There is little or no conflict about what to buy.
No laborious, gut-wrenching decision paralysis.
Rational choice strategy hardly matters at all
when you see something you want. Just get it!
Evaluation is easy; justification easier.
It’s amazing how decisive you are in the face of
inadequate information, time pressure, ill-defined goals.
Need I add – shortage of money.
But when goals are unclear the trouble starts.
Unless you know what you want to accomplish
no mount of stuff will get you there.
And with any ill-defined goal, how do you know
if your decision was right or wrong? Of course, you don’t.
Factor in all the financial choices you make every year and
there is room for ambiguity, waste, and large amounts of folly.
I’d like to think that buying a house and a car remain
the exceptions in this non-comparative process of decision making.
Here, if anywhere, is when you must actually weigh the evaluation
of options for their superior merit prior to purchase.
Most people get it that these should not be impulsive.
The challenge is to move more of your other spending
toward the satisfaction of longer term goals.
There is no reason to believe this makes for less fun.
Copyright 2010 William M. MacKay
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( 2.9 / 60 )Do you remember how happy you were back in the good times?
And how does that feeling of well-being compare with today?
In spite of the Great Recession, you might have had a lot less then.
If you are old enough to remember houses were smaller 35 years ago
As much as fifty per cent smaller when you count square footage.
There was enough room, too on the highway to actually get somewhere.
And the space on your hard drive was less than a turbo stick.
What space you are in today is more about emotional space
than what you can buy with your income, dividends, and coupons.
And you have, on average, much more of those than before.
Yet, very little has changed, the experts tell us, about our happiness.
What happens is that you quickly adapt to improved situations
and peaks of satisfaction and pleasure that arise with something new.
Even bigger incomes and lottery winnings can’t maintain the emotional
high that comes with them and you are soon no happier than before.
This affect is more than a passing curiosity.
If getting more of whatever you use to keep score and feel good
is no longer able to raise your level of gratification and happiness
then why keep doing what you have always done?
The point of working longer and harder is now suspect.
Better to stop doing that and try something else.
If you don’t you might suddenly find yourself old and grey.
Perhaps too tired to keep on trucking until everything is just right.
Accept that there is no perfect moment
to get on with doing what you want.
And it’s okay to settle for ‘optimum’ conditions.
But identify these you must to move on wisely.
Wanting it all in maximum proportions
May never be enough to make you happy.
Copyright 2010 William M. MacKay
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( 3 / 47 )We all share the same goal.
Male or female, young or old, white or black, rich or poor.
The incentive to act is identical…TO GET WHAT YOU WANT.
This is good, part of your original equipment.
Only when what you want is in conflict with other elements
do the challenges arise and present a critical test.
How do you get what you want when the means to the end is blocked?
Your means may be illegal, immoral, unethical, or an attack on what others want.
But most likely it is all about you and your expectations.
What you are pursuing may simply be unrealistic and at odds with your abilities,
education, or income in the context of today’s economy, culture, and traditions.
So here’s the test.
What do you really want?
Dive deep on this one because it may not be what you are getting today.
And there is lots of help out there to engage you in this exercise.
If there is an abundance of anything it is ideas, and many are free.
They offer you a great chance to live a little better day by day.
In time, with only modest changes to your attitude and desires,
what you want will be moving closer to what you have
and, more important, what you want to be and feel.
Changing your behavior is what’s required.
You can’t pursue what everyone else is doing.
It’s not to your benefit because their imagined goals
are no better than you’re imagined goals.
To make matters more challenging the system is also flawed.
Pick any area of life and tell me if corruption is not at play
in some arbitrary form that impacts equality, justice and fairness.
On your side, nonetheless, is a history of hope for a better life.
This is a truth we can count on.
But you have to help yourself and be responsible for what you get.
It is so much more fun when it’s what you really want.
Copyright 2010 William M. MacKay
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( 3 / 55 )A powerful pressure exists to make you poor.
At first glance that seems ridiculous.
Economic growth and a rising standard of living
have taken on biblical proportions as the righteous path
to a better, more fulfilling, and meaningful life.
As the tide rises we will all be better off, right?
The partner of economic growth and good times
is the aspiration to get rich, to have more, be more.
This is a critical element of the package.
But consider this.
For every force there is an equal and opposing one.
That’s the law of physics. No argument there.
Spending is that other opposing force.
It gets you moving along the path to acquire the good times
because you believe, in part, that your life is wanting, lacking.
You get that from the cultural, material and media messages
that create a self-dissatisfaction, a sense that you are
below standard, an imperfection that needs fixing.
There is an urgency to get it right when your value
is conferred by stuff and others who create a standard
of longing which is near impossible to achieve.
For good measure the bar is raised every now and again.
Each time that happens you review your standing, your progress.
What you “check out” in this exercise is much more than an inventory
and evaluation of where you are, what you have, and how you look.
It becomes an exercise in acquiring more stuff, more fixes
for what is lacking and needed for recognition, satisfaction.
That this spending has become an opposing force
far greater and more powerful than the original driving force
that started it all is evidenced by the fact that your debt
to disposable income ratio is so unbalanced in favor of debt.
The laws of physics shall prevail, however.
Equilibrium will be restored. Prepare for it.
Copyright 2010 William M. MacKay
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( 3.1 / 53 )Saving is still losing the battle with credit.
Its status as a bystander in the cultural shift
to instant gratification has changed only modestly.
As a financial principle that served earlier generations
saving was considered essential before making a purchase
of something special you wanted. Then came the seventies
and the explosion of credit cards became a tsunami through 2007.
We are all familiar with what happened next.
“I want it all and I want it now, thank you very much”
become the call that echoed throughout the malls.
Today, when a household’s debt is 150% of its disposable income
saving as a financial principle has surely eroded to the point
where it is non existent among no less than a third of the population
who have nothing put away for retirement.
I bet 50% of people fifty and over couldn’t make it
through the first year of any forced retirement (unemployment)
given their current consumption pattern and the value of their assets.
Now what?
I travel on both sides of the US/Canada border and I haven’t seen
an empty shopping mall parking lot yet. But we’re told saving is making a comeback.
The speed of this reversal to thrift relative to the pace of debt accumulation, its total dollar amount, and what it will take in income saved to whittle it down is a huge concern.
Spending less is the surest path to that victory.
Earning more would be nice, too but that doesn’t look very promising
in the immediate future. Cutting back on consumption and redefining
your wants versus your needs now remains the best strategy
for instant gratification if saving is what you want.
This could be the fight of your life.
Copyright 2010 William M. MacKay
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