Tuesday, October 14, 2008

Information Overload

To say there is a lot going on these days is an understatement. There's the upcoming election, the turbulent economy, the wars, global warming, the sky-rocketing cost of college tuition, etc., etc., etc., (you subsitute). The challenges of decision making are well beyond the paper or plastic question that has stymied so many at the checkout line. (I choose paper whenever possible or bring a reusable bag. If plastic is the only choice then I make sure I properly recycle that plastic or reuse it somehow. I takes about 1,000 years for plastic to breakdown in landfills, so it's best to keep plastic bags and other items out of the landfills if at all possible. Okay, that's my environmental plug!).

Fear not, there are so many people right, wrong and everywhere in between that want to influence your decision regardless the topic. I find that for those who are generally indecisive and insecure tend to be the most susceptible to information overload. You can tell because they get that glassy look in their eyes and basically become paralyzed when asked to make a decision -- or they panic. I've noticed a lot of that lately. I dared to look at my retirement account over the weekend and I lost more than $30,000 in value. Normally, that would send anybody into a tizzy but then I sat back and put everything into perspective.

I have at least 15 more years of an investment horizon and employment future. I happen to have one of those jobs that's fairly secure, at least as secure as they come, and I actually like my job. I also know that the stock market will rebound. Now, I believe we won't be seeing the extreme highs we've seen the past decade because I've always believed that we've been living in a state of excess for the past many years - me included - but I believe it will be okay and more stable in the future provided we learn our lessons from the past decade plus of financial overindulgence. I know I'm learning quite a bit.

I remember when I was first commissioned as an officer in the U.S. Army back in the late 70's, I made a whopping $10,050 for my basic pay that first year and I thought that was a ton of money. I grew up poor, babysat for $.50 an hour and in college gave blood plasma with the winos to get money for my textbooks. So, I lost more money last week than I actually made my first year as an army officer. Really puts things in perspective doesn't it? I still have a chunk left in my account and I will absolutely continue to contribute as I'm now getting more shares for my dollar but I've always watched my account and know that timing is a critical part of investing whether inside a retirement account or not.

I think the one thing we all need to do is step back and assess our own situations. As indicated, I know that I have time to recover most of my losses. I also know that I am now buying shares at a reduced price and believe that those shares will gain value over time. Basically, I have time on my side and not everyone is so fortunate. At some point I will shift my account to more conservative funds but now isn't the time. In my opionion, now is the time for me to continue to take some calculated risks.

Now I'm not making this decision lightly. I've made it a point to learn as much as I could about investing over the past many years. I've allowed myself to absorb information at a mostly comfortable pace and develop an almost organic sense of what to do. I feel confident in my choices and most of all I count my blessings. I know what it's like to be dirt poor. I know what it's like to not know if I'd be alive the next day let alone have something to eat. I feel very fortunate for everything I have and for where I'm at in my life. I think about all the generations that have come before mine and recognize the struggles they've had to endure and believe it or not most Americans have more than most others in the world, despite the recent economic woes.

So, the moral of this story? Learn what you can at a comfortable pace, especially concerning the critical issues such as health, retirement and family. Appreciate everything that you have, especially your loved ones. As the commerical would say - they are priceless. Money really can't buy you happiness, it can buy you things, but it can't buy you happiness. I'm as motivated as the next person to earn what I think I'm worth but I keep it in perspective now, a lesson that has had some remedial sessions with me.

I use to be in information overload, now I'm in information flow and loving every minute of it. I like my life, my neighbors, my friends, and am excited about my future. I wish the same for everyone else.

1 comment:

Morgan Mandel said...

I'm being a bit careful since I'm older and closer to retirement. Still, I don't want to cash everything in right now. I'm hoping everything will get back to at least where it was before. Then I'll decide.

Morgan Mandel