I recently listened to a podcast, Humans 2.0 with Mark Metry, in which Metry interviewed Gretchen Rubin. Rubin is an author, blogger, and speaker who has written several books including “The Happiness Project”, “Better Than Before”, and “The Four Tendencies”, which analyzes, in a nutshell, why we do what we do, for better and, oftentimes, for worse, and how to change our mindset for a happier and more fulfilling life. I haven’t read Rubin’s books, so this article is not a review of Rubin’s books, nor a review of the podcast. What caught my attention is Rubin’s concept of “Drift”, and how this concept relates to our career choices, how we manage our finances, and how we structure our lives in general.
I see “Drifting” as making essentially passive choices, or, even worse, choosing not to choose, that put us on paths for our careers and finances. In general, people who are successful don’t Drift. They make intentional plans toward achieving their goals, whether they be fame, a successful career, wealth, or a combination of these three things.
Most people “Drift” by choosing the “safe” route, such as choosing a job that gives them the income they need to survive, rather than choosing a vocation that is fulfilling, or that moves them toward a greater financial ambition than “getting by ” and trying to save for retirement. In the area of personal finances and investing, most people do what everyone else does, because that is what we are told is the “best way”: investing in stocks or mutual funds “for the long term”, buying life insurance, buying a home, etc., because these things are the “safe” thing to do. Any of these are not bad in and of themselves, but most people don’t question whether they are the best or only option to consider. Making matters worse, most people place their decision-making in the hands of “professionals”, while most of these “professionals” are motivated by one thing – to make a sale.
The financial services mass media continually reinforces a “Drift” mindset by promoting stocks and bonds as the “safe” way to invest, promoting mutual funds because they offer “diversification”, and promoting homeownership as a smart “investment”. All along, the media blares out “Markets Up!”, “Markets Tumble!”, “Interest Rates Rising!”, “Interest Rates Fall!”, “Hot Real Estate Market!”, “Home Sales Slow!”, and on and on. Whatever the state of the market, the daily drumbeat of good and bad is driven by the need to grab our attention. If you wonder why the financial media wants our attention, just consider the advertisements and commercials by many of their sponsors: banks, mutual fund companies, and brokerage houses.
For many people, Drifting is fine. They get along day to day, week to week, month to month, year to year. “Someday, I’ll retire with my 401(k) and Social Security, then I’ll live the good life.” Meanwhile, they leave their tough decisions, the ones that require taking responsibility and take time to understand, to the “professionals”, believing that, over time, everything will be all right. Everything is great until a stock market crash or a recession hits, that safe job has been cut, and the 401(k) has lost one third, half, or more of its value. Or until a personal crisis hits, like a major injury or illness to oneself or a family member or close friend, and the job, and income, is disrupted. In crisis circumstances, even if the job is secure, they say “I wish I had more money in savings.”
Oftentimes, many of us tune out the noise and find other things to put our minds on – political news, Facebook, sports, Netflix. Here’s an idea: How about putting some time into thinking about our financial decisions, question conventional wisdom, and analyze and learn about our financial plan and investment choices? The resources to do so are out there like never before, and much of it is free, including podcasts, videos, and blogs. It’s just a matter of diverting our attention to things that are important to our future. Like learning how to navigate, setting out a course for our destination, then taking the rudder and steering, rather than Drifting. We may not know exactly where we are heading, at first, but taking control and steering is better than Drifting toward the waterfall, or, maybe even worse, nowhere.
Have a GREAT Day!