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Breakthrough Financial Planning | Brian Hufford, CPA, CFP®

Life’s seasons: mania and other emotional states For more on this topic, go to www.dentaleconomics.com and search using the following key words: life’s seasons, mania, emotional states, stock market, midlife crisis, Brian Hufford.

A long three-day weekend without travel or speaking has caused me to wax nostalgic about the seasons of my life. Perhaps I am feeling sorry for myself because my wife has been out of town, thus leaving me with household responsibilities. I can only stand so much football! If one thinks about the progression of life as seasons — spring, summer, fall, and winter — then perhaps spring would be from birth to age 20, summer would be from age 20 to age 40, and so on. The spring of my life was from 1949 to 1969. Why do the first 20 years of life have such a large emotional impact on us? I remember a tornado of emotional highs and lows during my first 20 years: high school graduation, finding the love of my life, and being drafted during the Vietnam War. Life seemed like a basketball game at the Indiana state finals. During this weekend, I had a revelation that the spring of my life almost perfectly matched Michael Alexander’s “economic spring,” which lasted from 1949 to 1966 when there was a secular rise in the Dow Industrials of 512%. If one views investment markets as barometers of mass psychology, then the 1960s certainly reflected all of those tendencies from Beatle-mania to Woodstock. My personal mania event was driving a new gold Pontiac GTO that my conservative father allowed me to have, perhaps out of fear of my upcoming Vietnam stint. Still, life didn’t get any better than having a 400-horsepower car, my senior year in high school, and dating the prom queen. It was my mania at the end of the bull market mania. The summer of my life was difficult, matching the mass psychology of Alexander’s “economic summer,” the secular bear market and its depressive mass psychology that lasted from 1966 to 1982. The Dow Industrials fell by nearly 22% during this 16-year period. I married the prom queen but was drafted, and we spent two years apart. I was in Vietnam for one of these years. While our marriage survived, my career life was difficult with a huge effort expended and little to show in return. I experienced the new joy of becoming a parent but never enough money to make ends meet. I tried one business venture after another but never succeeded in line with my hopes.

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December 2009 | www.dentaleconomics.com

Autumn is a period of beauty and the potential realization of reaping a harvest from a life’s work. It can also be a period of midlife crisis. Alexander’s “economic autumn” lasted from 1982 to 2000. During these 18 years, a secular bull market resulted in a nearly 1,370% rise in the Dow Industrials. Our nation’s midlife crisis and mania event was a debt bubble that threatens to destroy our economic future. My mania event was a dream-home project started toward the end of the secular bull market. I love architecture and wanted to cap my life’s hard work with an arts and crafts home that would be designed by a world-class architect. The project became a runaway freight train, abandoned last year as the secular bull market ended. Finally winter comes with its darkness, quiet, less activity, and an awakening of one’s spiritual side. My children are now grown — a daughter is a physician, a son has a PhD. “Economic winter” began in 2000 and Alexander believes that we have an additional nine years of economic winter to endure. As I speak to dentists around the country, I have notice less interest in bull market topics such as taxes, retirement saving, and investing. Dentists are wrestling with the impact of the economy and health-care reform on practices, along with their hopes to experience the economic success of a professional career, despite today’s difficult external circumstances. What I have learned is that external events should not be allowed to rob one’s peace of mind. In the end, I believe integrity, excellence, perseverance, family, and peace with God will prevail. Life’s seasons come and go. I tend to be a driven person and have a proclivity to measure my well-being with external scorecards. In winter, this can be a recipe for gloom and doom as the external and/or physical environment can demand what seems like super-human effort and wisdom to achieve economic-spring results. I am a big believer that hope springs from a vision of a future that is bigger than one’s past. Perhaps, it’s time that we throw away the external scorecard and instead focus a passionate future vision on an internal scorecard.  Brian Hufford, CPA, CFP®, is CEO of Hufford Financial Advisors, LLC, an independent, fee-only planning firm that helps dentists achieve financial peace of mind. Contact Hufford at (888) 470-3064, or bhufford@huffordfinancial.com.


Life's Seasons  

Dental Economics - 09/12

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