PRN: Thoughts on Money and Life

Physician's Money Digest, January15 2005, Volume 12, Issue 1

If you think long and hard enoughabout financial affairs and how itaffects your life, you can't help but try toabstract some sense out of what couldbe chaos. As my physics professor usedto say, "Entropy always wins." That is, ittakes a lot of effort to keep things fromflying apart. There is little coasting inmoney management—or life.

Take a step back once in a while fromthe fascism of numbers to reacquaintyourself with the big picture. It's so easyto focus on and get lost in the blizzardof financial analysis that is numbercrunching. Rate of return, annual percentagerate, price/earnings ratio, etc, allhave their place, but it's no wonder thatmost people tune out whenever the subjectof managing finances comes up.

Controlling Destiny

Focusing on numbers is really all abouttrying to control your destiny and get anedge that will give you some comfort,even if it's only as temporary as tomorrow'scascade of newer metrics. What weneed to keep in mind, though, is that thisstuff isn't really pertinent to most of uswho are finding meaning in our lives elsewhere(eg, in work, family, and our communities).Money management is just ameans to an end, not the end itself, asEbenezer Scrooge learned. Some advisorssay it's more important to keep movingahead in absolute dollars rather than lookat rates of return of some stripe, as long aswe don't miss the occasional, obviousopportunity or make the obvious blunder.You have a plan, do your best, and putnumber obsession down the list.

The catch:

Saturday Night Live

A corollary response to the seemingrandomness of money matters and lifeitself refers back to that old carnival game"Whack-a-Mole." You might rememberstanding in front of a board full of holes,up from which pops a mole or whateveranimal head. Your job to win a prize is to"whack the problem" back into its hole—much like getting ahead in your financialplan. Another problem immediatelypops up somewhere else. As GildaRadner used to say on ,"It's always something." Entropy again.

Creating Luck

Because stuff happens, and is alwayshappening, the common sign seen atfund-raising raffles comes to mind: "Mustbe present to win." One characteristic ofthose who seem to win more than averageand are deemed to be lucky is thatthey put themselves in a position to belucky more often. They fail more, yes, butalso win more. A golfing buddy of minewould say, "It's tough to win the Mastersif you aren't entered."

To stay on track, stay the course; youhave to be aware and involved—ready, inshort. A recent Frank & Ernest cartoon says,"Money talks, but it doesn't give directions,"which puts the point to our burdenand opportunity. Sure, we may fail fromtime to time, but if you think about it, failureis temporary—short of mortal issues.

Even the worst hit hi-tech bubbleinvestors are getting back on their feetand reaccumulating assets. They're wiser,sadder, but of necessity, still in the game.With all the troubles that many otherselsewhere have, it's reassuring that thosereading this magazine can still talk abouthaving discretionary money beyond thenecessities of food and shelter and whatwe can do with it. As an MBA friend ofmine recently said to me, "Thank goodnessmost of our problems are out of themargin." Thank goodness, indeed.

a partner

on the Stanford University

Graduate School of Business

Alumni Consulting Team, is a

practicing primary care physician.

He welcomes questions and comments

at jeffebrownmd@aol.com.

Jeff Brown, MD, CPE,