When is it time to hit the financial reset button?.
(photo credit: REUTERS)
'Men do not learn much from the lessons of history and that is the most important of all the lessons of history.” – Aldous Huxley In a quest to save 130 shekels on my way home from the airport at 4 a.m. earlier this week, I decided to take the Nesher van service.
As most of you who have chosen this mode of airport transportation know, you get what you pay for. After being assured that most of the other passengers live near me in the center of Jerusalem, I happily entered the van and, of course, the only seats left were in the back, the bench that has room for 3 people but actually has 4 seats.
As soon as we started the drive to the capital, the driver started complaining that he has a crazy route that will take him all over the city. A few of us started to complain that we were independently assured the passengers lived in close proximity to each other. He started screaming at us denying he ever said such a thing.
After verbally accosting most passenger’s for something petty, it was my turn to be in the line of fire. A tourist who came to stay with his daughter gave the name of the street she lived on and the driver never heard of it. He then decided that he was just going to continue his route and drop the tourist off in front of Binyanei Hauma.
I protested and said he couldn’t do that, and boy, did I get an earful. He then actually tried to prohibit the other passengers from talking to me. Anyway, I then put on Waze and told the driver exactly how to get to the desired destination, which was a 25-minute walk from Binyanei Hauma. He begrudgingly dropped off the passenger, but didn’t stop yelling at me until he dropped me off.
This story struck me as a life lesson. Why on Earth would I get upset? After all, I know darn well that “Nesher” is not the classic example of a superior customer service experience. I chose to save some money and that was the cost.
But the driver could have easily rectified the situation from the get-go. A few pleasantries and an apology and all would have been well. But he chose to keep piling on. How many times in life do we continue doing something that we know will fail, because we are unable to admit failure and move on? WHETHER WITH relationships, driving or a thousand other examples, most of us have a hard time stopping the destructive habit and starting fresh.
In fact, it’s those who can successfully change their character who are able to grow as individuals.
Have you ever watched a child playing a video game get off to a bad start and just hit exit and start a new game? Believe or not, you can do the same thing in life: Get off the path of destructive behavior and get back to basics.
When it comes to finances, the inability to correct missteps can be quite costly. Too often I see people get stuck in a rut and continue making poor money decisions, intellectually aware of the harm they are doing to themselves but emotionally unable to make a break.
Then there are those who come in complaining they have made no money in the last five years on their investments. When they show me their investments, the money is just sitting in cash or in some hodgepodge of assets where there is no rhyme or reason to anything in the portfolio.
If your financial situation is derailed, remember the child and her video game. Hit exit and start again. Get back to the ABCs of personal finance.
Start by understanding how much income you have coming in every month. Then figure out how much you are currently spending. If it’s more than you earn, you need to cut. It’s imperative that you live within your means. You will not spend your way to prosperity.
Then sit down with a pen and paper and figure out your goals, both short- and long-term. Your portfolio should serve as a conduit to enable you to achieve your goals. Your investments should be allocated in a way that will help get you where you want to be financially.
Not all portfolios should be constructed the same way. If you are retired and your portfolio is all that you have, your investment allocation should look different than if you are 35 years old and your sole goal is to save for the next 30 years.
Be honest with yourself. And if change is needed, don’t repeat the same mistakes that got you into your current situation. Hit the reset button and get back on track financially.
This article does not necessarily reflect the opinion of Portfolio Resources Group, Inc., member FINRA, SIPC, MSRB, FSI, or its affiliates. The writer is the author of ‘Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing’ (McGraw-Hill) and is licensed in the US and Israel. For more information, call 02-624-0995, visit www.gpsinvestor.com or www.prginc.net or email firstname.lastname@example.org.