I have a friend who is, shall we say, “crunchy” (in the best sense of the word). She and her family eschew many modern conveniences such as dishwashers, fast food, and big box stores in favor of doing things the old fashioned way. They are environmentally conscious to a fault and very outdoorsy. A few decades ago I guess they would have been borderline hippies. I don’t say this to be derogatory, only to explain. I actually admire their lifestyle for its simplicity and the closeness it generates within their family and I respect many of the choices they’ve made.
This past week I discovered another benefit to their simple life: Ignorance. I don’t mean that these people are stupid. Far from it. They are very well educated and can converse with you on just about any topic, and in three languages. However, in their quest for a simpler life they forego television, the Internet (except for email), and most commercial magazines. They do read a large number of books and academic journals and they get their news from newspapers (but only two per week). They are not oblivious to what is going on the world, they simply choose to get their information in very controlled doses.
The other day she was in her yard gardening while I was out running and I stopped to chat. After a while, the conversation turned to current events and the upcoming election. Being the finance nerd that I am, I asked her if she was concerned about the economy (this was the day that the bailout plan got rejected and the Dow went down almost eight hundred points).
“Not really,” was her response as she plucked another weed.
This stumped me. How could this woman not be worried? How could she not fear the loss of her investments or her kids’ college funds? How could the cost of gas and inflation not worry her?
“Why not?” I finally asked her.
“Because I don’t have anything to worry about,” she said. “My husband and I both have good jobs, we don’t have any debt, we’ve saved a lot for a rainy day, and our investments are diversified enough that the pain is limited.”
“Don’t you worry about the future?” I asked.
“No. I only worry when I have something to worry about. Right now, in this place, there’s nothing for me to worry about. If things change, then I’ll worry. But for now, we’re fine.”
I wondered to myself if this kind of peace could be bottled and sold. I asked her how she managed to be so at peace with the economy when the rest of the world seems to be coming apart at the seams.
“I don’t pay attention to the hype,” she answered simply. “Most of it has nothing to do with my day to day life and I can’t change it anyway. Can I do anything about the fact that companies and individuals chose to act irresponsibly? Nope. Can I stop the bailout plan? No. Can I stop them from raising my taxes in the future to pay for it? No. Yes, these things will affect me or my kids one day, but for right now my daily life is unchanged. I don’t spend hours watching the newscasters gnash their teeth over this stuff. I don’t read every editorial or analysis. If I did I’d probably go bonkers.
“That’s mostly why we got rid of TV,” she added. “When we had it, I was always watching and it was making me sick. I was worrying all the time, thinking the world was going to come crashing down or I was going to die of some dread disease. Without it, I don’t obsess like that anymore. I get the information I need from less biased, hype-based, sources and leave it at that.”
“True enough,” I said. “I watch this stuff because it’s like a train wreck to me. I can’t turn away, even though I know I should because it’s going to get bloody.”
“And I’ll bet you’re worried about it all, aren’t you?” she asked.
“Well, sure,” I said. “I mean, I worry about how my retirement might be affected. I worry about inflation and the price of goods. I worry about my standard of living.”
“Can you change any of it?” my friend asked.
“Then leave it be. Worry about the things you can control. Like saving more money. Living further below your means. Doing a good job at work so you’re valued there. Don’t worry about what may or may not come. Tune out the talking heads. Chances are, they don’t know anything more than you do. They’re just speculating and it’s in their interest to speculate toward the negative side of things. That’s how they get ratings. How many times have you watched the news hype something up and then it turns out to be less than what they made it out to be?”
“Too many times to count,” I said.
“There you go. Just ignore it. Read just enough to stay informed of what’s going on generally and let the rest of it go. The minute by minute reports only make you crazy.”
Her words made sense and reminded me of something I already knew, but had forgotten since the “crisis” started. I weaned myself off of most TV some time ago, but I have to confess that I have found myself watching more lately since this “crisis” has worsened. The finance nerd part of me can’t look away. I’ve also been reading more posts on the Internet and generally falling for the frenzy. I’ve regressed into my former information junkie self and I needed a good slap to get me back on track.
I had the chance this week to put my friend’s advice into action and detox myself. We took a trip to a spot that is pretty far removed from the real world. The news doesn’t really reach there and TV reception is limited at best. The only Internet access available is a very painful dial-up connection. For the first couple of days I was going a bit nuts, not being able to get my daily dose of hearings on Capitol Hill and arguments amongst analysts. But then as the days went by, I felt myself relaxing.
My friend was right. Nothing that was going on in the financial world was affecting my daily life in that moment. Sure, my long term investments are going down hill but with thirty years to retirement it’s not a huge concern. I’m optimistic that I’ll get it all back. Certainly I’ll have a higher tax burden in the future, but I can’t change it so there’s no need to worry about it until it happens. All of my money is still in the bank and all FDIC insured. Even if my bank fails, I am okay. My house is still mine and the mortgage isn’t going to change because I have a fixed mortgage. I don’t need any credit for the foreseeable future, so the unavailability of credit isn’t a concern. All of my belongings are still mine. In other words, everything in my daily life is exactly as it was the day before and the day before that. Things might change, or they might not. But there was no reason, in that moment on my trip, to freak out over “might.” Needles to say, I enjoyed the rest of my trip immensely. My brain was freed up to think about the things that mattered like time with my family.
Since we’ve returned home I’ve only turned on CNBC once. I quickly realized that my “detox” program had worked because I suddenly found all the shouting and angst appalling instead of appealing. I told the talking heads to shut up, turned off the TV, and went about my day in peace.
None of this is to say that you shouldn’t be concerned at all, particularly if you have a lot of adjustable rate debt, are a business owner, have a job that is insecure, or you’re close to or in retirement. But even if you have something to worry about, there is a benefit to tuning out and turning off a lot of the hype and opting to better control the amount and quality of information you receive. You can still be an informed citizen and make responsible financial decisions without being exposed to every little hiccup and frenzy. Freeing yourself of the paralyzing fear generated by the hype means you can take proactive steps to deal with the “crisis,” such as generating more income or creating more savings, if that’s what you need to do. You’ll not only be informed, but probably a little saner, as well. Ignorance is, at times, truly bliss.
Image courtesy of parl