Are You Content?

We are a people in pursuit of more. If it’s bigger, better, or faster, then we must have it. Social media allows us to view the good life of others in real time and this is causing angst for many.

Facebook depression is real. According to phys.org: “If the research is any indication, you may actually be finding Facebook and other social media sites aren’t so great for your mental health. Instead of feeling blissfully open and connected with your friends, you feel inadequate or maybe even a bit depressed.”[1]

In another study, researchers found people became more depressed after spending time on Facebook: “Exposure to the carefully curated images from others’ lives leads to negative self-comparison, and the sheer quantity of social media interaction may detract from more meaningful real-life experiences.”[2]

Trying to keep up with the Joneses can also be financially damaging to your health. A study of lottery winners in Canada found that the neighbors of lottery winners were more likely to go bankrupt. The non-lottery winners tried to keep up financially by spending aggressively, investing in speculative investments, and borrowing more money.[3]

What does the Bible say about being content?   

Yet true godliness with contentment is itself great wealth.  After all, we brought nothing with us when we came into the world, and we can’t take anything with us when we leave it.  So, if we have enough food and clothing, let us be content. But people who long to be rich fall into temptation and are trapped by many foolish and harmful desires that plunge them into ruin and destruction.  For the love of money is the root of all kinds of evil. And some people, craving money, have wandered from the true faith and pierced themselves with many sorrows. ~ 1 Timothy 6:6-10 

Not that I was ever in need, for I have learned how to be content with whatever I have. I know how to live on almost nothing or with everything. I have learned the secret of living in every situation, whether it is with a full stomach or empty, with plenty or little. For I can do everything through Christ[ who gives me strength. Even so, you have done well to share with me in my present difficulty. ~ Philippians 4:11-14 

Don’t love money; be satisfied with what you have. For God has said, “I will never fail you. I will never abandon you.” ~ Hebrews 13:5

Investors struggle with contentment particularly if they feel they’re missing out by not owning the hot stocks. Stocks such as Facebook, Amazon, Netflix and Google (FANG) are soaring to new heights and investors could become depressed if they don’t own these highfliers. In a situation such as this, they’ll sell assets to chase winners and move to a more concentrated portfolio.

Concentrating on a few hot stocks is not new.  Microsoft, Intel, and Cisco were Wall Street darlings during the technology boom of the ‘90s. From 1995 to 1999 these three stocks generated an average annual return of 80%. A $75,000 investment in 1995 grew to $1.3 million by the end of 1999.

How have they performed since? From January 2000 through June 2018 they’ve averaged 3.2% per year, dramatically underperforming the S&P 500. Investors who felt as if they were missing out jumped in at the top only to see their account values fall by 83% during the Tech Wreck.

The fear of missing out is not limited to stocks. Last year, Bitcoin soared 148% from November to December. This explosive burst started a feeding frenzy as investors rushed to buy more Bitcoin. It has since fallen 65%. It will have to return 192% to get back to its all-time high!

How can you be content with your investment portfolio?  Here are a few suggestions.

Plan. Creating a financial plan will give you a picture of your situation allowing you to focus on your goals, not your neighbors. The plan will be your road map to help you achieve your financial goals on your terms.

Budget.  Your budget will help you live within your means. If you make $2 and spend $1, you’ll feel rich because you can invest and spend money without fear of going bankrupt by trying to keep up with the Joneses.

Diversify. A portfolio of low-cost mutual funds will give you broad exposure to thousands of companies including the highfliers. In addition, you’ll own companies of various sizes sprinkled around the globe.

Serve. Go serve those in need. Unfortunately, there is an abundance of people who need your help. Volunteering in your community can pay huge dividends to both you and the people you’re serving. In fact, volunteering can be beneficial to your health.[4]

Give. Giving is another way to help those in need. If you’ve been blessed with financial resources, can you distribute a percentage to groups and organizations your support?

List. Make a list of the good things happening in your life, I’ll bet it’s more impressive than you think!

Being content takes practice and patience. It’s hard work to live within your means and socially unacceptable to many. However, knowing that you’re stewarding your resources well should bring you peace, joy, and contentment!

My crown is called content, a crown that seldom kings enjoy. ~ William Shakespeare 

July 5, 2018

Bill Parrott is the President and CEO of Parrott Wealth Management firm located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.

[1] The secret history of Facebook depression, January 22, 2018, Dr. Kate Raynes-Goldie

[2] https://www.cnbc.com/2017/04/12/study-using-facebook-makes-you-feel-depressed.html, by Todd Haselton, 4/12/2017.

[3] https://www.bloomberg.com/news/articles/2018-05-29/keeping-up-with-the-joneses-neighbors-of-lottery-winners-are-more-likely-to-go-bankrupt, May 29, 2018, Peter Coy

[4] https://nypost.com/2018/04/24/volunteering-is-great-for-your-health/, 4/24/2018, Jeanette Settembre, Moneyish

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s