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Does anyone know what these objects are?

At one time, to the Bangala of the Democratic Republic of Congo, this spear tip was pure currency. So, too, were these Kirdi iron forms from Cameroon. Money. These prized and valuable objects—from small cowrie bells to spears—were accepted as payment for other valuable items, and their accumulation represented stored wealth. A portfolio of sorts.

Most frequently, these African currency objects were used as “bride wealth,” compensation to a family for “losing” a daughter to marriage.

Wealth to the Lesotho (pronounced le-Soo-too) tribal people, who live in an area now called The Kingdom of Lesotho, was cows. Aren’t you glad that I didn’t bring the cow but brought the bell, instead?

You may have heard Lesotho—which is about the size of Maryland—referred to as “The Kingdom in the Sky” or “The Switzerland of southern Africa” for its beautiful, yet rugged mountainous terrain.

In some parts of the world, as in Lesotho, wealth is still measured by things crafted, collected, or herded. And, in some cultures, wealth is measured not by what one accumulates, but by what one can afford to give away. The potlatch Indigenous peoples of the Pacific Northwest come to mind.

Visualize for a moment the Lesotho herd boy in southern Africa, prodding valuable grass-chomping goats or cattle to greener pastures. So long as the animals’ bells tinkle and jingle, he knows they are safe. The people of his village have entrusted him with their wealth, and they prosper as long as the young herder protects their property from predators on four legs or two and helps ensure by his presence that villagers will earn a return on their investment in the form of kids and calves.

Money. It’s a strictly human invention and tantalizingly juicy for being a conversational taboo. We either can’t talk about it or we can’t stop talking about it. We flaunt it or hide it. Allusions to money permeate our art and litter our language. Something is “on the money,” “in the money” or “out of the money.” We demand, “show me the money!”

We expend enormous energy accumulating and growing it only to seek creative, rewarding, philanthropic, or controversial ways to divest ourselves of some or all of it in our eleventh hour. We can’t take it with us.

Wouldn’t it be wonderful if life were so simple that all we needed to ensure our security in old age were a dozen strands of shells clinking and clanking about our necks, a pen of fat pigs to attract worthy suitors for our daughters, or goats aplenty to make cheese for not just family but for friends and neighbors as well?

Once-isolated cultures now sell their natural wealth—land, water, air, sub-soil mineral resources, or raw materials to corporations or governments. Money of some sort changes hands, but it doesn’t avert a different kind of impoverishment. Each transaction makes more conspicuous the effects of our tampering with this single, complex global organism and its ability to restore and regenerate itself.

As our economic world expands, so, too, does the vocabulary by which we communicate our financial and investment. Words like “options” and “futures” transmute and take on connotations far distant from their original meanings.

However advanced civilizations have become, we have not outgrown ritual trading. Only its outward manifestations look different. Pork bellies and livestock may still be part of our portfolio mix but, luckily, we no longer need to track their whereabouts. That’s done electronically. Everything and nothing has changed. Wealth is a ubiquitous symbol of power and prestige, but its practical function is still as a hedge against hard times.

At first blush, it may appear that how we provide for a rainy day is less significant than that we provide for it. Those of us who are charged with the awesome responsibility of not merely protecting another’s wealth but primarily of increasing it know the how does matter. Research, history, common sense and technology are tools that assist our recommendation process.

Lately, those who prefer to fly solo and build their economic safety net without a bona-fide advisor are tapping into a burgeoning network of online investment services. One recent print ad promoting a self-service website hooks do-it-yourselfers with a sly one-liner: “If your broker’s so great, how come he still has to work?” The next condescending line I hear also sets my teeth on edge. “Maybe it’s the dozen or so needy clients.”

Needy? That flim-flam talk about incompetent, dependent clients is hogwash. The majority of clients engage financial advisors because they’re smart and realistic about who has the expertise to grow their wealth. Of course, advisors have to earn client trust and assure them that in they’re acting in a responsible, fiduciary manner. Somewhere along the way, our concept of and language about money, wealth, and managers to help us grow it got lost in the translation.

But the theme is ancient, drawn like a thread drawn through time from the core of the collective consciousness: when it comes to safeguarding our future, most of us revert to basic preservation instincts. We gathered, preserved, and stored foodstuffs in times of plenty to assure survival in lean times. We stocked up on firewood to meet our longer-term needs. Is the dawn of financial planning so inconceivable? Do we suspect for a moment that the value of acquiring and breeding a number of animals to start a herd escaped the calculation of some ancestral planner? They were shrewdly reinvesting the proceeds and increasing their assets. Furthermore, what fraction of a millisecond did it take to project that building a substantive herd meant a village could better adapt to the risk of losing a few precious beasts to disease or predators? Whether risk management was an instinctual or learned next step, goats, pigs, cows, and chickens diversified their animal investment. The prospective groom who could sustain the increase in dowery price for a bride from five goats and two cows to six goats and three pigs had the advantage.

