What We’re Thinking

“Fewer fruits and vegetables, more carbs and cheese.”

That was the recommendation our pediatrician gave us a few weeks ago for our one-year-old daughter. It was enviable. Sign me up for that diet.

The next day I dutifully added “block of fresh mozzarella” to our grocery list. When my husband returned from the grocery store, he dropped the heavy cheese log onto the counter and said, “These aren’t cheap.”

“How much?” I asked.

“$11.49.”

I wouldn’t have bought it if I had been the one shopping. But I wasn’t—and he wasn’t the one who created the list.

Not knowing whether a backup cheese would’ve been acceptable, it was his turn to dutifully do as he had been told. He balked at the price—but then bought the mozzarella anyway.

As I recently heard on NPR’s Planet Money podcast, “Groceries are really where everybody feels the pinch of inflation, unless you’re one of those people who doesn’t eat food.”

I am not one of those people. I would assume you are not either.

It turns out, though, that the pinch of inflation feels more painful when you do the grocery shopping for your household. After all, you’re the one witnessing firsthand the fluctuation in grocery prices from week to week.

Being in tune with those price changes—and directly feeling that pinch—also impacts your expectation of rising grocery prices. That’s called inflation expectation.

According to Planet Money, historical data have shown that women tend to feel more pessimistic than men about future inflation.

“All sorts of hypotheses have been proposed for that: ‘Oh, women have less financial literacy, less education. Or maybe women are innately more pessimistic about the future of the economy,’” says Ulrike Malmendier.

Malmendier is a professor of economics and finance at University of California, Berkeley, who recently studied how supermarket prices affect inflation expectations.

As she and her colleagues dug into their research, they considered more deeply those gender role assumptions.

“We thought about how women are being bombarded with these price signals while grocery shopping. Men are, at least traditionally, not doing that so much.”

Their research did indeed confirm that within households of heterosexual married couples, wives consistently expected higher inflation than their husbands.

And this is interesting:

In households where men didn’t do any of the grocery shopping, “this gender gap in inflation expectations almost doubled…” In other words, those wives were significantly more pessimistic about future inflation than their husbands.

However, “in households where the spouses share grocery shopping more equally, the gender gap disappeared.”

So never mind the hypothesis that women are less financially literate than men.

In fact, the gender gap in inflation expectations is due to women’s frequent exposure to volatile grocery prices—at least those women who do the grocery shopping.

In my family, the roles are reversed. If my husband hadn’t remarked on the price, I would have remained blissfully unaware of the astounding price of fresh mozzarella.

What about in your household? Who does the grocery shopping? If you don’t normally discuss the state of the economy over dinner, give it a try tonight, either with a partner or with friends.

• Do you and your dinner companion(s) feel the pinch of inflation equally?
• What are your expectations for prices over the course of the next several months?
• Are your opinions similar—or surprisingly different?

Now that I’m more keenly aware of the economic impact of our grocery list, I’ll be more strategic about our weekly meal plans.

Fingers crossed, carbs are less expensive these days than cheese. But given my newly pessimistic expectations … I kind of doubt it.

Buried near the end of the August 29 Bloomberg Businessweek story, “Hope You Enjoyed the Summer Rally,” was a remarkable piece of data.

“The American Association of Individual Investors’ latest survey showed that bears [PPA note: those pessimistic about market prospects] went from outnumbering bulls [those optimistic about market prospects] by 41 percentage points in June to less than 4 percentage points as of mid-August.”

As you’re very likely aware, the stock market declined sharply through roughly the first half of this year. The S&P 500 hit its year-to-date low point on June 16. A summer rally then lifted stocks; the S&P 500 rose roughly 8% from its mid-June low through the end of August, which includes this past week’s declines.

Amid all this topsy-turvy performance, we would note that investor sentiment was at its lowest at nearly precisely the moment in time that the market upswing began. For investors who acted on their pessimism and sold during that time period, they would have locked in their losses and missed a significant rebound.

Sentiment is a feeling. It’s not the Truth.

