Mindful Money

Simple Practices for Reaching Your Financial Goals and Increasing Your Happiness Dividend

Jonathan K. DeYoe

• Publisher: New World Library
• Year: 2017
• ISBN:
  9781608684373
• Topic: Commerce
• Subtopic: Gestion de patrimoine

Is it possible to be a conscientious citizen of the world and grow wealth? The author, a Buddhist and a financial planner, says yes and explains exactly how. Money drives many of our decisions. We all worry about earning it, spending it, and saving it — regardless of our income level or spiritual perspective. Yet few of us understand money's true nature. Jonathan K. DeYoe helps you create a unique financial plan that is guided by your deepest beliefs, and shows you how to save, invest, pay off debt, and fund your retirement and dreams by building a lifetime income stream. With a foreword by Pulitzer Prize–winner Alice Walker, Mindful Money does all this while emphasizing that money is a tool you can use to support your lifestyle, reach your goals, and earn the "happiness dividend" everyone deserves.

SECTION THREE

Making a Plan

CHAPTER 19

Human Out, Human In

A garden is a grand teacher. It teaches patience and careful watchfulness; it teaches industry and thrift; above all it teaches entire trust.

— GERTRUDE JEKYLL

We’ve examined our illusions and we’ve looked at happiness. What’s the true connection between the two? In a very real sense, they represent two sides of human nature: the problem side and the solution side. The inherent conflict between those two sides requires us to perform two key tasks when we create our financial plan: take the human out and put the human in.

Creating a financial plan is a lot like digging a garden. That is, we need to weed out the most problematic aspects of human nature — the panicky, fickle, self-defeating behaviors that can sabotage our long-term vision — and systematically exclude them from our financial planning and execution. Then we need to mindfully cultivate the highest, most-evolved, positive aspects of our humanity — our pillars of happiness — and plant them firmly in the center of our plan.

The following chapters of Mindful Money will guide you through eight basic financial steps you can take to grow your happiness dividend. These include the following:

1. developing your Vision,

2. starting the saving habit,

3. building an emergency fund,

4. eliminating high-interest debt,

5. investing for retirement,

6. eliminating low-interest debt,

7. increasing your emergency fund, and

8. investing in a taxable nonretirement account.

These eight steps will help you develop a financial plan that is based on a solid understanding of your Here and your There and that is informed by who and what matters to you most. The appendix in Mindful Money contains a very simple template (“Your Financial Action Plan,” see page 255) that you can use to document your financial plan, and I’ll ask you to turn to it periodically as you strategize your journey in section 3. In addition to walking you through each of your plan’s eight steps, I will also explain the least-complicated approach to money management I know.

This simple and sane strategy will help you remain calm when markets are turbulent, so that you can stay focused on the things that bring joy to your life and so you can shield yourself from the panic, doubt, and mind-flipping that so often complicate money matters.

Failing to account for what really makes us happy when we create a financial plan leaves us vulnerable to advertisers constantly pitching their wares and to the panicked voices of financial pundits that barrage us every time we turn on the television or computer. Instead of picking a lane and driving calmly down the road, they encourage us to make one jittery financial maneuver after another: buy this car, sell that stock, jump in and out of the market, find a new guru, repeat.

We don’t have to let unskillful desires, the financial media, or fear guide how we manage our money. There is a better way. A way based on trust, inner stillness, and confidence. That’s the way we will go.

TUNE OUT THE NOISE AND KEEP IT SIMPLE

The financial world is a noisy place, full of nonstop chatter and conflicting advice. Can we beat the market or should we just join the market? Avoid bull markets or run with the bulls? Buy or sell? Invest now or later and in what? Whose advice should we follow? Some experts make economics sound more complicated than physics, and if even the experts can’t agree, what chance do regular folks have of figuring out who has the right answer? Hint: it’s probably not a pundit on the radio who doesn’t know our kids’ names, where we work, or how we like to spend our days off.

To make things still more confusing, Wall Street keeps changing its financial story so that it can create new products and services to sell us. As you may recall, the Buddha compared our minds to a monkey, constantly distracted, swinging madly from one branch to another, looking for new fruit. Managers and marketers on Wall Street also know that the human mind is fickle, so they jump up and down and make a lot of noise, hoping to lure us to the next bright banana they’re selling. If that doesn’t work, they try to undermine our confidence in our ability to make sound financial decisions for ourselves because we lack their experience and investment savvy. Another hint: investing isn’t rocket science.