Fortunately, I don’t have any clients who count their wealth by the head. But even if they did, the same sound principals of diversification and reinvestment of proceeds would still apply.

So, what does money mean to you? Security? The freedoms to start a new career or to drop out of an outdated one and become a lifelong learner? One thing I hear consistently from my clients is “money means the freedom to choose. . . .” And the choice of many people seeking professional advice (and do-it-yourselfers, too), is to be in a position that work is optional and retirement is affordable.

A recent article in a prominent financial journal states that a phobic condition related to our primal instinct for preservation has been identified. “Nest Egg Nervosa.” Both sexes report NEN symptoms . . . such as daydreaming about evocative Tahiti beaches or sultry nights in Pango Pango. Feelings of euphoria are abruptly replaced by episodes of anxiety. NEN sufferers are obsessively and compulsively driven to monitor their investment portfolios at all hours of the day and night . . . terrorstruck their money isn’t growing and they’ll never see retirement, much less Tahiti.

Like a virus that attaches itself to traditional thinking, Nest Egg Nervosa replicates itself again and again until its work-a-day-world-weary host weakens and rational thought is overtaken. According to research, Nest Egg Nervosa is highly contagious and can infect healthy thought processes indiscriminately, without warning.

One day you could return to the office after a heart-thumping presentation to your most-promising prospect, to find the staff’s throwing a party for your colleague down the hall. You discover everyone’s celebrating her retirement—ten years early! Not two, not five, but ten years before those “fully vested” or Social Security carrot-on-a-stick projections. Worse yet, she insists on calling her achievement financial independence!

Just about the time you’ve shoved the implications of her independence toward the back of your mind, your spouse smiles over morning coffee and asks if your 401(k) will provide enough retirement income so that your mother-in-law from Kansas can give up her house and move in with you. In a panic attack, you rush to the bank, open an IRA with a 4.9% Certificate of Deposit and pledge every non-qualified dollar toward construction of mother-in-law quarters above the detached garage so you keep your morning coffee to yourself.

Whether you’re chasing a woolly mammoth, spear in hand, or investing today to assure retirement happens twenty years from now, there’s no doubt about it, fear is a great motivator for action. In his 1995 letter to shareholders, Warren Buffet called fear “the foe of the faddist, but the friend of the fundamentalist.”

In this wired age, when investors are born at the click of a mouse, and the chairman of the Federal Reserve Board—the Archdruid of global finance—becomes a household name, wannabe retirees are getting younger and younger. The two questions they ask me most are: how soon can I retire? and, how long will my money last?

A few weeks ago, I read a projection that one in every two people age fifty today will live to be one hundred. Healthy people could easily face retirements of twenty-five, thirty, or more years. In 1933, expected age at death was sixty-three. It’s interesting that the Social Security Act came into effect in 1933, and with it, the mandatory retirement age was set at age sixty-five, two years beyond the actuarial age of death. The Social Security Administration hadn’t a crystal ball that—for the most part—life expectancies would continue to rise.

What would it take for Social Security to provide benefits for an aging population throughout twenty, thirty, or more years of retirement?

I empathize with Nest Egg Nervosa sufferers. I’m not at all critical about our obsession with achieving financial independence at an increasingly younger age. I think it’s a healthy indicator of growing self-reliance. After all, who wants to live less well down the road?

Unfortunately, life puts lots of obstacles in the way of reaching the brass ring. Inflation is only one of them. With retirement comes big-ticket expenses that must be anticipated as we grow our portfolio. When I got my first car as a high school junior, gas was $.26 a gallon. When I married, my husband and I sprung for a sporty, racing green Cougar at $3,600. We never dreamed that thirty years later an even more sporty four-wheel-drive SUV would cost ten times that much. I don’t have to tell you inflation erodes your investment nest egg.

Speaking of eggs, a handout my investment class finds funny, sad, and enlightening compares the 1970 cost of a dozen eggs and other groceries to their price today. In 1970, a pound of coffee sold for $.91. Its anticipated cost in 2010 is $9.50. Obviously, the researcher who projected that number never bought gourmet coffee in Santa Fe, or anyplace else for that matter. A cup of coffee today costs three times what a pound of coffee cost in 1970.

