Wealth Beyond Markets: Harnessing the Controllables for Success

In wealth management, a diverse spectrum of individuals, families, and businesses seek guidance to navigate their financial journeys. From the budding wealth creators in their twenties and thirties to families with college-bound and future college-bound children, and even the near-retirees relishing in the realization of their dreams while overseeing their business empires, their financial pursuits are as varied as their life stages. This week at Members’ Wealth, we conversed with three distinct families, each fitting into these descriptions. Surprisingly, a common thread united them – a resolute desire to steer the conversation away from the capriciousness of markets and investment portfolios. Instead, they yearned to deliberate on aspects within their control: their expenses, capital allocations, and the conscientious efforts they could undertake to bolster their financial well-being.

This revelation instigated contemplation on a noteworthy characteristic shared by many, if not most, of our clients – be it families, business owners, or individuals. Although some clients undeniably revel in spirited discussions about investment markets, the recurring queries from our clients unanimously revolve around a central theme: "Am I truly optimizing my efforts?" and "How can I further enhance my financial standing?"

Amidst these inquiries, a fundamental principle emerges – the practice of "Controlling the Controllables." In sports psychology, this concept is revered as an essential tool for performers aiming to maintain their focus amid the din of distraction or stress. This principle, which embodies the very essence of risk assessment, underscores the significance of channeling one's energies into spheres of influence.

For those journeying through the labyrinth of investments and financial planning, the principle of controlling the controllables assumes paramount importance. It is a compass that guides individuals, teams, and organizations toward aligning their efforts with the factors they can shape. Contrary to misconceptions, this approach does not necessitate omnipotent control over every aspect of life. Instead, it empowers individuals to carve out a niche where they can maximize their impact on the future. So go ahead, still dote on yourself, and buy that $8 latte now and then.

Registered financial advisors understand that venturing down the path of financial enlightenment, there are several components that one can decidedly control, leading to a greater likelihood of success.

1. Bookkeeping stands tall as a cornerstone, a meticulous record-keeping endeavor that underpins sound financial decisions. At Members’ Wealth, we work with our clients to understand their income and expenses. We even suggest professional bookkeeping where it makes sense. We are not forcing families into budgeting, that can be a dirty word, just helping them think more strategically about where their money goes.
2. Maximizing contributions to 401(k)s or other retirement accounts is another tangible step, harnessing the potential of tax-advantaged accounts to fuel future growth. In 2023, it still astonishes us at Members’ Wealth of the lack of understanding of so many of the benefits of retirement savings optimization.
3. The strategy of house hacking, car sharing, or in other words, asset optimization, ingeniously leveraging underutilized spaces to generate additional income, demonstrates an astute control over resources. My favorite story of the summer was about a family whose college-age son was home for the summer and took to Facebook Marketplace and eBay to help mom and dad clean out the house and make money for everybody.
4. Regularly shopping vendors, insurance companies, etc. Insurance companies love that families just keep paying every year without revisiting what they are paying which is a huge part of the insurance company’s success. At Members’ Wealth, we nudge our clients to get us all of their insurance information so we can do the heavy lifting and go out help and make sure they are paying the most favorable price for insurance. Since we do not sell insurance, we are a neutral party out there helping them check their costs and coverage.

Managing, monitoring, and reducing costs, an often-underestimated endeavor can cascade into substantial savings over time. Moreover, also being mindful of tax efficiency (taxes are a cost!!) can considerably augment the longevity of one's financial endeavors.

Uncontrolled:

Yet, the converse holds equally true. The market's fickle nature stands as a testament to the uncontrollable. Fluctuations, driven by an intricate interplay of global events and sentiments, are beyond individual manipulation. As seasoned investors understand, attempting to tame this wild beast is a futile exercise. By reconciling with this reality, one can liberate precious mental space and channel it towards elements where influence can be wielded.

The timeless wisdom encapsulated in the phrase "You must choose to take hold of what you can control and let go of what you cannot" resounds as a guiding mantra. Hey ChatGPT, what do you think of all this that we are writing? ChatGPT, an AI language model developed by OpenAI states “Your circumstances may elude your grasp, but your character remains under your dominion. The actions of others may bewilder, but your choices are steadfastly yours. The outcome may remain uncertain, but the process is amenable to your navigation.” Fitting.

In an era where information inundates and distractions abound, the ethos of controlling the controllables is an indispensable beacon. This tenet echoes through the corridors of finance, illuminating the path toward prudent decision-making. The time and energy expended on matters beyond the grasp of control are merely squandered. By consciously prioritizing efforts within the realm of influence, individuals can pave the way for prosperity, unburdened by the vagaries of the market's whims.

In conclusion, "Control the controllables" serves as both a pragmatic strategy and a mindset that extends beyond the realm of sports psychology. Amid the intricacies of financial management, it crystallizes into a philosophy that empowers individuals to shape their own destinies. Through endeavors like diligent bookkeeping, strategic capital allocation, resource optimization, vendor shopping, and tax planning, among others, one can harness the reins of financial success. Concurrently, relinquishing the futile pursuit of market prediction allows the cultivation of mental resilience and focus on aspects that truly matter.

About the Author – Dane Czaplicki, CFA®

Dane Czaplicki is CEO of Members’ Wealth, a boutique wealth management firm that offers a comprehensive approach to serving individuals, families, business owners, and institutions. The firm’s goal is to preserve and grow its clients’ wealth to endure over time, while thoughtfully evolving its strategy to suit an ever-changing world. With over 20 years of wealth management experience, Dane and the Members' Wealth team thrive on bringing clarity and confidence to clients' unique situations. He believes everyone needs sound financial advice from someone whose interests are aligned with theirs, and is determined to put service before all else.

Dane received his MBA from The Wharton School of Business at the University of Pennsylvania and his bachelor’s degree from Bloomsburg University. Outside work, he enjoys spending time with his wife and kids, hiking and camping, reading, running, and playing with his dog. To learn more about Dane, connect with him on LinkedIn.

To get in touch with the Members’ Wealth team today, I invite you to email info@memberswealthllc.com or call (267) 367-5453. 

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Advisory services are offered through CS Planning Corp., an SEC-registered investment advisor.