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The Creation-Consumption Equilibrium

It's no secret that we at The Motley Fool think you should be the maestro of your money. (However, it is less well-known that the letters in "The Motley Fool" can be rearranged to spell "Fly me to the loo.")

Why be the conductor of your cash? Because you know yourself better than anyone else does, you will keep expenses to a minimum, and -- unless you have multiple personalities -- there aren't any conflicts of interest between you and yourself. If you want a job done right (ethically and cost-effectively), you have to do it yourself. Who can we rely on after the decline of traditional pension plans, an insecure Social Security program, and all the Wall Street shenanigans we've seen over the past few years (e.g., analysts publicly hyping stocks they privately called "crap," or mutual funds giving special privileges to favored clients)? The answer: no one.

No one, that is, except yourself. Do-it-yourself money management is often portrayed as a choice, as if there were viable alternatives. But even if you rely on others for help -- or give others control over your resources -- you still have to choose the right people and keep an eye on them. There are times when people need good financial advice -- after all, that's why I created my Rule Your Retirement service. But no matter whom you hire or what organization you rely on to secure your future, the only person who has to live with the result is you.

Accumulation without abdication
There's a limit to what you can do on your own. By virtue of living in a temporal, technological, specialized, globalized, and tax-ified world, you rely on other people and institutions for many of life's necessities and niceties. However, as a creature endowed with free will and easy credit, you have a whole lotta latitude in choosing the balance between interdependence and independence; between passivity and activity; between getting charged and taking charge.

I call it the "creation-consumption equilibrium." It's that happy harmony of doing some things for yourself, and having some things done for you. For most people, the right balance is more of the former and less of the latter. Not only is this better for your net worth, but it also does grand things for your self-worth.

Without wading too deep into the smarmy waters of "self-esteem," "self-actualization," and "self-delusion," there is value in creating something, whether it's your own financial plan, your own pasta sauce, or your own entertainment for your kids.

Producing something -- coming up with an idea, developing the plan, solving the problems -- is the source of true joie de vivre and achievement. No one ever won a medal for being in the audience. No one wants to look back on his life and only be able to say, "I sure hired a lot of people."

What were your best experiences, your proudest moments? They probably involved something you did, and perhaps some form of creation. (It may have been some form of procreation, but let's keep this article PG.) I enjoy all the Star Wars movies -- except the lame love scenes -- but watching them will never mean more to me than the dance my wife and I choreographed for our wedding, or the times back in my teaching days when I deviated from the traditional lesson plan -- and it worked.

The art of financial planning
I'm not saying you have to write a bestseller or solve world halitosis. Your creation may lie in your musical talents, a super-comfy house, or fun with spoons. For me, my masterpieces-in-progress are my marriage and kids, a few good articles, and my collection of photocopy art (known affectionately as "phart").

But all of us should be crafting a piece de resistance of our personal finances. Compose a retirement plan... before it's too late. Find a way to get your money to your priorities before it's spent on frivolities. Formulate a way to do things you want to do and make money from it.

How and what you do it is up to you; that's the fun part. To help you with your creation, consider a 30-day free trial to Rule Your Retirement for your consumption.

According to the scale in Robert Brokamp's bathroom, it seems that too much consumption has led to waistline creation.The Motley Fool is investors writing for investors.


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