Aug 19, 1999 at 12:00AM
Certainly we Fools realize that, over the long term, whatever interest rate path the Fed chooses won't mean much. But we're only human after all; how can we NOT be a teensy-weensy bit sad as we watched our portfolio sag 4.09% today?
The worst thing is that no matter which path the Fed chooses, investors can't seem to win in the short term. Why? The day after the Fed chooses to either raise interest rates or leave them unchanged, the market will begin worrying about what will happen the next time the Fed meets. Worrying leads to pessimism, which leads to panic, which leads to premature selling, which leads to market volatility, which leads to more intense worry. Maybe it's a good thing that therapists have taken August off.
The American poet Robert Frost wrote, "The reason why worry kills more people than work is that more people worry than work." We Fools prefer to spend our time enhancing the quality of our lives and putting as much distance between us and worry as possible.
One way we can all make our lives better while waiting for the Fed's decision next week is to learn how to get the biggest bang from our bucks. On our Living Below Your Means message board, Fools energetically share their secrets for getting more for their money. From pet food to car buying to rebates to free ice cream, there is almost no topic that Fools can't find a deal on.
Living below your means, however, is not a style that appeals to everyone. Some people can't be bothered spending the extra time and research trying to save a few bucks. I think that Living Below Your Means Fools have the "savings" gene -- they inherently know that accumulating pennies in the present leads to plumper piggy banks down the road.
On the other end of the spectrum are debtors, those who live above their means. Every former or current debtor knows the agonizing pain of trying to climb out of the ditch of debt. You begin the journey towards debt freedom with an earnest commitment, stoically gathering dirt under your fingernails as you begin the climb. Halfway up towards the light of no debt, an unanticipated expense smothers all your valiant efforts, throwing more dirt upon you and hurling you mercilessly back down to the bottom. And you begin again.
Getting out of debt takes discipline and commitment. It takes giving up some indulgences in the short term as you move towards the possibility of financial freedom in the long term. Sometimes it takes giving up things you really, really like and would rather not do without. In that case, the gang at the Living Below Your Means board can help, as they know the mysteries of learning how to enjoy life's treasures for less money.
Remember that being out of debt is a precursor to successful investing. Too often, debtors think that if they could just borrow a little more money and make a killing in the market, they'd be saved. Unfortunately, it doesn't work that way; the more you borrow, the more chains you wear. And since there are no guarantees that your investments will be profitable, you run the risk of digging deeper into the never-ending well.
For those who prefer to live above their means, please visit our Credit area for Foolish help.
Having been a debtor AND a saver, I prefer the balance of living within my means. Sure, it's fun getting a "deal" on things. But I'm from the crowd that wants what they want, when they want it, and is willing to pay a little extra for convenience and service. This works as long as a consistent saving and investing plan is adhered to.
As for August 24thï¿½ I don't care what decision the Fed makes regarding interest rates. I won't be watching. Instead, I'll be off doing what Fools do best -- painting the town in celebration of my birthday and giving thanks for the gift of a Foolish life. Within my means, of course.
P.S. If you find your friends developing a love/hate relationship with your fixation on economic and market trends, you'll probably find our Foolish writings on Greenspan and the Federal Reserve tantalizing. Take a peek as Louis Corrigan opines on the interpreters of Greenspeak.
And check out our Foolish feature on Greenspan and The Fed.
- Aug 19, 1999 at 12:00AM
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