what’s in your wallet?

Quick, quick – let’s get the US economy rolling again. The stock market has hit big money where it hurts most – in the pocketbook. The number of people unemployed is 30 times higher than the number of people infected with the coronavirus. Let’s reopen everything right now! Hm. Let me think about that. Meanwhile, nine years ago in August, 2011 I published this post about my love affair with numbers, money and financial mayhem. It seems strangely relevant today.

CONFESSIONS OF A FINANCIAL ADVISOR

 Forty years is a long time or a short time, depending on your perspective.  For example, if you’re talking about your work, career, job, employment, occupation, profession—it’s a long time.  If, on the other hand, you’re talking about life expectancy, it’s definitely short.  Context is everything.

In order to spend forty years in some variation of giving advice to people about their financial futures, I had to be in love with numbers.  The love affair began at an early age when in elementary school my mind grasped the concept of “1 + 1= 2.”  Imagine the simplicity and order and, yes, the comfort of that equation.  Consider, then, the possibility of “2 – 1 = 1.”  Astounding.  Okay, maybe not astounding, but certainly intriguing to my young mind.  Addition, subtraction, multiplication, division.  Numbers could be manipulated and re-arranged in combinations that hid secrets or unlocked them.  Context was everything.

At some point in my educational process, numbers were combined with dollar signs.  Dollar signs represent currency values, the medium of exchange for goods and services, or “must-have’s” and “can’t-resist’s.”  We become accustomed to seeing numbers with this “$” in front of them.  We learn that good news for us is a dollar sign followed by a large number, if it indicates what we have.  Bad news is a dollar sign followed by a big number, if it signifies what we don’t have.  Again, context is everything.

Eventually, the numbers and dollar signs blur with the addition of a comma and several zeroes, which means the numbers are so big you don’t even want to discuss them.  Millions become billions that grow into trillions, and then someone wins the lottery.  Someone else loses her retirement savings.  A national election is won or lost as a result of the number of zeroes in the unemployment levels.  New words are discovered for numbers with dollar signs.  Net income before taxes, and net operating losses before moving corporate headquarters overseas.  Deficit—a nice, neat word for spending more than we have.  Surplus, a term of endearment.  Generally accepted accounting principles, a floating lifeboat in an ocean of corruption.  Stock markets that run up like bulls when greed has a green flag, or down like bears when fear chases them to their dens.  Ratios, which have something divided by something else. Price/earnings ratios.  The words melt in your mouth, not in your hands.

Once upon a time, numbers were written by hand and manually checked for accuracy.  Checked and cross-checked to make sure that “1 + 1” still equals 2.  Long ago and far away, hamburgers with all the trimmings cost $0.25, and a gallon of gas was the same price.  Silver quarters and silver dollars were the currency of choice.  A penny saved was truly a penny earned.  And a copper one, at that.

In the midst of those days, I consummated my love affair with numbers and became an accountant.  Not just a plain old accountant, but the ultimate—a Certified Public Accountant.  It wasn’t easy.  Professions rarely admit new members graciously, and it took three attempts for me to pass the entrance exams.  But, I knew my numbers wouldn’t disappoint me, and they didn’t.  They welcomed me into a world of debits and credits and spreadsheets that generated financial statements and the obligatory returns of the Internal Revenue Service.  It was a world I inhabited and embraced for twenty years.

During that period, from 1968 to 1988, my faithful adding machine with the little spool of white tape that could be checked, torn off, and stapled to paperwork as a record of accuracy was my constant companion.  Regardless of the task, numbers were printed on white tape and preserved.  How could there be a shred of doubt about anything when numbers supported your position?  Need a bank loan?  Net income must be high.  Paying income taxes?  Taxable income must be low.  Which brings us to another new word—reconciliation, a word commonly used in domestic disputes but also invaluable in financial circles.  Numbers must be “reconciled” to tell different stories to different audiences.  Their historical framework must be plainly visible to the untrained eye.  Context is everything.

