Putting a Name to the Fear

“I’m afraid there will be a recession soon.”  No, you’re not.

“I’m afraid the stock market will go down.”  No, you’re not.

“I’m afraid I will lose my money.”  Close, but no.

What does losing money mean?

Money is not the thing we want or need.  It is the standard of exchange we use to obtain these things.  I’m not afraid I’ll lose my money.  I’m afraid I won’t be able to feed myself or my family.  I’m afraid I won’t be able to manage my own time.  I’m afraid of losing control over my future.

Studies show that the more steps there are between ourselves and a payoff, the more likely we are to cheat.  Let’s say you take a test and get paid based on the number of answers you say get right.  If you are directly paid ($1 per answer, or whatever), you are likely to tell the truth.  When paid in tokens which are then exchanged for dollars, however, humans are much more likely to fudge their results.  With every intermediary between what we do and the payoff, we become a bit disconnected.  The focus shifts to the medium of exchange rather than the end goal.

You Don’t Care About the Value of Your Account

You care about what that money can do for you or, more likely, what you can do for someone else with it.  Money is time and optionality.  Instead of spending the weekend cleaning your house, you can pay someone to do it for you while you spend that time doing something with your friends and family.  Money is also the difference between the burger joint dollar menu or Chipotle.

It can be easy to lose track of exactly what we are trying to do with our investments.  If your goal is to accumulate as much as possible, you will never be happy.  That goal is impossible to achieve.

Naming our true fear can be a way of figuring out what our real motivations are.  Are we tying too much of our perceived value to our account balances?  How our sports teams perform?  Politics?  If I’m afraid of losing money because then I won’t be able to spend time oil painting in retirement, maybe it makes sense to make painting a priority today.  Am I neglecting friends, family, and charity today in favor of potential time for these things later?

It’s Not an Either/Or Question

It might not even be a money question.  Do I give up binge watching Stranger Things so I can spend time with my 1-year old binge watching Meet the Colors?  The answer for me was yes and now our whole house has inside jokes about the opera-singing color Yellow.  This didn’t require an asset allocation change or a shift to telecommuting, just recognizing a goal that I knew I had (spend time with the kids) that is easy to let slip away.  My fear is that one day I will look up from my smartphone (or other addictive algorithmic entertainment curation platform) and wonder when my boys turned into men and who was guiding them while my face was buried in a screen.