Being a long-term investor can be stressful. Especially when short-term fluctuations — most of which are the result of traders placing bets on short-term events with no connection to your longer-term goals — are covered tirelessly by the financial news media and an investment establishment that stands to profit when investors feel anxious.

Stress can make us do things we would not typically do when our minds and spirits are calm. Financial writer and author of The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness, Morgan Housel, writes about this phenomenon in his short essay, “Five Lessons from History”:

“…the idea that people who are under stress quickly embrac[e] ideas and goals they never would during calm times has left its fingerprints all over history.

“In investing, saying ‘I will be greedy when others are fearful’ is easier said than done, because people underestimate how much their views and goals can change when markets fall apart.

“The reason you may embrace ideas and goals you once thought unthinkable during a downturn is because more changes during downturns than just asset prices.

“If I, today, imagine how I’d respond to stocks falling 30%, I picture a world where everything is like it is today except stock valuations, which are 30% cheaper.

“But that’s not how the world works.

“Downturns don’t happen in isolation… So my investment priorities might shift from growth to preservation. It’s difficult to contextualize this mental shift when the economy is booming. That’s why more people say they’ll be greedy when others are fearful than actually do it.

“The same idea holds true for companies, careers, and relationships. Hard times make people do and think things they’d never imagine when things are calm.”

So what should investors do amid the volatility, uncertainty, and stress?

Likely not much.

This is the advice of New York Times “Strategies” financial columnist, Jeff Sommer, in his August 26 piece “To Make Money in the Stock Market, Do Nothing.”

Sommer writes:

“…buying and selling at the right moment isn’t going to happen regularly enough to beat the market. Instead, this year shows why it’s better, for the vast majority of people, to take a longer-term approach.

“Once you have set up a solid investing plan, using low-cost index funds for steady purchases of stocks and bonds, you can do absolutely nothing…further except rebalance your holdings every so often to make sure you have the proportion of stocks and bonds that you really want.”

This rebalancing process is one of the most important pieces of ongoing advice that Park Piedmont provides to clients.

Assuming your personalized investing plan is already in place, the asterisk here, as always, is if you’ve had a change either in your life circumstances, or your time horizon for the use of your financial resources, or in your long-term financial life goals. Then, it’s important to re-assess and ensure your custom asset allocation is still aligned with your longer-term objectives.

Otherwise, better to ignore the noise, and focus on enjoying the tail end of summer.

Twenty-five hundred years ago, a middle-aged man – a husband and father – walks miles across the Indian countryside to pay a visit to a teacher with an extraordinary reputation for insight.

Then as now, the Indian landscape was dotted with gurus and spiritual teachers.

But there’s something special about this teacher – his humility, his wisdom – that makes people travel great distances, at great personal risk, for a few minutes of his time.

When the man at last arrives and his turn comes, he says (and I’m paraphrasing here):

“Great teacher, I’m just an ordinary guy, married, with a few kids. What can you tell me that will help us be happy in this world and hereafter?”

The teacher, who has come to be known as the Buddha (“he who is awake”), nods. He’s given this question some thought.

“There are four things that are conducive to happiness in this world,” the Buddha says.

“First: find a profession you know well, and in which you can be skilled, efficient, earnest, and energetic.

“Second: save the money you’ve righteously earned through your hard work.

“Third: make and keep good friends who are loyal, thoughtful, intelligent, and open-minded – and who’ll keep you out of trouble.

“And fourth: live within your means, not spending too much or too little, avoiding both miserly hoarding and extravagance” (Rahula, 1959, p. 82-83).

This vignette comes from a slim, highly readable book called What the Buddha Taught, by the late Sri Lankan Buddhist monk, professor, and writer, Walpola Rahula.

If you’re keeping score at home, at least 75 percent of the Buddha’s instructions about finding happiness relate to our financial life. And the percentage is even higher when you consider that one way good friends prove their mettle is by helping us avoid doing extremely dumb stuff — including in the realm of money.

We’re curious: Does it surprise you that the Buddha’s teachings articulated such a clear relationship between good financial decision-making and happiness?

—

Rahula, W. (1959). What the Buddha Taught. Oneworld Publications.

