Exploring the bricks, inversion, and risk

Welcome to the Intentional Dollar weekly newsletter — great work taking this small step to move your money forward. I’m Logan, a Certified Financial Planner™, and I’m excited you’re here!

What’s inside?

• One tool to experiment with

• Two quotes from others

• Three questions to dig deeper

• Four lines of poetry for the point

_{One tool to experiment with:}

The Bricks:

Have you ever been discouraged by your fluctuating dollars?

The dollars in your investment accounts that jump up and down with the whims of the market. These jumps are often masked with the label “volatility” which is a quantitative measure of how much you would expect your investments to move up and down from the average, or norm.

Despite a well-intentioned plan to leave the investments in place, when they (inevitably) start moving in the wrong direction, our will-power might not be enough. Seeing the account balances decrease, seeing the red on market news stations, seeing the panic in the office as people discuss their financial woes can cause us to make suboptimal decisions for our future self — merely to settle the emotions of present us.

This short-term emotional damage control will alleviate the anxiety of more potential loss, but it’s bad for the long-term. We will often wait on the sidelines until things start to look better — which inherently means we have missed out on gain.

So, how might we shift our perspective and focus on something that helps us stay invested through thick and thin?

As Epictetus laid out in Discourses, “Let a person shift their opinions only to what belongs in the field of their own choice, and I guarantee that person will have peace of mind, whatever is happening around them.”

The thing we want to shift our opinions and focus toward is the shares in our investment accounts.

Shares, or bricks as we will name them, don’t (typically) fall. If I own one brick, I own that brick, but the value of it will change over time. Depending on the market for the bricks, the price will change day to day. The goal is to not focus on getting the best daily price for our bricks, but accruing more bricks that will eventually fetch a higher price.

For those that aren’t familiar with my investment portfolio, it’s primarily VOO, or some low-cost derivative in places I can’t purchase it.

VOO is a low-cost S&P 500 ETF. The cumulative value of my shares is the highlight for every single investment account I have, and as long as money is our medium of exchange, it should be. But when we display things that change daily, we subject and expose ourselves to more emotional biases.

The way to combat this is to track your shares (bricks) and focus on stacking them — brick by brick.

Set dividend reinvesting to magnify the quantity of bricks you have. Track these bricks in Excel, or Google Sheets, or on paper, but track them — and focus primarily on them.

By focusing on the bricks, you’re disarming your emotional biases, and latching on to an ever-increasing focal point.

Prices are subject to the jumping, shares are not.

_{Two quotes on inversion:}

Flipping a problem on its head (inversion) is a powerful way to get a new perspective. Instead of searching for ways to make better money decisions — where could you stop making bad money decisions? Don’t focus on winning, focus on not losing.

_{Three questions on risk:}

1. Where am I not taking enough risk with my finances?

2. What risks do I currently own that would be catastrophic financially — death, disability, loss of job?

3. Where am I taking too much financial risk — trying to turn a little into a lot?

Which question stuck with you? Questions like these are spotlights for the mind. Reply to this email and let me know which one shined light on a previously dark cave.

_{Four lines of poetry for the point:}

Contact Me:

Content ideas, questions? Reply to this email or reach out to me at [email protected]