The mathematics of personal finance are not only hard to get your head around, their damn near scary when

The mathematics of personal finance are not only hard to get your head around, their damn near scary when you're faced with the conundrum of which set of factors to consider.

I'm not going to attempt to write a treatise on the nuances of Monte Carlo simulation or security coefficients, I'm going to keep this blog post short and to the point.

The conversation has begun anew in the circles of academia and personal financial professional journals that confirms what we've known all along: what you spend likely has more to do with your success than you think.

Tied inexorably to that last statement is the other focus of a lot of press, the return projections for the markets are a full 3% under historical norms taken by most standards, including and perhaps most importantly, those of individual investors.

So there you have it. Put these two comments into a shaker, give it a go and when you pour it out what you get is a recipe for people spending more than they should on the premise that they'll earn more than they will. And so the spiral of having less the next time continues.

Is it manageable, this spend/return equation? It is, but not all at one shot it's not. As the world changes and as returns change, so to must the math. The math is long and complicated and what's harder is that there are more than a few subjective inputs that go into constructing the framework. (Note: You shouldn't be developing the subjective framework, though clearly you should have input into it's components and it's design.)

This is where we make the case for Wealth Manager as guide, not map maker. Most consumers when considering the use of professional wealth managers default to the fact that no one can be all seeing and all knowing so why pay for advice that can't stand up over the test of time? The fact is; when was someone doing something about a problem ever better than someone doing nothing about it?

The reason that wealth management is both art and science is because an "exact science" it is not. But like any good guide, you start from the premise that you can get to the destination in any number of ways, the question is; which one will be most efficient given the details as they play out.

Were it for the math alone, personal finance would be hard. The fact that the math changes as much as it does makes it even more difficult.

All things being equal; when you contemplate your future don't lose sight of the fact that you make many contributions to the math, but perhaps the most important one is by deciding what to spend and why. While it's only one variable in a very long equation, it just might prove to be the most powerful one of all. And unlike the markets, you control it.