Word association:

When I say, “Rod Tidwell,” you say…
Game show host? Nope.
Congressman somewhere? Incorrect.
Cuba Gooding Jr.’s breakout role in “Jerry Maguire”? Bingo. Well done.

Now, knowing what you do, when I say Rod Tidwell, you probably say…

SHOW ME THE MONEY!

There in his modest kitchen, dancing, jacking his body, holding that now-antique cordless phone, giving his agent Jerry Maguire a singular marching order.

Do you remember that scene? If you’re over 18 and have had access to basic cable, you must. It’s a great scene, and it still holds up 20 years later.

For those who don’t remember, here are the basics:

Rod is a young, talented, cocky wide receiver for the Arizona Cardinals, and Jerry Maguire is Rod’s agent.

For much of Rod’s career, Jerry has been a “super agent,” focused on tending the needs of the biggest stars of professional sports. Clients like Rod Tidwell – good, but not great players – would get the leftovers of Jerry’s time and attention.

But when nearly all of Jerry’s clients are poached by a rival at his agency, Rod is the lone hold-out who stays with Jerry. And this gives Rod some serious leverage with Jerry.

“Show me the money” is such a memorable movie line. But writer-director Cameron Crowe expected – perhaps better said, hoped – that a different catchphrase would emerge from Jerry Maguire.

And that’s Rod Tidwell’s invented word, the “Kwan.”

Recall that the “Kwan” is conceived in the Cardinals’ locker room. Jerry Maguire is talking to Rod, who’s still in the shower, about Rod’s contract negotiations.

Rod steps out of the shower, naked as a jaybird, and criticizes Jerry for just “talking,” while his peers, other NFL All-Pro receivers, are making the “big, sweet dollar… they are making the Kwan.”

“Kwan? That’s your word?” Jerry, now at Rod’s locker, asks.

“Hell yeah that’s my word. You know, some dudes might have the ‘Coin,’ but they’ll never have the Kwan.” Rod is still air-drying.

Jerry starts to ask, “What is –“ but Rod anticipates his question.

“It means love, respect, community, and the dollars too. The entire package. The Kwan.”

Jerry pauses. And then, upon reflection, says: “Great word.”

Despite Crowe’s high hopes for the Kwan, audiences were lukewarm – “pleasant, at best” – when screening the Kwan scene (Premiere Magazine, 2000). It’s hard to compete with the hilarious call and response of “Show me the Money!” Even Nick and Tom’s dear, departed Grandma Ruth loved saying that line.

As it turns out, Jerry Maguire isn’t really about football. And it’s only partly a love story, even though “You had me at hello” remains a cinematic signpost to this day.

What’s Jerry Maguire about, really? The search for meaning in the world of money. What we do for a living; why we do it; and what we aspire to in our professional lives.

Recapturing some lost meaning in the world of money is what prompts Jerry’s sleepless night in the movie’s opening moments. It’s the fuel behind his “mission statement.”

Other people reject his vision, and Jerry’s subsequent downward professional spiral is steep. In a fit of desperation, he launches his new agency. And that’s what sparks Dorothy Boyd (Renee Zellweger’s character) to trade her stable secretarial job at the big sports agency for the chaos of Jerry’s start-up.

Finding meaning in the world of money is at the heart of the conflict in Rod Tidwell’s character.

On the one hand, he is driven by “Show me the money!” The desire to amass it, flaunt it, and center his life’s work around that pursuit.

On the other hand, he is called to pursue the Kwan, a shopping cart of aspirations so eclectic – “love, respect, community, and the dollars too” – that Crowe had to invent the word because, tellingly, the concept didn’t already exist in our contemporary American lexicon.

Re-watch Jerry Maguire, and you see people act badly, underhandedly, immorally, contrary to their best selves, when their money doesn’t reflect their values.

Money for the sake of money is what “Cush,” the presumed savior of Jerry’s fledgling agency and the number one pick in the NFL draft, is focused on. Cush’s father assures Jerry that they’ll stay with Jerry’s agency – but then they ditch Jerry without a word of warning.

Money for the sake of money is what “Show me the Money” Rod Tidwell is all about.

