The Financial Philosopher

Real Reason the Economy is #1 Presidential Issue

"How you are seen by others becomes the mirror that tells you what you are like and who you are.  You need others to give you a sense of self, and if you live in a culture that to a large extent equates self-worth with how much and what you have, if you cannot look through this collective delusion, you will be condemned to chasing after things for the rest of your life in the vain hope of finding your worth and completion of your sense of self there." ~ Eckhart Tolle

Republican or Democrat, Conservative or Liberal, you will agree on at least a few things:  The number one 2012 US Presidential Election campaign issue is the economy; and the underlying ideological thread tying it all together is the degree of government's role in our lives. 

Take a deeper look and you will find the real reason the economy is the number one presidential campaign issue--the desire for more.

Republicans believe less government is the route to a stronger economy and Democrats believe more government is the route to a stronger economy.  Either way, the common goal is to enable or create a stronger economy!  And the voting citizens agree.  But what's wrong with greater financial wealth? 

"Money often costs too much." ~ Ralph Waldo Emerson

Money is not the root of evil but it is the most common means of losing oneself.  When identity is found in money, and in things purchased with money, the ego seeks and finds the means to perpetuate and strengthen this false identity; the authentic self gets covered.

Ironically, the desire for more--the insatiable hunger for greater monetary, material and social wealth driven by the stronger economy mantra--was at the very core of the cause of the Great Recession that politicians love to blame on each other; the desire for more inevivitably ends with less; the cycle of greed never ends--it just manifests itself into something different every time.

Placing irony on top of irony, voters in 2012 will once again perpetuate the lie that a stronger economy translates into a greater existence by telling politicians to fix our economy for the purpose of elevating our misguided sense of self-worth: More money will solve all of our problems.

"If thou wilt make a man happy, add not unto his riches but take away from his desires." ~ Epicurus

The so-called poor never have enough but neither do the so-called rich.  The collective ego of a materialistic socieity is never satisfied and the biggest egos in the world--politicians--know how to speak directly to this.  Politicians will never tell voters to wake up from their financial-driven delusion because that would undermine their own reason for existing--to gain more power while perpetuating the illusion that the role of government is to spread wealth--to help us all make more money, to buy more things until we get tired of those things, then buy more things to replace the old things, and so on. 

"Wealth and rank are what people desire, but unless they are obtained in the right way they may not be possessed." ~ Confucius

In consumer-based societies, which makes up the majority of the civilized world, the individual identity of each citizen is found almost entirely in (or accomplished by) money, material wealth and social status.  The collective society must be made strong to enhance the financial well-being of all of the individuals within that society, otherwise the society and all the citizens within it presumably fail:

• Younger generations must have more financial advantages than older generations;
• People with less must be given the opportunity to have more;
• The wealthiest must have increasingly greater capacity to grow more wealth;
• Those who are the wealthiest are admired, yet detested;
• If the financial wealth of the nation is decreased, the sentiment of the nation is negative; and
• Corporations must have either more cooperation from government or less interference from government, whichever makes them more profitable.

Politicians invented the question, "Are you better off today than you were four years ago?"  If you answer yes, vote for the incumbent; if the answer is no, vote for the challenger.   It's the economy, stupid!   But who or whom is the "stupid" one? Think about that.

More is not always better but social conventions teach it.   The total well-being of an individual, and of a nation, is only partially dependent upon financial wealth.  The majority of one's true wealth is self-created. 

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Correcting the Correction

"Worry gives a small thing a big shadow." ~ Swedish proverb

The stock market has fallen more than 10% from its recent highs. By definition, this is considered a market correction.

As an investor and, more importantly, as a human being, the healthy perspective is to keep one's own negative sentiment in check--to separate oneself from the crowd--to focus more on the personal economy and less on the world economy--to remember that total well-being does not need to be completely dependent upon financial well-being.

You may need to correct the correction, if you will, in your mind.

From the financial perspective, it is important to reflect upon your own objectives for investments before forming any conclusions about market directions and especially before making hasty market timing moves.  For example, if your investment time horizon is 10 years, you should expect to see a 5 to 20% decline in stock prices several times over the course of that time horizon.

