Your Investments: Get your finances together

I can’t tell you how many old-time olim I have met who neglected their finances and are now paying the price.

Alya 311 (photo credit: Sasson Tiram)
Alya 311
(photo credit: Sasson Tiram)
Another successful summer of North American aliya came to a close this week, as the “Jewish Jordan” Jon Scheyer moved to Israel to play for Macabbi Tel Aviv’s basketball team. Scheyer’s high-profile aliya was the icing on the cake for 2011. This summer saw over 2500 olim brought in by Nefesh B’Nefesh (NBN), a huge accomplishment.
I want to personally wish all of you freshly minted olim a big “Mazel Tov,” and wish you success in your new lives in the Holy Land. I am sure that with all the support you will get from NBN, the Jewish Agency and the Absorption Ministry, your acclimation process will be as smooth as silk.
Now to reality. Shortly the “high” of your aliya will begin to wane and you will need to face the new realities of your life here in Israel. While most of your focus will be to get yourselves settled socially, it’s important not to neglect the financial aspect of your aliya. I can’t tell you how many old-time olim I have met who neglected their finances and are now paying the price. Here are a few tips that will make your financial aliya a bit easier.
Keep Your IRA Current
One of the most common issues I see when I meet with prospective clients is that they haven’t looked at their IRAs (Individual Retirement Account) in years. The thought process is usually that since this money is for retirement, there is no sense in doing anything about it now anyway and there are more pressing issues at hand. Finding a place to live, getting your children adjusted to their new surroundings and school are more urgent issues which need to be attended to. I am not arguing with that. It’s just that I find that when it comes to both retirement accounts and investments abroad in general, inertia tends to kick in. Olim tend to forget about these accounts altogether, only to wake up in a decade or so to realize that the value of their account is the same as it was pre-aliya.
While on a recent vacation in the Golan, I started up a conversation at breakfast with a fellow English speaker. After playing a bit of Jewish geography, he asked me what I do for a living. I told him that I am a financial advisor. He then proceeded to fill me in on his financial situation. (I guess it is customary to give free financial advice while filling up a plate with shakshuka!) He said that he made what he termed “Pre-NBN” aliya about 11 years ago. He came with a joint investment account worth a couple hundred thousand dollars, which he liquidated to buy an apartment. He then confided in me that the biggest mistake he made was with his IRAs. He had one worth about $75,000 and his wife had about $40,000. He said he basically left them alone and never made any changes. Well, 11 years later and they are still worth the same amount of money.
I can’t tell you how many times I have heard similar stories. If you have a long-term savings account and you never look at it, you are doing yourself a disservice.
Clean Slate
It may be tempting to hold out before implementing financial discipline; after all, you have no idea what to budget for in your new country. While this is technically true, there are so many resources available to help you prepare a basic, “in the ballpark” type of budget. Ask neighbors or friends who have made aliya in the last couple of years how much they spend on a monthly basis. Their responses may not be 100% relevant for you, but they should serve as a guide to help you get a handle on what you will need. Getting used to living within a framework is important. If you don’t get a handle on your expenses, you run the risk of blowing through a significant part of the savings that you came with.
By getting your financial eggs in order at the start of your aliya process, you may end up saving lots of aggravation from money lost later on down the road.
Good luck and welcome to Israel!
Aaron Katsman is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. a registered broker/dealer, Member FINRA, SIPC, MSRB, NFA, SIFMA.

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