In a climactic scene, Jerry and Rod, now friends as much as client and agent, are arguing. Rod’s frustrated that despite a great season, he still has not received a contract extension. Jerry tells Rod:

“I’ll tell you why you don’t have your ten million dollars yet. Right now, you’re a paycheck player. You play with your head, not your heart.

“Your personal life? Heart. But when you get on the field, it’s all about what you didn’t get, who’s to blame, who underthrew the pass, who’s got the contract you don’t, who’s not giving you your love.

“You know what? That is not what inspires people. Just shut up, play the game. Play it from your heart. And you know what? I will show you the Kwan. And that’s the truth.”

To which Rod says, “Quit using that word, Kwan. That’s my word!”

As opposed to an attitude of “Show me the money,” money in service of the Kwan – money as one crucial component of the good life – is the journey that the movie’s main characters, Jerry and Rod and Dorothy, all take in one way or another.

The Kwan is only attainable when money is an expression of authenticity, of one’s true self.

Working remotely the past several years, our Park Piedmont team has stayed close in a number of ways – chief among them, team huddles over Zoom.

The huddles are our virtual water cooler: a space to convene, connect, and catch up.

As you’d expect, when any of us has a big plan on the horizon – say, a family move or a long-planned vacation – we revisit their progress regularly.

That was the case this past winter and early spring for our colleague Kathryn, who with her boyfriend was planning the trip of their lifetimes: a road trip across Iceland.

As you’ll read in Kathryn’s thoughtful essay below, money always had a seat at the table – both in the planning process and during their travels.

A big challenge: how to be thoughtful around budgeting and spending, without letting the ongoing money conversation overwhelm their fun?

• • •

“Do you have any idea how expensive that’s going to be?”

When my boyfriend and I booked our trip to Iceland in November of 2021, that was the most common feedback we received – closely followed by remarks about how exciting or beautiful the trip was going to be.

It was the trip of a lifetime for us, something we had dreamt about for years.

But when every conversation about it began with budget concerns, we started to get worried.

Could we afford this? Would we be able to experience Iceland to its fullest, or would we have to make some sacrifices?

In reality, most vacations require some sacrifices. It’s rare to be able to see and do absolutely everything on your bucket list in a single trip.

For us, it was time to have an honest conversation about how to prioritize our vacation spending.

When we travel, our expenses typically fall into the following categories: transportation, lodging, food/dining out, activities, and souvenirs or extras.

We knew immediately that we wanted to rent a camper van. With that decision we were able to take care of transportation, lodging, and most food expenses thanks to the van’s tiny kitchenette.

We saved some money by renting the smallest and most affordable camper van offered by the rental company.

In hindsight it would’ve been worth spending more money to get a bigger van – the one we rented was so small we couldn’t even sit upright in the back.

Overall, though, we loved our experience with the camper van and really felt like it was a good value.

To help manage costs, we agreed that we would cook breakfasts and lunches in our van and then go out for dinners. This ended up being a great arrangement.

Given our limited space, we stopped at local grocery stores every couple days to pick up fresh fruits, vegetables and other staples, rather than doing one massive shopping trip to stock up.

Allowing ourselves to dine out for dinners gave us the chance to try some classic Icelandic foods, like lobster soup, fish & chips, and Icelandic lamb. Everything we ate was delicious.

We consider ourselves foodies, so our one big splurge with food was making a reservation at a Michelin-starred restaurant in Reykjavik.

It was worth every penny, as we were treated to a 10-course tasting menu with wine pairings for each course.

The meal focused on foods that are either native or closely linked to Icelandic culture. Each course came with fascinating information about the origins and histories of the ingredients used.

Our next decision was how to budget for activities. There are so many options in Iceland!

From glacier hiking to whale watching to volcano tours and everything in between, the sky really is the limit.

Fortunately for us, we are nature lovers, so we knew most of our activities would be free, like hiking to waterfalls and beaches and dramatic oceanside cliffs to see puffins.

We did spontaneously book an ATV tour that took us across a black sand beach and through a river to the site of an old plane wreck. But we booked the shortest tour offered to keep costs low.

