My wife, Beth, and I sat in front of our woodstove on a bitterly cold February night reflecting on all that had occurred to us and around us in the past nine months. One of us hit 50 years old. Of our three children; one married, one graduated high school, one graduated college, one started an awesome career, two began their first year in the military (go USMC!) and all three officially left the house. That is the definition of a transition period in life. Boy, oh boy, is the quiet deafening.
We knew it was coming, but knowing it and living it are two different perspectives. The anticipation of change did not soften the bumps or smooth out the jolt of silence that envelops our house. What did help during this transition was reflecting on some of the fairly mundane and boring principles that we identified during these past 23 years of parenting.
Style is different than fashion. Thankfully, when our twin girls were born in 1993, the 80’s clothes were out. Gone also was bouffant hair, gobs of makeup and parachute pants. But were unkempt grunge and the minimalist movement to black t shirt suits really any better? More subdued? Yes, but still not style. The cut of a nice suit does not go out of style. The T-shirt and pastel suit however with the white huarache sandals and baggy pants of Miami Vice fame was only fashion, never style.
Our family was ours. While we might learn and observe wonderful parenting tips from others, we learned not to be envious of other families. We learned what it took to parent and love and guide our family as best as we could without longing to be like the perfect family down the street. What we don’t always see is that our neighbor’s children throw tantrums and leave bite marks just like our kids We needed to appreciate what we were responsible for and to do our best within our capabilities and with an eye to the children’s best interests and individual futures.
Children are different. We grew as parents and grasped that what worked for teaching and training one child might not work for another, even a twin sister. Three kids meant many times three different techniques to get the same results. Potty training is a great example. The desired outcome was achieved through a bowl of M&M’s, reading a book, and floating Cheerios targets. The same result on three very different wonderfully crafted children.
These warmly reminiscent discussions led me to thoughts of how they may also apply to our personal finances.
Style. Time and again a diversified portfolio will prove durable and efficient. Markets will come and go and will sometimes move in the same direction, but sometimes not. The latest investment fashion crafted to capture the moment or “the new landscape of investing” tends to not hold up over longer time horizons just like the “Miami Vice” look. The tried and true style of spend less, save more, stay spread out, stick to your plan, and don’t panic or don’t get greedy has stood the test of time. The S&P 500 is not glamorous, it just does get the job done that we ask of it.
Our family / Our portfolio. When someone talks about their stellar double-digit investment returns, congratulate them. Then realize that it is likely not the whole story. No one raises a perfect child and no one gets 10% return year in and year out. Their kid throws tantrums, bites other children, and they will on occasion have bad investment returns even if they will not admit it. Don’t get caught up in the pursuit of matching what others tell you they have. It’s not always the truth.
Treat Investment Types Differently. Having a strong willed child is different than having a compliant rule follower. In the same thought, the way you hold your savings should be different than how investments are allocated. Allocations for retirement monies should be different than that of college savings, as an example. The emergency fund is not to be placed in an emerging market fund. Treat the account or the child in the way that is best for each, individually. We may not like getting .1% return on savings, but the alternative might be losing 30% in a year.
Beth and I felt that our parenting could be boiled down to a bunch of little things done right, with consistency and love. Errors occurred, but they were identified and corrected along the way. The same steadfast patience is required in our financial lives. Beth and I know the silence will pass, just like a market downturn, and will be replaced with family gatherings, holidays together, and the anticipation of kids returning from far-away. Life is transition and the next one is already approaching.
Tim Eichhorn is a Senior Financial Advisor with Rather & Kittrell. He can be reached at firstname.lastname@example.org