Monday Market Update – September 13

Forefront‘s Monday Market Update

Money doesn’t buy happiness

I had a conversation with a younger client of mine this past week, and I could tell he wanted to ask me something, but was kind of skirting around the question. We went over his savings plan, cash flow planning, and budget. When we started going over his brokerage account that he had been adding to every month, he couldn’t believe that in the short period of time I have worked with him, we have been able to save more than $50,000, all without altering his lifestyle. After seeing how much he had, he finally came out with it and asked the question he had been waiting the whole meeting to ask me!


Should I move to Hoboken?

He asked me, “can I move to Hoboken”? He quickly went into why he felt guilty asking, and that he knew it altered his plan and he didn’t want to stop the success he has had thus far. I pulled up the apartment he was looking at on and went over the logistics with him. He would be living with a few of his friends, in a high-rise overlooking Hoboken with views of NYC. His rent would be around $1500 a month, which would be a direct expense because he currently doesn’t pay rent.

I went over the lease with him, helping to explain the verbiage and jargon that all leases contain that are designed to confuse most people. Once we were done, he asked again “can I move to Hoboken?” I told him not only can he, but after speaking to the attorney I recommended for him he should sign the lease ASAP. At his age, with the level of responsibility to anyone other than himself, now was the perfect time to make this change, and more importantly he was going to live with a couple of his best childhood friends. Could he save more money if he didn’t move? Yes. Is that the right decision? Not to this financial planner.


Harvard Study of Adult Development

In 1938, one of the largest studies on human happiness began, and followed the lives of 268 Harvard sophomores. The study tracked everything about these 268 people, including their health, careers, relationship, and much more that was recorded for the study. After gathering a literal lifetime of data from these people, an incredible, yet unsurprising conclusion was drawn. Money and fame don’t actually determine happiness. Close relationships, more than money or fame, are what keep people happy throughout their lives.

One thing Covid has made very clear is that technology has allowed many of us to work remotely, which has led me to continually tell my wife we should move to a lower cost of living area. Normally she just brushes me off, but she finally engaged with me a week ago and told me to lay out a plan for her. While I was laying out a plan, it slowly dawned on me that we can’t move.

Lower costs and expenses are always a good thing, but living in New Jersey, with such a close proximity to NYC offers my wife and I something that we never really thought about. Connection. In the early part of my life, I moved a few times, and I saw connections with friends, and even some family go from daily connections, to the occasional phone call or even slip out of each other’s lives all together.  But we live near a city that tends to have people pass through it at some point for work or leisure, and every single time someone comes to the city, I get the text or call to get together. Those occasional times we are able to get together and reconnect are some of the most joyful times in my life, and I realize that I pay the higher costs to live where we live because of the connection it offers me.


Financial Planning for happiness not performance

It’s getting harder and harder for people to see it with the 24-hour news cycle, and meme stocks taking off, but financial planning success has very little to do with performance, and everything to do with creating a lifestyle built around you being happy. Maybe that means you want to learn to fly a plane, and eventually buy your own Cessna. It might be to own a home on the beach where your children and grandchildren gather for holidays and the summer and gives you a tremendous amount of time with family. Whatever the goals might be, performance is a helpful way to get there, but planning for performance will never work. Planning for happiness is what matters, and has a 100% success rate.


So What?

So how does this impact all of you?

  • Personal connections dictate future happiness more than money and fame.
  • Financial planning should be about reaching maximum happiness, not maximum performance.

Stock market calendar this week:

Tuesday September 14th:

Core CPI @ 8:30AM

Thursday September 16th:

Initial and continuing jobless claims @ 8:30AM

Most anticipated earnings for this week:

The McNamara Fallacy makes us all focus on what is easily measurable and quantifiable. One of the things we fail to ask our advisors, attorneys and accountants is “What is your decision making process.” We address exactly what our decision making process at Forefront Wealth Planning is in the latest episode of Understanding the Power of Money.
Listen to episode 15 of Understanding the Power of Money.