As far as souvenirs go, we brought a few small things home for our families (Icelandic chocolate, lava salt, etc.).

Still, there was one thing I knew I wanted to splurge on: a hand-knitted Icelandic wool sweater known as a lopapeysa. I found and bought one in downtown Reykjavik at a store that includes the knitter’s name on the sale tag.

Our week in Iceland was everything we dreamed it would be. And, deciding where to save and where to splurge really allowed us to make the most of an otherwise expensive destination.

By combining our lodging and transportation into one cost, and bypassing most of the expensive tourist activities to focus on the rugged wilderness of the country, we were able to comfortably spend on things like dining out and spontaneous experiences that really made our trip memorable.

• • •

When we’re having a discussion about spending, either with our clients or as a team, one of the books we frequently revisit is Happy Money: the Science of Happier Spending.

Written by two academics, it’s a surprisingly breezy exploration of the research on what makes for fulfilling spending.

Not like her vacation is getting graded or anything, but by the standards of Happy Money, Kathryn kind of crushed it.

First, the entire trip emphasized “experiential purchasing.”

As Happy Money’s authors Elizabeth Dunn and Michael Norton write, studies repeatedly show that people are in a better mood when they reflect on their experiential purchases rather than on “stuff” – the experiences are generally regarded as “money well spent.”

When people have regrets about “experiential purchasing,” it’s generally about what they didn’t do.

By contrast, when people have regrets about “material purchasing,” it’s typically about what they went ahead and bought.

The trip was one big experiential adventure. And Kathryn and her boyfriend found plenty to do, from hikes to time with puffins, that they were thrilled to be doing – and free to boot.

One other finding spotlighted in Happy Money: one’s sense of satisfaction with experiential purchases tends to increase as time passes. The opposite tends to be the case with material purchases.

So Kathryn and her boyfriend will be able to revisit their Iceland trip for many years to come.

Second: when they splurged, they “made it a treat.”

Happy Money makes clear that when you’ve been eating out of a camper van, that restaurant dinner will be extra special.

Third: their satisfaction increased with their anticipation.

During the planning phase, Kathryn and her boyfriend had roughly six months to imagine their trip: What would the glaciers look like? How would that handmade sweater feel?

According to Happy Money, research shows we tend to derive more joy from things coming to us in the future than from things already received.

Anticipation “provides a source of pleasure that comes free with purchase, supplementing the joy of actual consumption.”

Using some of the lessons from Happy Money, life with money can become a kind of mini laboratory. Through micro-experiments and trial-and-error, you can figure out if these findings are consistent with your own experiences.

Let us know what you’ve found!

Not long ago, on our neighborhood’s email list serve, a family having their kitchen gutted and remodeled posed a question.

“Is it appropriate (expected/customary),” they asked, “to give the workers, not the contractor, a cash gratuity?”

Around the same time, a friend was recounting a recent family road trip in Montana. The parents and their high school age kids had gone whitewater rafting for the day.

The friend shared that he’d asked the rafting guide how much he typically gets tipped — was it a dollar amount? A percentage of the total? A “tip of the cap”?

These questions, prompted by curiosity, logistics, and budgeting needs, also illuminate a larger, more mysterious topic: how do we learn money’s unwritten rules?

From the time we’re little kids, money is complex. Most of us don’t learn the ins and outs of money in school.

And within families, money is often shrouded in secrecy, due to family preferences and/or wider cultural norms — among them, a widespread taboo against talking openly about money.

This disinclination to discuss money is itself complicated and has many possible sources. (A 2020 article from The Atlantic is thought-provoking and eye-opening on the topic.)

So how do we all learn about money, if we’re not actually taught?

In reality, all of us, in one form or another, absorb what educators call a “hidden curriculum.” This refers to the things we learn, even though they’re not being formally taught.

Consider how you have, and haven’t, learned about money in your own life.

Who and what have been your sources of information? Was it family? The daily paper? Shakespeare? Sitcoms?

What do you wish you knew more about? Budgeting? Saving? Borrowing? Splurging?

At what points in time do you wish you’d asked more questions? Prepping for college? Contemplating a career path? Estate planning?

