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Friday, August 23, 2019

If you’re going to read this article, do yourself a favor: Put your smartphone in another room. And turn it off (or at least change the settings to “silent/no vibrate” so you can’t hear that you’ve received another message, alert, or update).

Don’t have time to do it right now? Then wait until later. But remove the device from your presence.

Then, take a few minutes to read and reflect—without distractions.

The Value of a Retreat

The Latin root of the word “retreat” is “to pull back.” Since the beginning of recorded history, people have touted the benefits of voluntary retreats as a way to set aside daily distractions, see the big picture, explore new ideas, gain greater understanding and chart a better path for the future. Retreats can be personal, like walking the Appalachian Trail, or group affairs, like corporate team-building exercises. But in every instance, the idea of a retreat is to remove distractions in order to gain insight and inspiration.

In our personal finances, many of us have a lot of distractions. It’s not just the incessant advertisements urging us to spend more for the latest product or experience. Even with financial matters, we encounter myriad distractions.

It used to be that the greatest challenge for households was the scarcity of accurate financial information upon which to make intelligent decisions. Today, the opposite is true: There is so much information we can’t focus on what’s important. “We are drowning in data,” said Shlomo Benartzi, a behavioral economist from UCLA. “What we lack is the ability to properly process it. The price we pay for that may be subtle, but it’s hardly insignificant. When it comes to our money, effective decision-making typically requires information, concentration and reflection.” In other words, many of us would benefit from a retreat, where we can pull back from the white noise of too much information.

And, as much as it has become a constant companion, a smartphone shouldn’t be a part of your retreat. Benartzi warned: “The evidence is mounting that if we make financial decisions on our mobile device—or within earshot of our mobile device—the decisions could be very bad ones.”

Device Distraction Affects Financial Intelligence

In a recent study, people who took a financial literacy test on a mobile device scored lower than those who took the same test on paper. A likely explanation: a tendency to think and read faster (and less carefully) on smartphones, because of the necessity of scrolling down the screen for more stimulation. A smartphone isn’t the best device for processing complex information.

But it isn’t just the need to scroll that impairs comprehension. By their very presence in our lives, smartphones are distracting. Per Benartzi:

“According to research, subjects with a phone nearby perform significantly worse on measures of attention, working memory and fluid intelligence than those whose phones were in another room. The researchers speculate that the effect exists because the mere proximity of a smartphone causes us to monitor it—we’re waiting for those alerts and interruptions—and that monitoring takes up additional resources.

That’s an academic way of saying we’re becoming addicted to our devices. A 2018 consumer survey by Deloitte Global Mobile found that:

Individuals check their mobile phones 47 times per day. Allowing for eight hours of sleep, that’s roughly three times every waking hour. (To which a Millennial responds: “only three times an hour? Slackers!”)

89 percent of respondents said they checked their phone the first thing in the morning. (No word on whether this was before or after using the bathroom.)

81 percent said they checked it within an hour of going to bed. (Yeah, we know screen light affects sleep, but hey, we have friends and followers!)

89 percent said they’re on their smartphone while watching TV (because two distractions are better than one!).

You could easily dismiss these cautions about the addictive nature of devices, and their effect on learning and decision-making. And then you might read (perhaps on your digital device), the following in the October, 26, 2018, “New York Times:”

“The digital gap between rich and poor kids is not what we expected. America’s public schools are still promoting devices with screens—even offering digital-only preschools. The rich are banning screens from class altogether.”

Let that comment sink in: The rich are banning screens from class altogether.

The article notes that “No-screens households are now becoming a thing in Silicon Valley to such an extent, that nannies are often forced to sign contracts that agree they will not use any screens, including their own phones, around kids when it’s not explicitly authorized by the parents that employ them.”

Pulling Back, Gaining Insight

You’re not a kid, and no one is saying you need to get rid of your mobile devices, or that you have a digital addiction. But when was the last time you had an in-depth, distraction-free discussion with a financial professional about taxes, saving allocations, life insurance, estate plans or your various financial aspirations?

These can be complex topics, and assessing which strategies might best fit your circumstances is a tough task when time is limited, and you are distracted. If you could block out an afternoon—maybe even a day—to really dig into your financial condition, you might be surprised at what could change for the better.

2018-69502 Exp. 11/20

This article was prepared by an independent third party. Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 355 Lexington Avenue, 9 Fl., New York, NY 10017, 212-541-8800. Securities products and advisory services offered through PAS, member FINRA, SIPC. This firm is an agency of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. Wealth Advisory Group LLC is not an affiliate or subsidiary of PAS or Guardian. Wealth Advisory Group LLC is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. Neither Guardian, PAS, Wealth Advisory Group, their affiliates/subsidiaries, nor their representatives render tax or legal advice. Please consult your own independent CPA/accountant/tax adviser and/or your attorney for advice concerning your particular circumstances

Submitted by Elozor Preil