The Financial Things You Can Control


The world is getting more complex, and with complexity comes confusion. We are constantly bombarded by reports of things like quantitative easing and de-leveraging. No one really knows what long-term impact these things will have, given that we've entered uncharted territory.

Whenever we're faced with things that we don't understand, it can generate anxiety and fear. Real people often do obsess over the consequences of future events, even if they are almost always beyond our control.

So here three things to remember when you feel like you have no control or understanding of how the world is about to change:

1. These things are not problems now.
When I start to worry about future events, I've found that it's helpful to focus on what's going on right now in my life. Often, I find that I don't have any problems right now, at this very moment.

To be clear, I'm not pretending it means that I don't have things going on that could have a significant impact on my life. Without question, we all need to deal with these types of concerns, but it helps to isolate that exercise from the reality of everyday living.

2. Focus on your personal economy and stop worrying about the global one.
There's much that's still in your control if you focus on your personal economy. That's why I love this quote from Jim Rogers: "Any economy which saves and invests and works hard always wins out in the future over countries which consume, borrow and spend."

When things get really complex, I find that it often helps to focus on my personal situation. I can still figure out a way to spend less than I make and invest in myself or my business (over which I have a little bit of control). And I absolutely can get out there and work hard.

3. Forget about finding the best investment.
Most of us spend too much time scouring the planet for great investments when we could be working or trying to figure out how to earn a little more.

Making wise decisions about how you invest your money is important, but it doesn't have nearly the impact of working hard and saving more. I've found that it helps to think of earning money as my job and investing as a tool to protect the money I've earned.

Of course, that means that I might have to watch from the sidelines as the markets scream to new highs. (Then again maybe not, and that's the point!). But if taking this approach allows me to focus on earning more, starting a side business or even just worrying a bit less, it may lead to a better result in the long term.

It's also important to remember that you have zero control over what the market does and at least some control over what you do.

So the next time life starts to feel too complex and out of control, remember that you can get recentered by focusing on the simple things (note: I didn't say easy) you can do to impact your personal economy.

A version of this post appeared previously at The New York Times.

Carl Richards is a financial planner and the director of investor education for the BAM ALLIANCE, a community of more than 130 independent wealth management firms throughout the United States. Visit Behavior Gap for more of Carl's sketches and writings.

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