02 Sep 2016 A choice between Aston Martin and Bob.
Did you know that you can buy a stroller (for a baby) made by Aston Martin? Did you know that it would cost you $4,000? I present this, for now, without comment. We’ll come back to it momentarily.
Sometimes, when I tell people about the sort of work we do at Beacon, I get the sense that some view our primary mission and value as simply the building of wealth. And of course, that’s part of what we do, and an important one at that. No one exactly hires us to make a nice La-Z-Boy shape out of their pile of money and just sit on it for 30 years. After all, the bank will pay them a couple pennies a year to do that. But the concept and reality of inflation would make that course of action pretty detrimental to most folks, so we build wealth for clients the best we know how, harnessing the power of the capital markets as efficiently as possible, and as effectively as human behavior allows.
That last bit–human behavior–makes things really tricky. Even the term itself is a bit of a misnomer, given that misbehaving is part of the human condition. For example, watching our hard-earned and carefully-saved money fluctuate wildly with the stock market in either direction can do strange things to our emotions (and even our bodies!), and those strange emotions sometimes make us want to commit strange actions with our money, most of which turn out to be quite destructive. And so another important part of what we do is helping people preserve their wealth, by acting as a buffer to those crazy and natural emotions that are hard-wired into our being.
But what about when markets aren’t fluctuating wildly? What are we doing then?
I said earlier that you could by a $4,000 stroller made by Aston Martin. It’s true; I didn’t make it up. I’ve even included a picture of it. As you can see, it’s really nice. Even though babies in strollers can’t really see well for several of the first months of their lives, I’m sure that they would appreciate the craftsmanship of the stroller and the comfort it provides them as they habitually spit up. But there is another company that makes strollers, called Bob, and while that name is admittedly a marketing failure next to the likes of Aston Martin (doesn’t Bob even have a last name?), Bob does make pretty good strollers. You could get one for about one tenth of $4,000.
So, if you were in the process of shopping for strollers, and you had the Aston Martin and the Bob side by side, what is the question that you would have banging around in your brain? It’s a common and important one: What should we do?
What an interesting question.
- We have some extra money that we would like to save, but we don’t know whether to save it in the 401k or our taxable account. What should we do?
- We would like to provide some support to our kids if they choose to go to college, but we aren’t sure if we should try to pay for all of it. What should we do?
- We would like to pay off our mortgage as quickly as possible, but we don’t know if that makes sense with interest rates this low. What should we do?
- We would like to travel more often to Banff in these earlier years of retirement, but we aren’t sure if we can afford it. What should we do?
The really fascinating thing about this question is that there is hardly ever “the right” answer. But there is almost always the best answer–for you and your family and all the variables that make you unique. And that’s what we’re here for, to help determine what that answer is.
So next time you find yourself asking “What should we do?” know that we would love to sit down and hear about the choice in front of you. Get in touch with us!