The problem with accepting good news

One of the most common comments I hear during review meetings is:

"Ok, tell me the bad news."

What's interesting is that this often comes from clients whose investments have actually performed very well.

Recently, I met with a client whose pension had grown by more than 20% over the previous year. The increase amounted to around half a million pounds. Yet before we even looked at the figures, her assumption was that there must be something wrong.

She 's not unusual. In fact, I think many of us have developed a habit of expecting bad news, particularly when it comes to our finances. 

Every day we're surrounded by headlines designed to grab our attention. Depending on which headline catches your eye first, we're facing economic turmoil, political instability, market volatility or some combination of all three. Recently, we've seen headlines warning about rising UK borrowing costs, falling currency values and ongoing political uncertainty, alongside predictions of future financial crises and market upheaval. It's hardly surprising that many people begin to feel uneasy about their finances when this is the backdrop to their daily news consumption.

After a while, it starts to seep in, and as a result, it's easy to start believing that the world is constantly on the verge of disaster.

It made me wonder how many people spend more time worrying about their money than thinking about what that money is actually there to help them achieve.

Bad news has always been better at getting our attention.

Nobody rushes into a room announcing that everything is broadly fine. Nobody eagerly shares a story about a journey that went exactly to plan, a meeting that was pleasantly uneventful or a week in which nothing particularly dramatic happened. We tend to talk about problems because problems demand attention, whereas things going well often pass quietly in the background without much acknowledgement at all.

After all, "Companies around the world continue serving customers and making steady progress" isn't much of a headline, yet it happens to be true on most days.

Another challenge with judging investments through the lens of headlines is that progress and news rarely operate on the same timetable. Headlines arrive every hour, while investment returns unfold over years.

This worry around money can become a habit, and habits have a tendency to follow us into retirement.

Many people spend decades saving, investing and preparing for a future where they have more freedom over how they spend their time. Yet when that freedom arrives, some find it surprisingly difficult to enjoy.

I've seen people with more than enough money still worry about spending it. I've seen holidays postponed, plans delayed and opportunities passed up because they wanted just a little more certainty.

Which is understandable, but at some point it's worth remembering what the money was for in the first place.

The purpose of investing isn't simply to accumulate wealth, It's to create options, to provide security and to give yourself the freedom to do more of the things that matter to you and less of the things that don't.

That's why I believe it's important to occasionally step back from the headlines and look at the bigger picture.

That doesn’t mean risk is nonexistent, markets will fall from time to time, and that's simply part of investing and part of life, but there is a difference between being informed and becoming consumed by every headline that passes across a screen.

And whenever I sit down with a client who's worried about their finances, I'm reminded that one of the most valuable things a financial planner can do is help people remember what the money is for in the first place.

Because when money has a clear purpose, it's much easier to stop worrying about it and get on with living.