Don McMinn

Your mood affects your judgment. When making a decision, if you’re happy at that moment, you may decide differently than if you’re upset. For instance, a judge may issue a severe judgment on a criminal defendant because his roof leaked the night before and ruined his favorite desk. The same judge may issue a lenient judgment because he’s happy about leaving on vacation the next day. (Clever people learn how to use this truth to their advantage: when needing a decision from someone, they’ll wait until the person is in a good mood before asking.)

Generally speaking, a positive mood and disposition leads to a better life and sense of well-being than a negative mood or disposition. And relative to interpersonal relationships, we prefer to spend time with people who are happy and positive rather than those who are grouchy and pessimistic. 

But there’s at least one instance in which pessimism can be an asset. Being in a good mood (or by nature positive and optimistic) can make us naive and we can be easily misled. When we view life through rose-tinted glasses, our optimism can lead us to make bad decisions.

So, while it’s better to have a positive outlook on life than a negative one, be aware that positivity has a downside; it can distort our judgment. Be positive but don’t be gullible. Don’t believe everything you’re told. Don’t be swayed by charming people. Don’t be overly influenced by first impressions. Don’t be duped by misleading information.

When it comes to interpreting information and making decisions, skepticism is better than credulity. Unbridled optimism can render you naive and lead to bad decisions.

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.” Margaret Mead

Prior to War World 2, the US military produced fewer than 3,000 planes annually. Then came war. In the next five years Americans built 300,000 planes. That’s 6.8 planes an hour, 24 hours a day. Our industrial complex also built five ships per day for four years.

Several years ago I wrote a post highlighting the fact that in 2016, the Queen Mary 2 (which at 148,528 tons and 1,132 feet long, is one of the largest passenger ships in the world) was totally remastered in 26 days. It was totally rebuilt—engines overhauled, cabins redesigned, painted inside and out, technology updated—in less than a month. Try to imagine the complexity of that project. But it got done by a focused, motivated group of people, no doubt led by a determined leader.  

Leaders, your greatest opportunity and greatest challenge is to harness human potential. Begin by creating a vivid, viable vision that will activate and focus dormant human resources and motivate people to achieve things they could never imagine doing on their own. 

Before Mary and I got married, we developed a simple, handwritten budget—two columns (income, expenses)—and every month we updated it and talked about any variances. When computer software became available we used Quicken. We’ve had an annual budget for 46 years. It’s worked well for us.

Every organization and family needs a viable budget. I’m amazed at how many people deal with budgets at work but don’t use one for their personal finances. Budgets are necessary and beneficial in both venues. [Do you have a personal budget?]

A budget is a financial plan.

The budgeting process forces you to think realistically about income and expenses. A budget produces transparency about expenses and helps you prioritize income. When my daughter first considered buying a car she was surprised to discover the actual costs of ownership (payment and interest, insurance, gas, repairs, toll tag, registration). A budget makes that transparent.

A budget is a plan, and plans often change, so mid-year adjustments are sometimes necessary, but they should be minor and infrequent.   

A budget allows you to manage your finances.

You can’t manage what you don’t measure. If you go on a diet, you can’t manage it unless you regularly measure your weight. If you want to learn a new skill, find ways to measure your progress. 

A budget allows you to measure and therefore manage your finances. You’ll realize how your money is actually being spent (for instance, spending $4.50 every morning at the coffee shop will cost you $1,642 annually), and most importantly, you’ll discover if you’re spending more than you’re making. 

A good budget eliminates surprises.

One sign of a good budgeting process is that there are few financial surprises – large, unexpected expenses. Anticipate your financial needs—particularly large purchases—and put money aside to make sure you’ll have funds when needed.  

For instance, both our cars are paid off, but we continue to make a monthly $500 car payment into a savings account. (Long term, it costs us about $250 a month to drive a decent car, so $250 x 2 cars is $500.) When our current cars need replacing we’ll have enough money to pay cash for new ones. Our refrigerator is 26 years old so it could die any day. We’ve already set aside $2k for a new one, so we won’t be surprised or dismayed when the current one expires.

An annual budget should prepare you for retirement.  

When you’re in your 20s and 30s, it’s hard to imagine that one day you’ll be old, and that you need to start now to financially prepare for those later years. But old age inevitably arrives.

My personal advice: Starting with your very first paycheck, invest at least 5% of all earned income in a low-expense index fund that represents the broad stock market. Don’t try to outguess the market because long-term that doesn’t work. Just put your money in an index fund and don’t touch it until you get old. Do that for 45 years and you’ll be in good shape financially. (When I was 30 years old I withdrew $10,000 from my retirement account to pay for…[I can’t even remember]. If I had left the money in the stock market it would be worth $210,000 today.)  

An annual budget is not just about the next 12 months, it should also prepare you for old age.

When is the best time to plant a tree? Twenty years ago. When is the second-best time to plant a tree? Now. The same applies to budgeting. 

I don’t want this post to be morbid but it starts out that way. The main theme is living life to its fullest, but first let’s talk about death.

Death is inevitable and unforeseeable. It can occur suddenly at any time, or it can approach slowly and predictably. 

As I get older (and particularly as I approach that ominous statistical factor—the average life-expectancy of a male living in America) I often think about final experiences, because for everything I do in life, there will be a last time I do it. There will be a final time that I eat dinner with my family, embrace Mary, sing For the Beauty of the Earth, see a sunset, visit London.

This thought doesn’t bother me; it doesn’t make me anxious or fearful. To the contrary, it’s beneficial because it reminds me to savor every moment of each day and to delight in experiences both great and small … to approach every experience as if it were my last time to do so.

For instance, the last time we visited Dubai I said to Mary, “This is probably the last time we’ll ever come to Dubai, so let’s enjoy it fully.” Though we go to London every year at Christmas, last year may have been our last. You get the point.

This exercise in crafting perspective requires negotiating the inevitability of death with the immeasurable joy of living.

To end this post, I’ll defer to poets.

Thoreau encouraged us to live fully in the moment when he wrote, “I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived…I wanted to live deep and suck out all the marrow of life.” (from Walden)

Hermann Hesse wrote,

“Life passes like a flash of lightning
Whose blaze barely lasts long enough to see.
While the earth and the sky stand still forever
How swift changing time flies across man’s face.
O you who sit over your full cup and do not drink,
Tell me, for who are you still waiting?” (from Klingsor’s Last Summer)

You never know when you’re experiencing something for the last time so enjoy every moment of life.