I wonder if the Lesotho worried about inflation. Did they lie awake at night and fret that the livestock under their watch might not produce sufficient offspring to offset the rate at which stealthy predators prune the herd of the too young, too old, and too dumb? And what if their future wife’s family increased their “lobola”—their daughter’s bride price?

Maybe, in the past, worrying’s wasn’t the nature of tribal peoples like it is for some of us today. David Hale, global chief economist with Zurich Financial Services in Chicago thinks we’re a pretty neurotic lot. “There’s no denying that investors in this market react to their fears of inflation as much as to the reality of it,” he says.

If not inflation, we can cry doomsday over an impending recession. A November 20, 1998, J. P. Morgan Report forecast “a mild recession [in the first half of 1999].” No, you didn’t miss something. The economy continued advancing at a jolly clip. No trace of recession . . . mild or otherwise.

That same month, in his column, “The Excellent Investment Advisor,” financial guru Nick Murray nailed our risk aversion to the wall: “In ten years, Russia has gone from a totalitarian prison state to a brave experiment in free-market capitalism to total collapse. Mexico has boomed, busted, and boomed again. How are we to change our course of action regarding investments, based on these facts?”

“Earnings, schmearnings,” scoffed Murray—his commentary on the many overvalued companies he observed. Their “stocks aren’t just selling on fear,” he said, “they’re selling on raw, mindless, screaming terror!”

See? That proves it. Human nature’s reasonable (and wise) need to reduce risk hasn’t really changed. Nor has our perception of the equation security equals money. We get adrenaline rushes from a stampeding bull or the threat of a shadowy, elusive bear rather than from driving a “sounder” of warthogs into a ravine.

While our nature doesn’t change, we do become desensitized. Not many years ago, we snickered at the prospect of a Dow 10,000. A prophecy to be released shortly, published by Times Books and penned by Washington Post columnist James Glassman and American Enterprise Institute scholar Kevin Hassett, is titled Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market.

Another read is Dow 100,000: Fact or Fiction. The gist of this Prentice Hall publication is that stocks will return 11 percent a year until around 2020. Yale finance Professor Roger Ibbotson’s stargazer predicts Dow 100,000, too—around 2024. What’re four years more or less when you’ve got a bull by the horns?

Foolishness. That’s what Princeton economist Burton Malkiel calls it. He writes about investors’ efforts to beat the market. In A Random Walk Down Wall Street, he warns against timing the market and advocates risk management through diversification—the more diversified, the merrier.

Of course, you and I (and those villagers) have been practicing risk management through diversification for some time. So have investment companies who keep creating new mutual funds, which are, by nature, diversified. And now we have Exchange-Traded Funds, or ETFs, and “Spiders,” or SPDRs, that behave a little differently. Our portfolio options (not to be confused with complex options trading) are increasing.

After three years of “dismal” returns, as one article put it, 65 percent of U.S. stock mutual funds beat the Standard & Poor’s 500-stock index, with the average fund returning 10.2 percent. That’s three points above the market.


A cheerleader for mutual funds has been Suze Orman—you know, the financial lecturer described by one journalist as “something like a bad car wreck: painful to watch, but difficult to tear yourself away from.”

Orman is a little like a cross between Madonna and Deepak Chopra . . . a material girl brimming over with spiritual and financial abundance . . . especially on the heels of countless Oprah Winfrey appearances and her pop book, The Courage to Be Rich. Wisely, she does change her tune with the times, however.

Author and self-empowerment guru Stuart Wilde, who had for many years graced the lecture circuit with his cocky English sense of humor, earned much of his millions giving us advice: we have permission to prosper. We can transcend “Tick Tock,” attract money, and become fiscally empowered. His sixth book was titled The Trick to Money is Having Some, and he continued to publish about empowerment, personal freedom, and peace.

A sensitive colleague who lives and writes in Santa Fe understands our approach avoidance with money. He’s seen how Nest Egg Nervosa can strike at the hearts of sensible men and women who had been reared by well-meaning parents to believe you should retire at the point when your company is ready to give you a nice watch for your years of service, or at sixty-five, and not a day before. Retirement portfolio? The company’s pension plan. It wasn’t dinner-table talk. In fact, it’s likely you never knew how much your father earned. Possibly, neither did your mother. But in 1978, Congress passed a new tax code. The emergence of the 401(k) and similar “defined-contribution” plans killed pensions.

