Our Thoughts on Benchmarking Your Financial Life

FIVE THINGS YOU SHOULD KNOW

1. Equity Markets – were lower this week with U.S. stocks (S&P 500) down -2.70% while international stocks (EAFE) fell -2.15%
   
   
2. Fixed Income Markets – also declined with investment grade bonds (AGG) down -0.99% while high yield bonds (JNK) fell -0.13%
   
   
3. Yields Still Rising – Treasury yields, especially on the short-end, continued to surge this week after Fed Chair Jerome Powell reiterated the Fed’s bias for an aggressive rate hike path with investors now betting on a 50-basis point in May and June. Meanwhile in Europe, traders are expecting the European Central Bank to brings rate above zero for the first time since 2012.
   
   
4. China Struggling – a new wave of Covid-related lockdowns in China has seen economic growth grind to a halt and heavy losses on their stock exchange. So far in 2022 the Chinese stock exchange has lost $2.7 trillion of market value with policy makers scrambling to halt the decline.
   
   
5. Key Insight – [VIDEO] Tim breaks down how we think about benchmarking performance within our investment methodology, including where it can be helpful and where it is often misplaced and/or misunderstood. [ARTICLE] In the article this week, Ben discussed benchmarking and performance of another kind … achieving happiness and peace of mind through proper planning, both, financial and outlining one’s true goals.
   
   

INSIGHTS for INVESTORS

Planning for Maximum Return on Happiness (ROH)

by Ben Klundt

As a parent, the main thing I want for my two boys is for them to grow up and be a productive member of society, know they are loved, and to be happy and content knowing they are doing their best. Somewhere along the way in life, many of us let experiences hamper our ability to enjoy the “small” things and to chase what we are most passionate about. We create new ideas in our minds of how things “should be” because that’s what society “expects” of us. Working with so many people over the years has taught us a lot, and one important lesson is the peace that can be found by taking the time to truly define one’s top priorities and getting those things put right.

This is true for goals whether they are specifically about one’s finances or not.

When it comes to financial planning, we want to create a plan that we can be confident will provide a lifestyle for you that maxes your ROH by addressing the subconscious biases and expectations that live within us all. That includes discussing how you innately think about money, or things you have learned over a lifetime, that may hamper your own personal ability to maximize your ROH.

Have you ever spent money on something only to ask yourself the next day “why in the heck did I buy that?” Have you neglected to buy something you always wanted, even while you had the money in your checking account to do so, because it just never felt “safe” to do so? These are two common examples of times when your past experiences/biases may have crept up to dominate the way you spend money in a way “out of alignment” with your true goals.

When it comes to money, we found that people generally fall into three camps in varying degrees: the spender, the giver, the protector. Now while some of these definitions could sound negative to some, none of them are right or wrong, they just are – and I’m trying to have a bit of fun too. Just like it’s not right or wrong to be tall or short… though I am 6’4” so I am a little bias to the tall side. ;)

Here are those profiles:

The Spender:

This is the person that’s constantly on Amazon and gets joy out of the idea of the one click purchase feature. Ok, there’s more to it than that. The spender could have the other profile traits as well, but this is their dominant trait, that they get joy out of the things money can buy and living for today. This profile commonly opts to not defer and save for the future at the level they should because that would means having less money to spend now.

The Giver:

I lovingly joke, this is the person who will give you the shirt off their back then at the end of the day notice they don’t have a shirt on. They may sacrifice their own well-being to a big degree to help others. These folks have a massive heart for helping others: family, friends, church, the individual on the street corner and will help them at the expense of every being able to save for themselves and the future they have ahead of them.

The Protector:

This person finds the most value in money from the perceived security/protection it can provide. While, a “hoarder” may come to mind, I am not talking about your great aunt Janice (I apologize if you’re the great aunt named Janice) that has 6 cats, grocery bags filled from the 80s and stacks of magazines all over the house. I am talking about the person that simply didn’t buy the item they always wanted or didn’t take the family on the trip they always dreamed of, even when they had the money to do so and everything else was taken care of. This person may sit on a pile of money through retirement and never feel truly empowered to spend it on the things or people that bring them joy.

As a financial advisor, it’s important for us to know which category relates the most to you. Not to change you, not to judge, simply to speak most clearly to the feelings that drive your decisions and may keep you from living your best life. At the end of the day, we manage your money and money is merely a tool. It’s a tool that should be used to allow you and those you love to live your best and fullest life. When we know what drives your decisions on a gut level, we are able to better partner with you, and create a financial plan that will enable you to make the best decisions for yourself.

Financial planning is about equipping you with a framework to guide your decision making in accordance with your highest values. We take great pride in empowering our clients with the critical information they need, whether that’s tough information to hear or a very pleasant surprise. Our process can vastly improve your odds of achieving your lifelong goals by helping you define and stay on track and may even help you dream up some new ones too.

As always, we’re here for you through the good and the hard times, working our hardest to create a plan and a portfolio that gives you the best chance at maximizing your Return on Happiness (ROH) (trademark pending?) ;)

Have a wonderful weekend and be happy.

Ben and the team at Ten Capital