And then one day towards the end of that time of long ago and far away, the numbers were swallowed by a machine called a computer.  They were devoured and simply vanished from their connection to the people and values they represented.  All control of reality was relinquished to a keyboard attached to a screen.  As I watched those screens over the next twenty years, numbers with dollar signs zoomed through cyberspace and into a Twilight Zone of futuristic projections with reckless abandon.  New Age economics clashed with Old World mathematics.  Did “1 + 1” still equal 2?  No one really cared.  Numbers were about possibilities, and the hopes and dreams of financial freedom with a few chronicled trends tossed in for good measure.

By the year 2008, hamburgers with all the trimmings, in the world of the here-and-now, up close and personal, cost twelve quarters, and they weren’t really silver ones.  A gallon of gas cost more than the hamburger, and the price was determined by a four-letter word group called OPEC, which was run by men who lived across the Big Water and not just down the street.

Since it’s impractical to carry enough quarters to buy hamburgers today for a family of four, we traded our coins for paper currency that is lighter in weight, which makes it easier to transport, and also encourages a whole new industry of manufacturing wallets and pocketbooks.  To ensure that Americans will purchase several of these to carry their currency, we have created “designer” brands with diverse colors, shapes, and sizes for the discriminating consumer.  Our paper dollars require protection and easy accessibility with a pronounced element of style.

The paper money supply is monitored by various governmental agencies and the vast wasteland that is the financial media.  In the 21^st century, it is now possible for all computers to talk to each other and for bank customers to swipe debit cards that look like credit cards to quickly access money from their bank accounts for purchasing goods and services without actually producing the paper.   Abracadabra.   Whoosh – the money flies out of one account and into another one as long as you remember your personal identification number which is subject to theft unless you protect your identity by paying more money to watchdog security systems.   Additionally, hundreds of thousands of advisors and analysts can experience the joys and frustrations of instant mass information, which bombards us every time we refresh our television or computer or iPad or iPhone or some other newer screens yet to be developed. Experts are available for every topic.

            Question: “What do I need to do to save for retirement?”

Expert #1: “You are alone. You need to do it yourself.  Stay tuned to my television show, and I will teach you the secrets that have made me the gigantic success I am today.  Subscribe to my newsletter.  Buy my books.”

Expert #2: “You are not alone, but you can do this yourself.  If you call my toll-free number, someone will personally help you in this time of financial uncertainty.  We are your friends.”

            Expert #3: “You cannot do this by yourself.  You need to work with an advisor who understands your needs and objectives.  Professional advice is the surest way to success.  We care about you.”

You see the problem.  So many experts, so little time.  And context?  Clearly, it isn’t everything any more.  Context is defined and massaged to frame five-minute segments on twenty-four-hour, seven-days-a-week news programs.  In five minutes, answers are given to economic questions that have plagued theorists for years.  Five minutes later, different responses to the same questions create confusion for the listeners brave enough to stay tuned.  In the immortal words of Andrew Shepherd, the President in The American President, “It’s a world gone mad, Gil.”

 As for me, my forty years with numbers were good ones and passed too quickly. The people behind the numbers were always real and taught me many lessons that I would have never learned without them.  From parents planning for their children’s education, to seniors securing their estates for their families, to the gay and lesbian couples who were forced to find alternatives in planning for their futures because they had no legal status, I saw that the use of financial resources often reflected the caring character of my clients who owned them.  I am grateful to those clients and friends for their trust, which I diligently tried to earn through the values instilled in me by my dad—treat everyone equally and with respect because every person matters. And, most importantly, keep your sense of humor.

Once in a while, when you lose that comedic edge and worry too much about the numbers and dollar signs, try to remember that it’s only paper, after all.  And, for perspective and context, avoid watching more than one financial guru at a time on whatever channel you select for your financial news.

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Pretty trying to get our granddaughter to nap yesterday

Yes, I know the photo is totally irrelevant to the subject matter, but Ella’s Nanas are shamelessly fascinated with her – even when she sleeps. Oh my goodness.

Stay safe, stay sane and please stay tuned.