Beware The Steady Drip

On October 10th, 2018 hurricane Michael ravaged the shores of Florida and Georgia.  It caused massive damage, and the death toll was 31.  On that same day, approximately 110 others died in car crashes across the country, and another 120 died by suicide.

Which do you think the media focused its attention on?

Exactly.

We humans have a strong tendency to focus on the sensational, the big.  Granted, the hurricane makes for stunning images and causes massive financial losses, more so than car crashes. 

It’s interesting how fatalities from the storm become a headline story, while the much larger body counts from other things continue every day, with very little coverage.

In the end, all of those victims – whether from the storm, the crashes, or suicide – are dead.  And it’s tragic no matter how you slice it.  But it’s clear where the focus of the media, and thus the country, goes in these cases.

Big disasters and tragedies in which people die will always happen.  Tornadoes, hurricanes, floods, and shootings will continue to kill people, and make headlines. 

But behind the scenes, around 220 people per day are killed by cars and suicide.  When it comes to fatalities, car crashes and suicide are the steady drip. 

Unhealthy Drips

Steady drips exist in many areas of life.  I’m constantly fighting a battle with foods that I ideally shouldn’t eat. 

I recently attended FINCON and treated it as a cheat week from my normal diet.  I knew I’d be eating out every day, and it’d be impossible to avoid all of the parties and meet ups.  And why would I want to?  Those things are what make FINCON fun.

I went all in, and ate a lot.  I had liberal amounts of sugary sweets and conference booth giveaways. 

But my cheat week at FINCON was expected, and the equivalent of the hurricane in the opening example. 

In reality, the steady drip of excessive snacking and too many packaged foods in my everyday life is the problem I have to deal with in regards to my diet.  It’s a constant fight.  I’m a sucker for high calorie nuts and chocolate covered espresso beans.  I’m challenged to walk past them 3 times in a row without taking some.

This fight against excessive calories is one most Americans can probably commiserate with.  It’s not the big birthday dinner out with friends that’s the main problem, it’s the constant steady drip of snacking in everyday life.

Squash Your Financial Drips

If the stock market tanked tomorrow and it lost say, 30%, it would be huge news.  And it would hurt.  If you care about your money and your financial future you would no doubt at least look at your net worth or your statements and internalized it.

Hopefully you’d be smart and do nothing.  Or even smarter and perhaps buy on the dip.  But it would demand your attention for sure.

However, is there a steady drip with your money that’s not getting your attention?  Is it your daily overpriced coffee?  Perhaps you have an actively managed mutual fund with excessive fees?  Or maybe you have a lot of cash sitting in a bank account earning less than inflation. 

Maybe it’s a monthly gym membership you never use.  Or perhaps you choose to overpay your income taxes every year and get a refund, incurring substantial losses from inflation and from not being in the market.

When a 30% crash comes, you’re probably going to behave just like the media does with a hurricane.  You’re going to focus on the immediate, the sensational. 

And you’re also likely going to continue to ignore the steady drips that are pulling on your finances.

In the end those drips all added up could possibly be hurting your finances just as much or more than a big market downturn will.  After all, the market will recover, but the money lost from those drips is gone forever.

The sensational will come and go, start focusing on the steady drips.