Are you Financially Paralyzed by “Uncertainty”

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What Should I Do with My Next Moment? Part II

Imagine a 65-year-old man walking into his favorite restaurant for his first cup of coffee since he retired. As he sits at a table with his buddies, he’s asked, “What are you going to do to invest your money now that you’re retired?” The fresh retiree pauses for a moment and then replies, “Well, I’m really afraid to do anything. There just seems to be so much uncertainty in the world today.” Have you heard that same phrase lately? “There’s so much uncertainty today.” Have you said that phrase yourself? Does your belief in today’s uncertainty have you paralyzed and unable to make financial decisions? In today’s money matters episode, I want to help unlock your paralysis. I want to encourage you to make decisions regarding your money in spite of uncertainty. I’m going to do that by highlighting some of the headlines that lead us to say that there is “so much uncertainty.” Then I’m going make the case that uncertainty is nothing new. Then I’ll share some tactics on making decisions in a world of uncertainty. Let’s start with headlines that are creating uncertainty. Tariffs would be right at the top, right? Will President Trump follow through with his tariff threats? Will other countries flinch first? Will tariffs be in effect for a long period of time? What about the war in Ukraine? Will a cease fire happen? Will the Europe step up their own support of Ukraine? Will the U.S. continue to provide funding? How about some market related questions: Will the stock market continue its recent trend of weakness? Will interest rates remain where they are? Will Bitcoin eclipse $100,000 again? The answer to all these questions is “we don’t know.” The answers to these questions are indeed “uncertain.” But uncertainty is nothing new. In 1941 it was uncertain if the Allies would win World War II. In 1987, it was uncertain if the stock market would rally quickly after being down 22% in a single day on Black Monday. In 1999, it was uncertain if all the computers in the world would stop working when the clock struck midnight on New Years Eve. In September of 2008, it was uncertain whether the world was going to hold together following the collapse of Lehman Brothers, AIG, and Fannie Mae/Freddie Mac. In March of 2020, a mere 5 years ago, it was uncertain as to whether Covid 19 would be the worst pandemic since the black plague. Life is always uncertain. Are there times when it is more uncertain than others? Maybe. But uncertainty is a given. So rather than letting uncertainty paralyze, I believe we can make confident financial decisions in the face of it. So now, here are some tactics: 1. Embrace the fact that you are a guesser. No one has a crystal ball. Some of us are educated guessers – but when it comes to knowing what the future will bring, we simply cannot predict it with a high degree of certainty. But we have to make guesses. Anytime a small business puts together a budget for the upcoming year, it is full of assumptions (this is a fancy word for guesses). We have to guess how much revenue will be generated and guess how much the cost will be for our product or service. They may be informed guesses based on years of experience, but they are still guesses. If you can admit this, it will keep you from staking too much on uncertain outcomes. 2. Focus on what is known rather than what is unknown. Even though the future is unknown, the past is not. There are several examples from the past that are known. There are several facts from today that are known. What it known doesn’t tell you exactly what decision you should make, but it’s a great starting point. Let’s say you are thinking about buying your first home. You don’t like where interest rates are today, so you are trying to decide whether to move forward, or whether to wait. Many people are just stuck on a decision like this. They don’t do anything because they don’t know the future. But that doesn’t have to be you. Let’s say you are looking at a 6.75% mortgage rate today. Can you afford a payment at that rate? If so, go ahead and buy a house. Because if you are speculating that you think interest rates will go down soon, you may find yourself having lost time and money. It’s true that rates could go down, but it’s a guess. Why not make your decision based on what you know today. If you can’t afford a house at today’s rates, then don’t buy a house. If you can, go ahead and buy. But don’t lose time and energy and even money hoping for a better rate environment that may or may not come. Here’s a simple equation: the more guesses or assumptions are involved in your decision, the riskier the decision. The more givens involved in your decision, the lower the risk involved in the decision. Once again, this doesn’t mean we don’t make assumptions. But it does mean that the more assumptions we make, the higher the probability is that things won’t go exactly as we think. 3. Diversify your guesses. Since we don’t know the future, consider making guesses that win in any environment. Play offense and defense simultaneously. If you only play offense, you’re taking lots of risks. But if you’re only playing defense, you might miss out on some great opportunities. Always ask yourself, “what if my assumptions don’t pan out?” Have a plan B. Even better, have a plan C. What happens if your guesses and hunches don’t pan out? Will it break you? Try to make a host of financial decisions so that something that you own is winning in every environment. 4. Don’t play Monday morning quarterback. It really is true that hindsight it 20/20. Don’t be critical of others or of yourself in retrospect. Should we go back and watch the game film of our decisions and how they panned out? Absolutely. We need to learn from past mistakes and past oversights. But we can’t rake ourselves or others over the coals for making decisions that were based on the uncertainty of the future. I’ll give you a personal example. My family and I love to watch the Vols play. We found out that the SEC tournament in Nashville was happening over our Spring Break. So, I jumped online as soon as tickets were available and bought tickets, securing them while I could. The day of the game, I jumped on to see how much the tickets were. They were about half what I paid for them a week prior. I was tempted to kick myself and say, “Why didn’t I wait longer before buying tickets?” But then I had to remind myself that prices could have gone the other way. They could have been even more expensive. So rather the speculate on what the price of tickets would do, I looked at the ticket prices the day they opened, asked myself if I could live with those prices, and went ahead and pulled the trigger. Sometimes we’ll get it right and sometimes we’ll get it wrong. Look forward to the next decision and don’t spend useless energy try to change past ones. At Foundation Bank and McKenzie Banking Company, we love helping people make financial decisions. We can help you with objective perspective that outlines the pros and cons of what we know today. We do more than offer financial products, we offer financial solutions. If you’ve been meaning to start or deepen a relationship with us, start your financial conversation today by visiting Foundationbank.org. We also hope you’ll subscribe to this podcast to it in your favorite podcast app and share it on social media. Until our next episode, God bless you.

-President Chad P. Wilson, CFP

Today’s episode of “Money Matters” was written and recorded by President Chad P. Wilson of Foundation Bank/McKenzie Banking Company on March 25, 2025. This episode does not constitute financial advice. Please consult a financial professional to discuss your specific needs. Any rates mentioned are subject to change and are accurate as of the recording date. Foundation Bank/MBC is an Equal Housing Lender, Member FDIC.