Anyone past the age of sixty-something might remember the post-WWII resurrection of mutual funds. By 1970, there were three hundred sixty-one mutual funds with assets of $47.6 billion. In the mid-1980s, salaried workers and small business owners virtually stopped making new investments in the stock market except through mutual funds. While households’ net purchases of equities (stocks) outside of mutual funds declined, investors’ purchases of equities held within mutual funds grew from $5 billion in 1984 to $159 billion in 1999. That year, the total assets of 7,791 mutual funds reached $6.8 trillion.

By the 1980s, phone trading began to overshadow trading from the floor of stock exchanges. A decade later, DIY online platforms meant that trading mutual funds—which had been the domain of brokers—could now be picked off electronic shelves at fund supermarkets. In 1991, online brokerage firm ETrade was born. Consumers could trade while in their pajamas, sipping coffee, and watching the news. TD Ameritrade, Charles Schwab, and Scottrade followed. By 2001, consumers had to choose among one hundred forty online brokerage firms, weighing the benefits of increasingly “friendly” platforms, faster trading speeds, and lower trading fees.

Consumers’ direct ability to seriously conduct investment research and make informed decisions concerned professionals less than those adrenalin-rushed trades—chasing the “next best thing”—that could be executed with a fast click of the “submit” button. “Day trading” was worrisome.
The fund-of-the-day concept rattled Mary Shapiro enough that she campaigned “to keep funds from being sold like laundry detergent. Shapiro is president of the National Association of Securities Dealers Regulation.

This portfolio ballet is rather much like a lateral arabesque. One prominent mutual fund manager was candid about his frustration, saying, “moving from one fund to another has become so effortless [to the consumer] that it’s made running a fund a ‘horror.’”

How can mouse-click investing do that? Well, as investors give up on their “invest for the long-haul” strategies to react to temporary downturns in performance, massive withdrawals pressure fund managers to sell good stocks in order to write redemption checks. This bleeds funds of assets that could be used to build them.

Ralph Wanger of Acorn Fund explains: “The people who are doing a lot of [market] timing are causing a certain amount of loss to the long-term holders.” That could be you and me.

Cheer up. There’s good news. Asian markets are up, their currencies stabilizing. A Tokyo newspaper writes that American Express is increasing its Japanese clientele. According to an article in Smart Money, the two most attractive sectors in the Asian market are financial services and technology.

Companies in the business of money are pricking up their ears, keeping their eyes wide open and watching the alignment of the planets. If a crystal-ball gazer is glimpsing a Dow 100,000, should it come as a surprise that someone other than a palm reader is getting vibes that the future may hold yet unshaped “alternative” big-ticket investment products?

And, voila! We now do: cryptocurrency. The field is ablaze with flowers. But weeds grow among them.

So, I’m not here to tell you that American Express opened for business in 1894 and came through the Great Depression unscathed. Or to take another look at small-cap stocks because they offer “compelling value.” In fact, I’m not here to give you any investment advice at all. Would you expect a physician to prescribe one medication for a hundred patients? No, I just came here to talk about something near and dear to our hearts—money—not the perfect way for any one of you to grow it.

Just about a year ago, in an address to eager UC Berkeley ears, Allen Greenspan, chair of the Federal Reserve, put the human psyche on the couch. He said: “We have relearned in recent weeks that just as a bull market feels unending and secure as an economy and stock market move forward, so it can feel when markets contract that recovery is inconceivable. Both, of course, are wrong.

“But because of the difficulty in imagining a turnabout when such emotions take hold, periods of euphoria and distress tend to feed on themselves,” Greenspan said. “Indeed, if this were not the case, the types of psychologically driven activity we have observed would be unlikely to exist. As in the past, our advanced economy is primarily driven by how human psychology molds the value system that drives a competitive market economy. And that process is inextricably linked to human nature, which appears essentially immutable and, thus, anchors the future to the past.”

Remember the terror-conscious financial counselor Nick Murray? He commented on Greenspan’s uncanny insight into our nature. “Economies and markets,” said Murray, “get too far ahead of themselves when human psychology goes into its manic phase, and investor expectations outrun not just reality but possibility.”

What are the possibilities? In a metaphysical sense? Limitless. In the context of our financial lifetime? Well, we can get out the crystal ball. We can hedge our bets. We can follow sound financial management principles.

And, if we choose, we can view prosperity through different lenses. If we have erroneously romanticized what may appear to be the enviably simple, untethered life of the herd boys of Lesotho, we may better understand why. For them, the jingle of a bell marks not the end of a day’s frenetic trading but a signal that acquiring wealth of spirit is within the realm of human achievement.

Copyright © 2002 Charlotte Meares

Show Me the Money!

Riveting Topics

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