It is darn near impossible to discern any actionable message from the noise. My solution? Don’t even try. Tune out the noise completely. Calm your monkey mind, walk away from the tree, and sit still. Stop constantly worrying about the who, what, where, when, and how of investing. This doesn’t mean you should bury your head in the sand. Rather, in the coming chapters, I will explain the steps to take to make, document, and follow a mindful Financial Action Plan. This involves building a diversified, balanced portfolio — with the help of a trusted financial professional if you need it — and establishing a regular investment program that you stick to in good market times and bad. Then, you can turn your attention to what makes you and your family happy and focus on that instead. Pursue your pillars of happiness and stick to your Financial Action Plan. No matter what.

The bulk of what most of us should do with our money comes down to a handful of simple, timeless practices. Those practices worked a hundred years ago, and they still work today. Simplicity is the key. These eight financial steps don’t require putting our faith in the “right” guru or oracle. The only leap of faith we’ll need to make is optimism. We must wholeheartedly believe in just two things:

1. The future of humankind

2. The long, long—term growth of the global economy.

Once we accept the premise that global economic growth will continue its historical, slow, meandering, but inevitably upward trajectory, 90 percent of our financial and investment research will be done for us.

However, there is that remaining 10 percent. Like I said, we can’t just bury our heads in the sand. The eight financial planning steps we’ll walk through together follow the middle path between obsessing over money and ignoring it. They include some very specific practices that can be challenging to carry out — not because they’re complicated or difficult (they’re not) but because they require making trade-offs. For our long-term financial plans to succeed, we must often sacrifice some momentary pleasures. We must live within our means. We must earn enough. We must save enough. We must invest enough.

The path we’re going to tread is about setting behaviors in place that can help us win the meet. The goal isn’t to try to win every single race. At times, the entire economy will take a dive, and we will suffer financial setbacks, both real and on paper, both in our careers and in our investment portfolios. That’s the cyclical what is of the stock market and of life. Setbacks happen. Expect them. Panicking during a downturn does not serve anyone’s long-term financial plan.

Remember, investment losses only occur when we take action — that is, when we sell low because we’re freaking out. When stressful times hit the markets, the economy, or your life, zoom out, remember your goals, and hold yourself accountable to your Financial Action Plan like that Zen master with a stick. Be patient. Don’t lose conviction in the careful investment decisions you made with a clear head in calmer days. There’s no good reason to be fearful or act mindlessly. Follow your plan and you’ll be fine.

Part of being fine requires accepting that the noise, your shenpa, and that no-good monkey mind will never stop trying to play with your emotions. The pitchmen will continue to sell. The gurus will continue to preach. There will always be fascinating new voices with fascinating points of view. But those people with the bullhorns do not have crystal balls. Never did, never will.

MEANWHILE, BACK AT THE GARDEN

Family travel is one of my biggest pillars of happiness. So is our family vegetable garden. As I write these words, the four of us have just returned from a two-week trip to Greece, and I am blown away by what happened in the garden during our absence. Our return was met by two twelve-inch pumpkins that didn’t exist when we left, along with a brand-new harvest of snap peas, pole beans, lettuces, and cucumbers. All of this bounty simply arrived because we took the correct steps early last spring.

Growing money is an awful lot like growing vegetables. We need to follow some very specific steps — and then do nothing but water. For vegetables, we must choose a sunny location, till the soil, plant the right seeds at the right time, feed and water the shoots, clear the weeds, erect a fence to keep out critters, and leave the vegetables alone till they ripen. Do those things and growth happens. On its own.

Anyone who believes they can grow vegetables without taking these steps is sorely mistaken. To complain that the rules of vegetable growing are too restrictive, or intellectually unfashionable, would be pointless. They are what they are. When we do take the proper steps, the results follow. Some growing seasons will be better than others, but over time our labor will be rewarded with copious amounts of fresh produce.

The principles of vegetable growing have not fundamentally changed in ten thousand years. The steps are not glamorous or fun, but they’re not complicated either. Do them and nature will handle the growth. Ignore them and all the advice we read from gardening experts is for naught. Investing is very much the same.

Another lesson from gardening? Trust the process. If we get nervous about how our seedlings are doing, we know we can’t pull them up to check on them. That would only short-circuit the very growth we wa...