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They say opposites attract.  Well, they were right when it comes to my husband and me.  I am a neat freak and he is a pack rat.  I love clean surfaces and being able to see everything when I look in a closet or cabinet.  He loves saying yes when anyone offers to give us anything.  Old sink – yes, we want it.  A third set of used speakers – send them our way.  Twenty place settings of holiday dishes when I do 90% of my cooking in the microwave – of course!  His collecting knows no bounds.  The old, warped fireplace mantle from his parent’s house has literally been sitting in our garage for 8 years.

The odds are that you know a pack rat, perhaps it’s even the person in the mirror.  For those of us without the tendency to accumulate, understanding why a person wants so much stuff can be downright maddening.  You might think things like “what possible use can you have for an 8-foot long warped piece of wood?!”  But to the person who craves to save, there are very legitimate reasons for keeping these things.  And as it turns out, many of the reasons a person is inclined to keep certain possessions are the same reasons we develop attachments to certain investments.

We can debate the cost of holding on to possessions we’re unlikely to ever use.  I would argue that there is a cost to the space, both physical and mental, that these items take up.  They require an investment of time to keep them maintained or organized and there is some opportunity cost to keeping items you could donate or sell.  Perhaps the greatest cost to keeping things we don’t need is that it prevents us from moving forward.  Looking over at the treadmill you bought isn’t going to make you use it and telling yourself you will is probably keeping you from finding a fitness activity you might enjoy more.  Time to LetGo.

Holding on to legacy investments can have an even higher cost.  In most cases, attachment to an investment leads to increased risk in our portfolios.  Whether it’s large quantities of company stock or stockpiles of cash and CD’s, we’ve often come to own these investments because we believe that they are safer than the alternatives.  We’re familiar with the company, our parents lived on the income from CD’s, we’ve learned not to trust the stock market.  We’ve seen these investments work well in the past, so why not stick with them? Even if maintaining significant assets in any one stock, no matter how ‘safe’, leaves you overexposed to the fate of one business or if cash or CD’s might not grow enough to keep up with the ever-increasing costs of goods and services, these risks seem minimal as compared to all the risks of the options we’ve never tried.

The perceived risk of change is just one of the reasons we’re wont to favor the status quo.  Emotional attachment, feelings of loyalty and respect and fear of regret all contribute to the so-called status quo bias.  It’s very common for people to have emotional associations with their physical and fiscal possessions.   Just as we might keep grandpa’s fishing rod, we also hang on to the stock he left us.

I’ve seen first-hand how investments can take on emotional value.  My step-mom and her father used to talk all the time about her Apple stock.  He would call her on the phone and before even saying hello, he would tell her how much the stock price had changed.  This routine was something special that the two of them shared.  The stock became something more than just an investment; it took on emotional significance as a symbol of their relationship.  Now that her father has passed, her decision to keep the stock isn’t one based purely on maximizing return or minimizing risk.  It’s more about preserving a piece of the past, a piece of him or even a piece of herself.

Even when we might feel comfortable parting with an investment, we can worry about what selling it means.  It can feel disloyal or disrespectful to move away from the status quo.  “How can I sell the company stock after all they did for me?” “How can I say I know better than dad how this money should be invested?”  “And what happens if I do make a change and it turns out poorly?”

The fear of regret, the fear that we’ll wish we’d just left everything the way it was, is a powerful motivator against change.  Even once we make a change, it’s easy to benchmark against what we gave up.  If we sell Apple stock in exchange for a diversified portfolio and then Apple surges in prices, we’re likely to kick ourselves.  But we don’t do this when the shoe is on the other foot.  If we keep our Apple stock, we just keep watching Apple.  We don’t compare it to the diversified portfolio we passed up.

With both the possessions and the investments that we keep, we must find a balance between honoring the past and living in the present.  Do we have to keep everything we owned as a child to maintain those memories? No.  Might you keep something with extraordinary sentimental value, even if it’s an old, warped fireplace mantle? (Begrudgingly) yes.  Should we keep investing the way we always have because it feels easier? No.  Can we keep a considered portion of our investments in things that are worth more to us than just the fair market value? Yes.

When it comes to deciding which parts of your past belong in your future, there’s no time like the present.