Fantasy-Based Financial Planning – Part One

Buttercup: You mock my pain.
Man in Black: Life is pain, Highness. Anyone who says differently is selling something.

– The Princess Bride (1987)*

Oh, Yahoo! Finance, your articles are so helpful to my blogging.  It’s like shooting silly fish in a clown barrel, it’s that ridiculous.

Blue Fish from childrens classic "One Fish, Two Fish, Red Fish, Blue Fish" by Dr. Seuss

Despite Blue Fish's rakish pose, he is unlikely to dodge a gun shot into his barrel.

Today’s “Seriously?” moment is brought to you by MarketWatch via Yahoo! Finance, in an article entitled “10 Secrets to Being a Millionaire and Enjoying It” by Paul B. Farrell.  Here are some of the brilliant insights (I’m using sarcasm) offered by the article, with my comments beneath, in blue.

“In short, you can still become a millionaire. Here’s the secret: It’s all in your head, your attitude, your state of mind. If you want to retire a millionaire, you can. Here’s how: You control your mind.”

Oh, really?  I thought the secret to being a millionaire was having a net worth of at least one million dollars.  But, you say the secret is that I control my mind.  Do go on.

“A few decades in business, and years writing about behavioral economics and psychology have convinced me of this one simple truth: Becoming a millionaire really is all in your head. It has little to do with wealth-building techniques, tools and rules.”

So, having a net worth of one million dollars or more is not a function of knowing wealth-building techniques?  Color me skeptical.

“In fact, you could forget all the usual stuff: asset allocation, stock picking, savings plans, budgeting and so on. I know, that’s what the experts tell you to focus on. But if you’re not in the right state of mind, none of that matters.”

Oh.  I see what you’re doing there.  Let’s take a minute to look at it.

First, experts are telling you to focus on savings plans, budgeting, and wise asset allocation because it matters!  Paying down debt, saving, and investing money are the number-one, nearly-sure-to-work methods of building up your net worth.  It works better than anything of which I know.  How does this work?  Paying down debt decreases your liabilities, which increases your net worth.  Saving and investing generally increases your assets, which increase your net worth.  Continue increasing your net worth until it is one million dollars, and you’re a millionaire.  Congratulations!

But, instead of focusing on tangible steps to increasing someone’s net worth, you suggest we instead focus on having the right state of mind.  Do you know how many of my life accomplishments I’ve achieved with the right state of mind?

Not one.

My Bachelor’s of Science in Financial Counseling and Planning, my black belt in Karate, my CERTIFIED FINANCIAL PLANNERTM** certificate, and so on?  Not a one was achieved with a state of mind.  They were achieved with habitual, consistent, effective application of effort over an extended period of time.  You decide what you want to accomplish, how to accomplish it, do the work that’s required to accomplish the goal, then you’ve achieved your goal.  Sure, a “right state of mind” feels good, but that’s all there is to it.

“But I keep coming back to this one simple fact: Becoming a millionaire really is all in your head. Period. No excuses. You decide to become a millionaire and it will happen — in a bear market, a bad economy or riding a bull.”

Sometime I feel like the only person who acknowledges that reality is something that occurs outside of my head.  Let me give you a tip:  just deciding you want something is nowhere near enough to actually make that thing happen.  Deciding to be thin doesn’t guarantee you’ll be thin.  Deciding to be a millionaire doesn’t guarantee you’ll become a millionaire.

You know what, there’s so much silliness in this article, I bet I can stretch it out to a few posts – part two to come!

The Princess Bride is the finest movie ever created or conceived by mankind, and will stand as a testament to the glory of Western Civilization and movie-making for all time.  Seriously, why are you reading this post?  Go watch the move.  Go.

** The CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS, INC. requires that this be capitalized.  For real.  I’m not yelling, they are.

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