Is $220,000,000 a lot?
Yes, it is. I would answer rapidly and with certainty that $220,000,000 is a lot of money.
Recently I was with a group of associates and we met with an owner of a Major League Baseball team. He spoke to us for over an hour on the positives and negatives of owning a MLB franchise. One of the many things that stuck out from the meeting was that $220,000,000 is spent annually on player salaries and that he:
CAN’T CONTROL THE OUTCOME or PERFORMANCE OF THE GAME.
You would think if you annually spend $220,000,000 on something or someone you could have some expectations or certainty delivered. One would think it would bring a controlled and consistent outcome.
Are there things we are trying to control that we actually can’t control?
Are we spending extra energy and resources on something we think we can control?
Sadly I witness this phenomenon in the world of wealth management. I have seen and been to many offices around the country of really smart money managers who spend millions of dollars trying to find disparities in the capital markets on a daily basis, chasing opportunities for higher returns. When you take their returns and compare them to a broadly diversified portfolio…Guess what? They didn’t beat the market at all.
Sound familiar? This type of wealth manager is similar to the MLB owner who spends $220,000,000 a year on player salaries and knows he can’t control the outcome of the game and many other things inside the ballpark.
Especially when it comes to your financial wellbeing, it’s essential to understand the things that we can’t control (like X Y Z risks) and set up a portfolio that mitigates this risk. We can then use the extra time, energy and money focusing on things that are in our control, like saving or spending…or going to a baseball game.