COVID-19 ‘wake-up’ call: Unexpected advice for happiness from a wealth counselor

March 23, 2020

This crisis will pass, but so will the gift of it to waking-up to live the rest of your lives in gratitude and appreciation for each breath you take.

This crisis will pass, but so will the gift of it to waking-up to live the rest of your lives in gratitude and appreciation for each breath you take.

Unexpectedly-suddenly-there may come like a thief in the night, a seemingly, overwhelming and insurmountable crisis that threatens our very existence.

However, if examined carefully, this crisis can actually be a doorway to peace. At the time of writing this article-and I highly doubt things have changed before publication-our world as we have known it has been turned upside down, and what security we thought we once had, we are suddenly aware was only an illusion.

In a matter of weeks, our financial security, our businesses, our way of life, our world as we knew it, and even our very lives have become threatened.

My profession over the past several decades, blessedly, has been to council ophthalmologists around the country in planning for a successful financial life, and a carefree retirement.

My partners and I continue to work with doctors in all phases of their lives, from accumulating assets to withdrawing assets in retirement. Our job was always to plan carefully and prudently to achieve their goals with minimum risk. But, and perhaps because of the very nature of our business, we noticed that there was never a correlation between how much money a person had and how happy they were. This mystery compelled me to search out why this occurred.

So, this article is about our current crisis and happiness, or freedom from the terror of one’s own punishing thoughts.

I have seen it all, or at least I thought I had. But this current financial/health outlier-black swan event is one in which no one can give early predictions as to the impact on our world or domestic economies, or the very survival of our healthcare system. Our family’s and our very own mortality are actually called into question. From nowhere we are now faced with unprecedented challenges. And in many cases overwhelming fear of the unknown.

First, on the financial side, if you are in the accumulation phase of your career, nothing has changed. Unless this is the end of our financial systems as we have always known them, and that is highly unlikely, the companies you have invested in and loved are now at fire-sale prices, provided you are going to hold them long-term. Just keep saving and investing as you have been.

Uncertainty is the last thing Wall Street wants to see. Uncertainty is the last thing any of us wants to see, especially when it comes to our health or financial security. We have, as a team at Grande Financial Services, witnessed more than three decades of ups and downs in the market, and just about every geo-political event imaginable.

This most recent downturn, as severe as it has been, is something that we have not seen before. It is disconcerting, to say the least, to watch your investment holdings lose up to 30% of their value in one week.

However, and yes there is a however, even though we have not seen exactly this particular rapid spiral into a bear market, and a possible recession, we know how it has turned out in the past, which has always been to come back and advance further. This should be no different as the banks are strong and the government is giving its full accommodation to both the virus and the financial markets.

I have witnessed firsthand over the years that fear is the most dangerous emotion when it comes to investing. The feeling of watching your portfolio grow each year is pleasant and rewarding, but does not match the intensity and pain of watching your investments lose value. Presuming that you had a good financial plan laid out, and your exposure to stocks was not more than the absolute minimum risk you had to assume to achieve your financial goals, just stay the course.

You must remember that your stock portfolio represents a long-term strategy, and that you are not to panic and sell out because of fear. Selling out after a large decline in the markets is turning a paper loss into a real loss.

Then comes the problem of getting back before the markets turn upward, possibly as fast as they went down. This is the age of computer trading and things happen very fast, as we have just experienced. This particular downturn may well be the fastest and most severe to date. It gave few investors a chance to trim down their holdings as the markets were down considerably in just one week’s time.

For those ready to retire or in retirement now, it may be a good time to divide your expenses between essential and discretionary. Essentials must be paid, e.g. food, mortgages, property taxes, insurances, gas and electric, cars, etc. The discretionary side would be anything not essential, such as eating out, gifts, travel, etc. When you calculate what the essential and discretionary costs are, you can divide each number by your investment net-worth, find what the percentage is, and stick to a budget that does not exceed this percentage.

As your portfolio goes down or up and, if the percentage is higher than planned, you may want to cut back on your discretionary spending until the portfolio has recovered again. This will preserve principal and the danger of creating a vicious cycle of depleting your savings when your withdrawal percentage keeps increasing as the portfolio goes down. There are many more strategies to be considered, which will be covered in future articles.

Some examples would be tax-harvesting losses by switching positions on the same day. Thereby, not missing a market upturn if one would occur, but locking in future loss carry-forwards. Also, repositioning portfolios that previously had too much gain to consider a move because of capital gains. There are actually many positive moves one could consider while we are experiencing these depressed markets. Of course, it is imperative that you consult with a tax professional before making these changes.

There is not enough space in this article to fully address the opportunity that presents itself for all of us, but I will give it a try. This shock to our daily lives, in my opinion, is a wake-up call.

It is a time to re-evaluate the reality of the mechanical lives most of us have been guilty of living. We plan and do and do so much every day that most of us miss being in the sacred moments of being alive. Please excuse me for philosophizing, but the moment seems to call for it. I have watched it my whole career.

Professionals on a treadmill, always looking into the future for when things will really be good, trying to turn ”what is” into “what should be”-thereby missing what joy is right in front of them. It is time to come down from our cluttered minds into our hearts and remember the innocence of our childhood. We are more than our money, our professional achievements, our pride. If we look deeper, and this terrible crisis is a perfect opportunity to do so, you will find a peace within you.

Instead of trying to control the future, which we now see we cannot, we can become more grounded in the preciousness of each moment. Just take a look at the fragility of life and what we thought was our security. What have we been missing in an attempt to achieve this illusion?

I am not saying not to plan. I am saying to be fully alive while planning. Remember the love we are as human beings. Remember the kindness and compassion that we innately are. There is no such thing as security no matter how much planning we do. There is only now. I urge you, my friends of many decades, to embrace this opportunity to re-evaluate your priorities.

Yes, I said, "opportunity." Don’t miss it! This crisis will pass, but so will the gift of it to waking-up to live the rest of your lives in gratitude and appreciation for each breath you take.

Perhaps this sounds like strange advice from a wealth counselor, but I have always loved my profession and my clients and only want them to be whole in life. Integrating their knowledge, intelligence and success without needless suffering. I believe this is a wake-up call. May everyone stay safe.

Disclosures:

John J., John S., and Traudy F. Grande, CFPs, are co-editors of the "Money Matters" column in Ophthalmology Times. They are owners and principals of Grande Financial Services Inc., Oakhurst, NJ (www.grandefs.com). The Grandes advise doctors across the country on a diverse range of investment and financial matters. Readers may submit their financial questions to them at john.s.grande@grandefs.com or call 800/722-1258.

The views depicted in this material are for information purposes only and should not be considered specific advice or recommendations for any individual. All investing involves risk, including the potential for loss. Past performance is not indicative of future results. No investment strategy can ensure a profit or protect against loss in a declining market.

John J. Grande, John S. Grande, and Traudy Grande are Registered Representatives offering securities through Cetera Advisor Networks LLC, Member FINRA/SIPC. Advisory services offered through Summit Financial Group, Inc., a registered investment adviser. Summit and Cetera are related and are under separate ownership from any other named entity. Registered Branch: 257 Monmouth Rd, Oakhurst, NJ 07755. Phone: 800/722-1258. Website: www.grandefs.com.