Dancing in the Dark

During this challenging period, I reflect on the challenge of trying to make informed decisions where there is an absence of clear facts. A quote attributed to English mathematician, philosopher, and inventor Charles Babbage immediately comes to mind, “The errors which arise from the absence of facts are far more numerous and more durable than those which result from unsound reasoning respecting true data.” Essentially, when people don’t have facts, they tend to make up stories. And this can easily result in uninformed decisions. 

The current COVID-19 crisis provides numerous examples where emotions can form our reality, from “This is just the flu, don’t worry” to “Sell everything, the economy will never recover.” Given the range of health risks and unknown economic impacts, there is a lot about which we should be scared or concerned. In fact, I find that for many, myself included, the biggest stressors relate to what cannot be controlled. 

When stressed, I remind myself not to overthink about the past and what I should have done. I remind myself that those past decisions were based on the facts and information I had available at that time. Similarly, I try not to project too far into the future, as this does not seem too constructive. Like the famous line about the economist who predicts nine of the next two recessions, with enough effort, I could also project a wide range of possible negative outcomes. That effort seems neither productive nor helpful. 

My stress levels are reduced by focusing on what I can control. That leaves me with living in the present, acknowledging my current circumstances, and what I can control and do right now. Here are my immediate ideas:

• Listen to the experts on this health crisis and follow their lead
• Reach out to your friends or colleagues who are panicking or struggling
• Express gratitude and appreciation 
• Help those less fortunate (including local businesses as well as your cleaners, babysitters, yard companies, personal trainers, etc., who are really struggling right now)
• Give to a food bank or your favorite charity
• Try to find enjoyment in the place where you are right now so not to miss the beauty and joy right under your nose
• Create or update your life plan - figure out what brings you joy and fulfillment and map out how you can get there financially

Advising families for over 30 years, I have seen how periods of uncertainty and stress have driven a wide range of decision-making. For those who have not done any planning, the refrain I hear most often during these kinds of tough periods is “I will have to work forever” or “How much do I need to retire comfortably?” Obviously, the amount needed directly depends on what one spends. However, what we find is that clients who can identify what gives them personal fulfillment or joy are better prepared to develop realistic, fact-based financial goals. As you have more time now to self-reflect and appreciate with family and friends, this may be the ideal time to figure out what brings you fulfillment and joy. 

In the movie The Martian adapted from the book by Andy Weir, astronaut Mark Watney is stranded on Mars and eventually miraculously rescued. In speaking to a group of cadets at the end of the movie, he says, “At some point, everything is going to go south. You’re going to say ‘This is it. This is how I end.’ You can either accept that, or you can get to work. You solve one problem, and then you solve the next problem and the next. And if you solve enough problems, you get to go home.”

Let’s get to work!

By Bob Len, CPA, Managing Director