. No sirree Bob, far better to live in the moment, for the moment. Who's with me? I didn’t hear you, who’s with me???”

In fact, we get multiple advertising messages a day, attempting to convince us to embrace just that mindset. Those messages are authored by the marvelous marketing mavens of Madison Avenue and their ilk. It is their job, after all, to get us to buy stuff – often stuff we have no need for, stuff that will not make us happier – now or ever. Ironically, the more effective they are at their job, the better able they are to guarantee their future, by getting us to sacrifice ours.

The challenge for us is that the marketers have an advantage. We human beings tend to overweight pleasure which is near at hand to future gratification. There was a time when humanity treaded the edge of a knife and life was far less certain.

Back on the Serengeti plains this tendency contributed mightily to our survival as a species. One did not have the liberty to plan too far ahead or look a gift meal in the mouth. It was eat or be eaten.

This hard-wired behavior isn’t as useful as it once was and has been hacked and turned against us by the people who sell stuff. It turns out that there is a way to resist this competitive advantage. We can tap into powerful motivators.

For me, that driving force is freedom. I met a person in 1995 who, though I didn’t know it at the time, would turn out to be one my closest friends. Soon after we met, he told me an amazing secret.

He told me that wealth doesn’t always make people happier, or improve their relationships. It won’t suddenly make you a better human being; in fact, it may have the opposite effect on some folks.

What wealth accomplishes for everyone, to a greater or lesser extent, is to provide them with more options. In turn, that increase in the size of life’s menu serves to make us freer. Today, at 44 years old, I think of wealth as stored freedom. Free how, you might ask? Here is another short list:

- Free to choose a nice, safe neighborhood for your family to live in. If you are without resources, you must live where you can, not where you want to.

- Free of the grinding financial pressure people living paycheck to paycheck come to accept as normal. I lived that life into my 20's. It isn’t normal and it stinks.

- Free to help those you love if they find themselves in a challenging circumstance. Not having to feel “I wish I could do something to help” but knowing you can’t.

- Free to never accept an offer on anything, home sale, car purchase, bank interest rate, rent, etc., that you don’t find fair and appealing.

- Free to tell an unreasonable, overbearing boss or colleague to go fly a kite.

- Free to go where you want, when you want, via the mode of transportation you want.

- Free to choose your calling, focus on the quality of your work and providing value to the world; as opposed to making career choices based solely on monetary considerations.

This in only a short list but one I believe conveys the awesome feeling of freedom. It is a great position to be in and pervades every part of life. Start storing your freedom if you haven’t already. If you are already doing so, store more of it if you can. It will only make you freer. Oh, and it will likely help in that future you feel might never come.

Consider formulating a plan that makes this process uniform and consistent. Taking action is one of the most important components of any plan. If you like, consult a financial planner you trust to help.

Scott R. McGimpsey September 8th, 2017

This material was prepared by Scott McGimpsey and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources, however, we make no representation as to its completeness or accuracy. Neither Summit Brokerage Services Inc. nor Scott McGimpsey is engaged in rendering legal, accounting, or other professionally services. If such assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any federal, state, or municipal tax penalty. Moreover, a diversified portfolio does not assure a profit or assure protection against loss in a declining market. UNIFIED PLANNING GROUP is an independent firm with securities offered through Summit Brokerage Services Inc., Member FINRA, SIPC