Hello OCWCer!
I have constantly been reminded of the word “perspective” this year. It calms me when I get irritated, and points me in the right direction when I feel turned around. The saying “walk a mile in someone else’s shoes” stems from this very idea. That if we change the lens by which we view the world, we might have a different opinion, maybe even one that we disagree from our own shoes.
Enjoy this month’s OC Wealth Coach reading!
We have some awesome friends that moved to Southern California from the mid-west several years ago. (They have okayed to share this, haha).
They bought a house that is 18.4 miles from the nearest wave and is a 30 minute drive (to surf at 6am of course). One day, I saw a sign on their doorstep that said “Beach House”. As a native Southern Californian, I jokingly commented on their sign. After all, I went to high school just down the street from them and almost never went to the beach. It’s called Anaheim Hills, not Anaheim Beach!
But from their perspective, they moved 1,609 miles of the 1,627 miles to Balboa Beach from their last home. A 12 hour drive (to a different ocean) was cut down to 30 minutes. Now, they can surf for a few hours in the morning and still make brunch with some friends. To them, it sure is a beach house.
So who’s correct?
Well, it’s all in how you think about it and who you are talking to. If I made a party invite to my “Beach House” and include my Orange house address, my local friends would ask me if I bought another house and put the wrong address down. But if our mid-west friends made that same invite and sent it to their friends and family 1,600 miles away, no one would need clarification. They’d just need a plane ticket.
The lens I was looking through was only around 20 miles large. If I zoom out to 2000 miles, I have a different opinion. Their perspective is healthier than mine. Orange County-ers would save a lot of money (and time parking) if they considered a house 20 miles from the beach a “beach house”.
Our perspective can cost us.
- Some people are terrified of aging while others embrace it.
- Some people drive a 15 year old clunker down the street next to luxury cars they could easily afford but will never buy.
- Some people call a vacation a camping trip to a nearby lake, while others spend thousands of dollars every year for extravagant trips.
Each of those people think the other person is foolish. But it’s not a question of right and wrong, it’s a question of priorities and perspective.
What’s your perspective?
Our perspective around finance can be similarly skewed. We have a tendency to zoom in on the year to date returns because that’s the default view on accounts for some reason. But if we zoom out to even the beginning of 2021, the S&P 500 was slightly positive from that time through the end of June of 2022.
If I zoom out even more to include the next 3, 10, or even 30 years, this 6 past months becomes just a small piece of the ever-evolving puzzle. Considering 40 year high inflation that is eating purchasing power on cash. Interest rates have gone up quickly and hurt low risk investor portfolios. While the stock market has gone down and hurt moderate and aggressive investors.
There is no “perfect” investment. They all have trade offs. If we zoom in too far on some of the benefits, we can miss the downsides. Investments can have volatility, and this year may have more and so may the next, and the next…
The real question is, “Is my perspective correct?” Surprisingly, the answer to that question can give us more confidence in our choices today.
Zooming Out
Opening investment statements with negative numbers is not fun and I encourage you to contact us if you want to chat.
Our investment time horizon has and will span over many years or decades.
Is there a perspective you may be a bit too “zoomed in” on and it’s costing you too much financially or emotionally?
Are the goals you set a year or two ago still valid? Or do they need to be revisited?
Since none of us know what the future holds, it’s important to realize that every time in history was chalked full of uncertainty about the future. The best we can do is line up our financial decisions with our future objectives.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
From the beaches of Orange,
Trent Huston, ChFC
Wealth Coach
California Insurance License #0G24740
17742 Irvine Blvd #200 | Tustin | CA | 92780
p | 714.832.6763
Trent Huston is a Financial Consultant with securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through AK Financial Group, a registered investment advisor. AK Financial Group and OC Wealth Coach are separate entities from LPL Financial.
