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Your Mileage May Vary Thumbnail

Your Mileage May Vary

When you buy a car, you know that fuel efficiency is a range, with city mileage on the low end and highway mileage on the high end. The results depend on the environment that surrounds you.

The same is true in the investment world. Even within our own firm, we see the wide difference in how people perceive money based on the market environments they have lived through. Of course, the financial crisis of 2008-2009 is a big one, but even the smaller details of what each generation considers “normal” are telling.

Just take a look at the interest you could earn in a savings CD over the past three decades.


Since the millennial members of our team entered adulthood, interest rates have been near zero. It seems crazy to them that not too long ago, you could earn over 5% letting your money sit in a savings account with no risk! Now 5% would be considered within the normal range of returns for certain bonds, and savings accounts yielding 1% are considered “high-yield”. While times change and markets fluctuate, our perspective is all relative.  Right?

While we are all currently living in the same market environment, the landscape looks different to each of us. As an investor, you need to recognize that not only will you see different market environments throughout your life, but you may perceive them differently based on your experience. A 2011 study from TD Ameritrade showed how this perception varies between generations:

(TD Ameritrade)

Compare these attitudes to the breakdown of generational wealth according to Deloitte.

(Deloitte University Press)

Baby boomers are expected to continue to be the wealthiest generation in the United States until about 2030, yet the baby boomer group studied by TD Ameritrade felt the most financial stress compared to their parents. This could be for a variety of reasons—perhaps the financial crisis, or the crunch of the sandwich generation supporting both children and aging parents. But the juxtaposition of these two studies’ findings suggests that how you perceive your financial success is relative.  It doesn’t necessarily correlate with the wealth you actually have.

So why does this matter?

As an investor, you need to be aware that both your personal experiences and the outside market environment will affect the way you perceive the financial world, and how you approach your goals. There are some ways to increase your “fuel efficiency” to power toward your goals but in some cases, the environment limits or accelerates your efficiency.

What is actually within your control?

What is outside your control?

  • Adhering to a disciplined investment strategy
  • Managing risk through diversification
  • Automating cash flow and savings to efficiently implement your saving and spending plan
  • Eliminating investment commissions
  • Minimizing investment costs to institutional levels
  • Avoiding debts
  • Market performance
  • Individual investment performance
  • Interest rates
  • “Black swan” events
  • Political climates
  • Fiscal and monetary policy

If you recognize and work on the items that are within your control, your probability of greater wealth increases. But you should also expect certain conditions out of your control along the way.

Your mileage will vary. Now where are you planning to go?


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Halpern Financial, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Halpern Financial, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Halpern Financial, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Halpern Financial, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.