"A straight oar looks bent in the water. What matters is not merely that we see things but how we see them." ~ Michel de Montaigne

Market corrections may be considered a healthy aspect of a larger bull market trend; ebs and flows are natural in the course of economic and market cycles.  However, it is unlikely the investor herd will take this market over the cliff into a full-blown bear market trend, at least not quite yet. 

According the Wall Street Journal, the most recent Price/Earnings Ratio of the S&P 500 is 14.98, with forward estimates at 12.55.  In translation, stocks may be considered "fairly priced."  Of course, prices can always go lower but bear markets most often begin at higher, over-priced levels.

 "Worry is a thin stream of fear trickling through the mind. If encouraged, it cuts a channel into which all other thoughts are drained." ~ Arthur Somers Roche

Above all, the negative sentiment arising from distressed world economies and capital market declines need not be an eroding factor of your total well-being.  Money that is invested in securities, such as stocks, bonds and mutual funds, does not represent money needed for your livelihood in the present; it represents future financial security; it does not exist to support the basic physiological needs of food, shelter and clothing; and once those needs are met, there is no good reason for temporary financial setbacks to erode at other areas of well-being, such as emotional and spiritual.

In summary, worry over your finances can paradoxically harm your finances but it can also harm all other areas of your life.  When we experience financial market corrections, for the sake of your total well-being, it is important to go on living your life and to allow nature to take its course.  To end appropriately with Johann Wolfgang von Goethe: "Life is about life and not the result of life."

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Are You Part of the 0%?

"The wise man knows that it is better to sit on the banks of a remote mountain stream than to be emperor of the whole world." ~ Zhuangzi

I never really placed much energy or thought into the "99% vs 1%" debate.  I think my lack of interest may be because I do not sympathize with or support either side--from what little I know, it seems neither side represents me.

If the 99% and 1% make one entity, what would it be?  If it's "Main Street" vs "Wall Street," what about those of us who reside or work at neither figurative address?

I don't think the 100% whole, if you will, represents 100% of the people.  Instead I believe both sides combine to form one group that shares one common, self-defeating human flaw--they care too much about money, material wealth and social status. 

The 99% are discontented and the 1% are greedy.  From my perspective, there is no real distinction between discontent and greed--both share the same path and destination; they are each causation and correlation of the other.

If thou wilt make a man happy, add not unto his riches but take away from his desires." ~ Epicurus

Are you part of "The 0%"?  Here are some of the principles and philosophies that may confirm you are a Zero Percenter:

• To the 0%, the definition of wealth has little or nothing to do with money or materiality.  To be financially rich is to have anything more than "enough."
• Life is not a zero sum game; there can be more than one winner.  If someone earns more in one minute than you earn in a lifetime, so what?
• You won't identify yourself as part of "The 0%" because you don't care to be part of any defined organization.  By virtue of not being 99% or 1%, you are 0%; there is no reason to announce to the world your alignment with any defined group.
• You have no complaints against any particular party or entitity because you believe that "everything is exactly as it should be" and therefore the attempt to change others is no different than attempting to fight against nature--it is foolish and self-defeating. 
• There will never be any protests or public display of anger by The 0% because it goes against their contented nature.  Making matters worse, protesting will only attract pretentious people looking to find some reason to protest!
• You prefer to be nobody because trying to be somebody is an act of ego.
• You know little of the 99% or the 1% because you--The 0%--are too busy enjoying life to read, watch or listen to the noise of mainstream media or annoying people around you trying to align with either side.

Perhaps I should start an organization called "The 0%:" 

I could create a fancy logo and slogan; the 99% will join the organization, buy my merchandise, read my messages on my blog, website, Facebook page and Twitter account and thus propel the entity to become large enough that the 1% will sell it to the world with an Initial Public Offering; the 99% will buy more merchandise and shares of stock, the 1% will gain more financial wealth; the 99% will complain about the fortunes of the 1% (but continue to consume the 1% group's newly developed version of The 0% product); and the world will find which side to share sympathy so they may publicly communicate their ego-driven ideals and dogma through other products (i.e. Facebook, iPhone, etc) that are all owned by the 1%.

Naahhhh....

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