Lack of Control
Lack of Control
Amidst worrying about white swan events and giving myself permission to suck, I have come to some conclusions about the way I work. Struggles with retirement and work life balance should not be surprising. I have been trying to wrangle the control of just about every aspect of my life since childhood. Although these attempts have generally helped make me a successful, independent adult, they also can lead to anxiety and confusion. One of the big parts about moving towards a more purposeful life is realizing that there is a certain lack of control that one must accept.
There is that which we can shape. That which we can endure. And that which we can accept. It is the same whether we are talking about financial independence or relationships.
Risk
Every ounce of living requires risk. Our finances are no different. If you invest in the stock market it could crash. Leave your money in cash and there could be a run on the bank. If you stuff your mattress you could be victim of a theft. The act of having means that you are at risk for losing.
We cannot erase risk. We can only mitigate, For this reason, insurance was created. Mathematical models were formulated. And people created plans and back up plans. Plan As and plan B’s. We study diversification and learn about the different assets classes. We create multiple revenue streams and develop hustles on the side.
But no matter how hard we try, the lack of control is still abundant. There are only so many contingency plans we can create. Ultimately, acceptance is the only path to sanity.
Over Planning
At some point, the lack of control can lead to anxiety. The attempts to minimize that which is infinite can never bring joy. Talk to anyone who calculates the sustained withdrawal rate in the 2% range. They are looking for an answer that is bulletproof.
Perfect, however, is the enemy of good. There is no such thing as the perfect financial or life plan. Holding on too tight does not bring happiness or joy. It brings stress and pain.
Over thinking and over-planning often bring misery. Not only because they set one up for unrealistic expectations but also because reality is rarely so neat and tidy.
Imperfection
I am trying to embrace the imperfection in my life instead of fighting it. My best laid plans only come to pass a percentage of the time. As I work towards half retirement, I am trying to take setbacks in stride. Maybe the nursing homes can’t find coverage for me as quickly as I would like. Maybe my blog or podcast won’t grow the way I was expecting.
In order to evolve to the next level, I must find a way to accept this lack of control. Not only to abandon expectations but to embrace uncertainty.
I believe this is the only way to financial and personal peace
Final Thoughts
I am coming to terms with the lack of control in my life. I have no say over financial markets, real estate trends, or the thousands of things that can go wrong. Although I can risk mitigate as much as possible, there is another aspect to the solution. Acceptance.
At some point we have to accept that which we can’t change.
Control is an illusion. You must be very clear on that or it will drive you crazy. You are trying to live a future projection as if it’s real and projections aren’t real, they are mirage. When you made way too much money you didn’t bother with projections because you had a nice life, the security of a W2, and were accumulating. In the time of deflation you are spending down accumulation with no W2 security. What I did was look at all the money I made in the 49 years I worked added that up. From that money I had sent 2 kids to college bought a dozen cars, a couple houses, paid for medical school and college, got married and started a household, traveled all over, paid taxes, and bought myself a portfolio. My portfolio was worth almost twice what my previous 49 years of life had cost even considering that the portfolio was funded with that cost. I’m not living another 49 years so my net asset value could effectively fund the cash flow of 2 retirements equivalent to the life I had been living. This is a really important point. If you start with enough in reality then it’s not a mirage.
If you retire without something like virtually 100% of need then your future is mortgaged to some rate of return. The rate of return @ 100% need (say 4M) is just inflation so say 2%. if you retire with 75% of need (say 3M) you have a 3% mortgage on your future. 50% of need (2M) is a 4.5% mortgage and 25% of need (1M) is a 7% mortgage to claim enough money to not be broke before you die. Understanding this IS control because it takes into account the liability of leverage. More leverage more discomfort. No professional financial analyst worth a crap will do a 4% x25 calculation. They will do the above calculation and your level of risk is your level of leverage plus unknown things like war. This projection starts with actual need based on the cost a life lived and not some “number” pulled out of thin air. Retirement is generally less costly the older you are so a less costly life factors in as a fudge factor. For me understanding this relationship was the key to my peace. It collapsed the wild variability of the projected future into something highly probable, and something I could easily live with. I then “tightened my belt” to see exactly how that would feel and if it felt OK to my wife. Living with a tight belt was also very adequate, so I had a nice range of cash flow in which I could operate. As my plan unfolded I checked its reality against the projections and projection and reality had a very high degree of correlation, so I quit worrying about it, and turned my attention to other things.
I find it so interesting you are working through the exact steps I worked through in pretty much the same order. Chronicling the process is important.
Is fonancial freedom the dream and financial peace the reality with the only difference being financial acceptance?
Maybe so.
You are very awake, Doc G !
I have found that some things are in our control or give that illusion, most are out of our control.
That which is out of our control is requesting our acceptance and our trust .
You’ve hit on it with your comment , “In order to evolve to the next level,
I must find a way to accept this lack of control.” It’s the way . ( I’m evolving to my next level too ; )
I definitely think this idea of evolving and acceptance are closely tied.
Agreed