We can all point to some moment in time – very likely more than one – when we relied on our “hidden curriculum” about money to guide us.

One countercultural antidote for gaps in one’s financial education toolkit is, as we saw at the outset, asking questions.

On topics where you’re confused, or unsure, or could use a refresher, asking questions of reliable sources — including PPA advisors and our outstanding team — is an important way to keep learning about money.

While we at Park Piedmont might not know the proper amount to tip a whitewater rafting guide (this particular guide recommended 20%!), we are here to help with investing and financial decision-making, and to demystify some more of the unwritten rules of money.

Among the building blocks of our work as an investment and financial advisory firm, one is a prerequisite: an interest in money.

Now, what we’re calling this “interest in money” isn’t actually about accumulation. There’s nothing wrong in a prosperous life – indeed, there can be much good.

And the subject of wealth accumulation – for example, the question, “How much is enough?” and the more personal, “How much is enough for me?” – is fascinating and certainly worthy of exploration.

But when we write here about having a necessary “interest in money” to do this work, what we really mean is:

• having a deep curiosity in how people live with and use money
• how we talk about it – and avoid talking about it
• how we think about, feel about, dream and dread the essential, unavoidable, complex topic of money

• • •

There’s an essay about money we recently came across.

It’s called “Money Off the Shelf” and, interestingly enough, it’s written by a minister. In this essay, Rev. Lillian Daniel describes her deep ambivalence about money, dating back to her childhood.

“In some ways,” she writes, “I came to this bipolar ministry of money naturally, for I was behaving as I had been taught as a child. When it came to money, you did not tell the truth” (our italics).

As a child, she had been directed by her mother never to tell her father what things cost, because the information – that is, the truth – would upset him.

But as a young minister, struggling to make ends meet with student loan payments and full-time child care, Rev. Daniel opted, quite deliberately, to break her pattern of silence.

“I decided it was time to start telling the truth about money.”

As Rev. Daniel begins to speak openly about her relationship with money in what she calls “stewardship sermons,” she makes a confession to her assembled congregation.

Just as she feels called to donate time and money to worthy causes, so too, she admits to loving cars, clothes, dining out, and travel.

“But in telling the truth,” she continues, “I got a strong response. We started talking together about money.”

“I did not need to be a perfect, altruistic role model for God to use me in a ministry of money. We were all there to work on each other, and telling the truth, being authentic, was just the beginning.”

• • •

Welcome to the inaugural edition of Park Piedmont Advisors’ “Life with Money” newsletter.

Every Friday we’ll share some of our original thinking about the multi-faceted world of money, work, and wealth.

We’ll also share other sources – articles, podcasts, art, history, and culture – that illuminate something helpful, or valuable, or intriguing about our topic.

Let us say: we recognize money conversations are, for many, a no-fly zone.

Our goal at PPA – as a team that works with and explores the ins and outs of money all day long – is to create a space that’s comfortable for you, regardless of your background or experience with financial topics.

It’s a similar goal, perhaps surprisingly so, to Rev. Daniel’s work.

We hope you come to consider this a place where we can openly talk together about money and its role in our lives, communities, and society.

To that end: if you have topics you’d like us to explore – or if you want to weigh in – please do! We would love to hear what you’re thinking.

• • •

Back to Rev. Daniel.

Eventually, after something approaching a religious epiphany in a traffic jam on a Hartford, Connecticut, highway, Rev. Daniel and her husband meet with a financial advisor.

They talk about their jobs, their salaries, and their spending. Together, they come up with a roadmap for their financial lives moving forward.

Her advisor’s practical guidance, she comes to feel, is a gift.

In the process, what she describes as her ministry around money stands out as some of “the most important work clergy do.”

As she puts it, “We talk about money not because it shouldn’t mean anything to us, but because it obviously means so much.”

• • •

“Money Off the Shelf” is one of several essays found in This Odd and Wondrous Calling: The Public and Private Lives of Two Ministers by Rev. Lillian Daniel and Rev. Martin B. Copenhaver.

Did you enjoy this article? Sign up for our “Life with Money” weekly newsletter.