Written by Tom Stanley, Investment Adviser, 22nd December 2022
Last month’s note “little rules that resonate” seemed to strike a chord. I had multiple readers reply with the statements that hit home for them also – One ‘rule’ that seemed to land well was…
“If your expectations grow faster than your income, you’ll never be happy with your money no matter how much you accumulate.”
This rule hits on several ideas I have expressed over the past years’ notes, such as ‘having a plan’ or ‘managing our expectations’, but it also hints at the idea of ‘enough’, ‘happiness’, and being ‘grateful’ – all concepts worth keeping in mind especially into the festive season.
2022 may not feel like a year we should be grateful for as investors. Nothing expresses the pain that has been felt better than the below chart.
With both ‘growth’ and ‘defensive’ asset classes taking a hit, there has been very few places to hide any investor. While the above chart is US focused, Morningstar’s latest KiwiSaver Report covering performance through Q3 2022, highlights that Kiwis have done it tough also – The average ‘Aggressive’ KiwiSaver Fund has returned -14.0% and the average ‘Conservative’ KiwiSaver Fund has returned -8.1% in the past year. Not good numbers, but we have been relatively better off than our US counterparts!
This gruelling year was thrown into context at a recent conference I attended where Abbas Nazari talked to his journey as a child refugee on the ‘Tampa’, growing up in Christchurch, and eventually becoming a Fulbright scholar. As Abbas spoke, he highlighted the plight and struggles of refugees everywhere. Abbas’s story centres around his family’s desperate search for safety, but he was quick to point out that his story was not unique – he drew the audience’s attention to the horror being experienced by those in the Ukraine and appealed to us to take a step back and appreciate what we have in New Zealand. After his presentation, Abbas set up in the foyer and was selling copies of his recently published book ‘After the Tampa’ – I needed to hear more and purchased a copy – Abbas offered to sign the book, his sign off was simple “With Gratitude, A. Nazari ‘22”.
I highly recommend Abbas’ book, it is heart-warming, page turning, personal account that challenges and offers many thought provoking questions. Later in the book Abbas speaks to his gratitude for New Zealand and all that his parents actions made possible for him and his siblings. Abbas also shares a paragraph from his Fulbright Scholar Application Letter:
“My philosophy in life is simple. That things aren’t as bad as one imagines them to be, and that a little perspective goes a long way. I think going through any formative experience imbues the adventurer with a broader perspective on life. They say that you are the sum of all your experiences. I believe this is true for me. I am always grateful to wake up in a country where we are given the opportunity to pursue our full potential. I remember my primary school principal saying ‘most people avoid opportunity because it is dressed in overalls and looks like work’. I think this saying accurately captures my perspective on life”
This passage really landed with me and offered a much-needed dose of perspective – here was a person who had negotiated more harrowing experiences than many of us could ever comprehend, yet he is expressing positivity and gratitude – If Abbas can look through his experiences in a positive light, we can all find a silver lining somewhere.
I appreciate I have deviated a little from the ‘rule’ I started with, but some zigging and zagging is always required when negotiating the very soft edges of what makes us human. To bring things full circle, I want to leave you with a few open-ended questions to consider over the holiday season:
What are your expectations, and how have they changed over the past 1, 3 or 5 years?
Why do we devote so much of our time, energy, and attention to having more?
Does more always mean better? (I’m sure there’s another note on marginal utility there).
Wouldn’t we maybe be better off if, instead, we focused on having enough?
To close out this month’s note, the Amicus team and I want to wish you a very merry Christmas and I hope that you all have a break where you can share your ‘gratitude’ and have ‘enough’ (Christmas pudding at least!).
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