The Complimentary 1,440 Credit Card

This article is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA

hand written word "Complimentary"

My brother-in-law Bob recently told me about the Complimentary 1,440 credit card. Here were some of the features he mentioned:

* You must use the 1,440 everyday
* It expires at the end of the day
* It automatically re-news the next day
* There is no application to fill out
* There are no fees
* You won’t get a monthly statement in the mail
* You won’t earn any points
* It won’t affect your credit score
* Everyone is entitled to one
* There is no gold, silver or bronze status

I told Bob this sounded too good to be true.  I asked him how do you get this credit card?  Then he told me it’s not exactly a credit card. It’s the number of minutes you get in a day.

He was so excited when he heard about this ‘card’ that he wants to name his next boat ‘The 1,440.’

While we spend most of our time working with our clients and planning for decades and even generations, this got me thinking about how we spend our 1,440.

The obvious point here is that we all have the same amount of time every day, and well, it’s free.  The question then is what do we do with our time?

We all need to sleep, so, let’s say you get 8 hours of sleep per night.  That’s 480 minutes, one third of your time. If you are working full time this would be another 8 hours or another 480 minutes. Let’s throw in another 3 hours for eating, personal care, etc. So after working, sleeping, eating and personal care you have used up about 19 hours or 1,140 minutes. This only leaves 5 hours or 300 minutes left in the day. If you are working part-time or aren’t working, you will have a lot more time.

Here is the stunning thing.  According to Nielson, the average American spends 4 hours and 51 minutes in front of the TV screen every day. (1)That’s almost 5 hours of TV per day! Yikes!! How many times can you watch Naked and Afraid?  Is it me or is there a fairly predictable pattern to Property Brothers? Oh, and please tell me how those renovation budgets can be so low. Is there any question about how the next episode of Bar Rescue will end?

Oh, and that’s just watching TV.  According to Time, Americans check their cell phones 8 billion times a day. (2) On average, people in the U.S. check their phone 46 times a day.  The leader of this practice was Americans aged 25-35 that check their phone 74 times a day.  If you were awake for 16 hours you would check your phone an average of 4.6 times every hour for those 16 hours. By anyone’s math, that sure is a lot of checking your phone.

Media Diet

What do you need to do?  Start by turning off your TV, computer and radio and canceling the subscriptions to all of your newspapers and magazines…just kidding (sort of).  Honestly though, you probably should reduce the amount of daily information taken in.  Design a system that filters out most of this “noise.”  This system should block out much of this unnecessary information.  This noise isn’t limited to financial matters.  It stretches down the street, around the globe and back into your neighbors’ driveway.  Less is definitely more here.  This is addition by subtraction.  This system should only allow relevant information in.  After this system is in place, then what?  Get a couple of good books, throw a few logs on the fire and enjoy.  Which books should you get?  Peter   Lynch has written a few great books, One Up on Wall Street and Beating the Street.  He was the former manager of the Fidelity Magellan Fund and had an outstanding record.  His books simplify investing principals that can be applied by most investors.  Peter Bernstein wrote Against the Gods: The Remarkable Story of Risk and several other excellent books.  Risk was a concept that many investors forgot about during the period leading up to The Great Recession of 2008-2009.  The all-time classic however is Benjamin Grahams The Intelligent Investor, which describes value investing at its best.  Mr. Graham was a professor of Warren Buffet who apparently was a pretty good student.  For periodicals, only subscribe to two or three newspapers and magazines.  I like reading the Wall Street Journal and their sister publication, Barron’s on the weekends.

I’m not suggesting you become a hermit.  However I strongly recommend deciding what information is really needed and what you could do without.  When going through this exercise and cutting back on the TV, radio, newspapers and the Internet you’ll be pleasantly surprised with how much information that’s not needed.  Once this decision is made, become vigilant about keeping out the noise and focusing on what’s important.  So you won’t be the King or Queen at your neighbors’ next cocktail party because you don’t know what the “whisper numbers” (whatever they are) are for the Intel earnings that will be reported next Tuesday.  Oh well.  And you won’t be able to wax the martini crowd with your latest hot stock tip that’s going to find a cure for every disease known to mankind.  So you’ll just have to sit this one out.  Work on your jokes, tell some fishing stories or just brag about your kids.

Trend Watching

Of course it is difficult not to be an active trader in today’s gotta-have-it-all-now-instant-messaging-internet society.  Go into the gym, the barbershop, or the local gin mill and they probably have CNBC blaring on the television.  Hop in your car and listen to the latest business news on the radio on your ride home.  Waltz in the house, grab a beer, and spark up your computer to get the latest “news” on Yahoo.  Can’t afford to miss out on anything, can you?  Well, actually, you can.  Most of this “news” adds very little to the investment process.  It’s like salt; almost everyone could use less of it.

Your goal is to try to reduce, or even eliminate the short-term noise.  The key here is short-term; you’ll still need to keep your eye on the long-term trends.  This is easier to do when you’re no longer checking your portfolio four times a day online at work.  Then rushing home to watch the news and have an analyst explain why the Dow was up or down that day.  Please.  Go for a walk, go fishing, or play with your grandchildren.  Just do something fun.  When stepping back and looking at the long-term trends, it’s not too hard to see the falling price for computers.  The cost of a phone call has been going down since they laid cable across the Atlantic Ocean.  Interest rates declined steadily for over twenty years beginning in 1980. They have been stuck at almost zero now for 8 years. Finally, have you noticed the consolidation in the financial services industry?

Time is On My Side

The Rolling Stones said, “Time is on my side.” Alas, it can be. It just depends on how you choose to use it, every day.

Carpe Diem!

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of Thomas F. Scanlon and not necessarily those of Raymond James.

(1) Nielson – March 15, 2015

(2) Time – December 15, 2015