Your Investments: Back to school and your money

'If you want your child to get the best education possible, it is actually more important to get him assigned to a great teacher than to a great school.' -Bill Gates

By AARON KATSMAN
September 12, 2019 21:52
3 minute read.
PICO Kids offerings in Jerusalem: An afternoon programming workshop...

PICO Kids offerings in Jerusalem: An afternoon programming workshop.. (photo credit: PICO KIDS)

Sometimes I lose sight of the fact that kids are kids and that they should act like kids. For some reason I had high hopes that this back to school season will be different and my children will turn into perfect students. They will get to school on time, do their homework without being asked more times than they are asked to clean their rooms, and that they will put down their assorted electronic devices in their quest for academic excellence.

Why did I have hopes? Because with some of the older kids, I held short talks and we spoke how this year will be different. That they are moving up into the big leagues now and that school will be harder. I was very happy when they told me that they are going to try harder and understand their new situation and are ready to meet the challenge!

To their credit, the positive change actually took place and lasted one full week. Then began the “Abba can you drive me to school because I missed the bus,” waking up late, and delaying homework because “it’s really only due in a week.”

That’s when I started thinking. Kids are no different than adults are, and as such, why should I have raised expectations for them? We are fast approaching Rosh Hashana and many of us will make resolutions to improve ourselves in a certain way over the upcoming year. Funny isn’t it that, just like our children, we will be lucky to last a week or two before most of us revert to the ways we have been acting all these years. What does this mean? That changing behavior is no easy task. We are creatures of habit, and trying to change that is like going against nature.

When it comes to our money, the situation is no different. How many people say that they are going to start budgeting and save on a disciplined ongoing basis? How many actually succeed? Not so many. But don’t fret. I like to view changing financial habits as two steps forward and one step back. By starting the process, a certain awareness is created and that awareness is vital. It may be that for a month or two, you steadfastly are able to stick to a budget; but in month three, you are hit with a few unexpected expenses which cause you to blow through your budget. The fact that you achieved some small successes initially stay with you and help you get back on track in month four.

The same goes with investing. Too often I see investors make the cardinal sin of selling after a market drop instead of staying the course. Earlier this week I was sitting with a client and reviewing their account. He was aware that 2018 was a bad year, and was actually happy that he was a few percent ahead of where he had started 2018, more than a year and a half ago. He told me that, “that’s investing. I had a good run over the last few years and we had one bad year. Nu. It happens. But you see, we have already made up the loss of last year and then some.” How correct he was, and may I add how surprised and thrilled I was to hear him say that!

Investors really need understanding that hitting the panic button is a surefire way not to grow wealth. It’s certainly no fun to lose money, but if you keep a long-term perspective, you learn that markets go up and they can also drop. Always remember that time is your ally, and that over the long-term, stock market investing has shown to be a very powerful approach to wealth building.

Whether it’s improving academically, trying to perfect character traits, or trying to have a secure financial future, don’t get frustrated if you hit some bumps in the road. Remember: two steps forward, one step back.

The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.

Aaron Katsman is the author of ‘Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing,’ and is a licensed financial professional in the US and Israel. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995, visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.


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