It’s The Thought That Counts! (NOT)

May 2nd, 2008 at 02:46pm Tom Muldowney

  Thomas A. Muldowney, MSFS, ChFC, CLU, CFP®, CRC, CMP®, AIF® 

Well-meaning, but financially strapped folks, usually have the best of intentions.  I have no challenge to those of us who periodically go through periods of financial drought.  So, from time to time a hand- made birthday card of tissue and paper clips may be entirely appropriate, and is truly appreciated.  But, for lots of us, as we grow older and gain more responsibilities, our standard of living goes up too. This means that, in general, we make more money as we grow older.  As our standard of living goes up, it is fair that the comment “it’s the thought that counts” should probably go away. 

Suppose you bought a car that didn’t work as promised.  Would you be content if the sales consultant simply said, sorry, but at least I meant well, after all, “it’s the thought that counts.”    Suppose that the brand new house that you just built had drafty windows, poor heating, a leaky roof, and bad plumbing.  Would you be content if your builder said “I meant well, after all it’s the thought that counts.”   

How about this…suppose you made it to your 50^th wedding anniversary.  Would your wife be thrilled with an anniversary “toaster” as long as you just said “Honey, it’s the thought that counts.”  (If you survive, there is good news…you won’t have to worry about a 51^st anniversary present!) 

How far can this go?  Well imagine your own response if your investments did not grow as planned.  Your retirement might be delayed.  You would receive less in retirement income every year for the rest of your life.  It could be worse.  It could be both.  If you have less in retirement cash flow, you could, at least, justify it by saying “I intended to do better.”  You can say the same thing for every vacation that you don’t get to take, or every trip with the grandchildren that you give up.    After all, you can say to yourself, “I meant to save expenses and it is the thought that counts.” 

Some folks manage their own investments (or in their own words, they ‘play the stock market’).  After all, there is a whole series of no-load investment funds out there and it is easy, just sign your name and send in the money.    These folks usually only tell us about their winners. This allows them to sweep the losers into the dust bin of “experience” and avoid keeping score.   They never know if they gave up investment returns or paid unusual costs.  In fact, most people don’t know the real costs.  They may know that a trade only costs them $7 on the newest internet trading platform.  They are usually unaware of the costs of bad timing or wrong stock picks or poor returns.  Actually there is a whole dictionary of costs that most investors overlook.   So, by itself, the $7 buck trade looks pretty cheap.  But the costs of doing it yourself may be borne by you for the duration of your retirement.  

There are some things that most of us want done well.  A car that works as promised is a good enough treat.  A piece of fancy jewelry would probably work a lot better as a gift for your 50^th wedding anniversary.  Come to think of it, I really like plumbing that works, too!   

Consider this for your investments, too.  Making sure that they actually work as promised is a lot better than hearing your investment broker say “Sorry.  You could have done better, but it’s the thought that counts.” 

Good luck and may all your financial endeavors be successful. 

Entry Filed under: Financial Planning, Investments