Because we don’t have same level of prophecy of Joseph, we need to be extra careful to plan for bad economic times. We can do so in two distinct ways.
By AARON KATSMANCalculating taxes(photo credit: INGIMAGE)
As a general thing, I have not ‘duped the world’ nor attempted to do so... I have generally given people the worth of their money, twice told. P. T. BarnumEvery year when we get to this week’s Torah portion of Vayigash, I become frustrated that almost all the focus is on Yosef’s meeting with his brother’s and reunion with his father, Yaakov. Almost lost in the portion is what to me is much more fascinating; Yosef’s plan to save Egypt from famine.“And let them collect all the food of these coming good years, and let them gather the grain under Pharaoh’s hand, food in the cities, and keep it. Thus the food will remain as a reserve for the land for the seven years of famine which will be in the land of Egypt, so that the land will not be destroyed by the famine.” Genesis 41:35-36For those who are also interested I found a great analysis, online, of his economic plan written by Rabbi Yaakov Medan, co-head of Yeshivat Har Etzion, titled “The years of famine in Egypt.” Was his plan appropriate, after all the Egyptians managed to make it through the famine but they did so by becoming slaves?Maybe Yosef was an example of how every employee should perform his job, doing what he needed to do in the best interest of his employer, Pharaoh, and nothing else really concerned him? The Ramban has an interesting approach, and writes, “And Yosef gathered up all the money” — The Torah relates all of this in order to inform us of Yosef’s qualities of wisdom, understanding and intelligence, and that he was a trustworthy man who brought all of the money to the house of Pharaoh, and did not establish for himself hidden treasures of money in the land of Egypt or send money to the land of Canaan. Rather he handed over all of the money to the king who trusted him, and bought for him the land and even bodies.”Would a market based approach have been more successful and kept the Egyptians free? Was his approach market based or our first foray into communism? That’s all for another column. What I do want to focus on is his approach to saving. After all Josephs plan was not to get carried away with the ‘go-go’ seven years of plenty. To the contrary, he was the ultimate example of saving for a rainy day.Straight to duty-freeWe would all benefit learning from how Yosef approached the seven bountiful years. How many of us put away money when times are good in order to fund those economic challenging times that we come up against? When you get a bonus from work do you go ahead and spend it all on vacations, home improvement or buying a car? Unfortunately I see time after time people blow through newfound money faster than it took them to get it in the first place. A few years ago, I wrote about a call I received from someone that in the past I had tried to help get out of debt. I hadn’t heard from him in two or three years. He filled me in that he stopped contacting me because his mother gave him a gift of more than two million NIS, and he spent it all on a home. Didn’t pay off debt, didn’t put any money in savings, put it all in an apartment. Why did he call? Because it was just prior to Passover and he had zero money, and couldn’t afford to buy wine and matzah.While this may be extreme, I could write a book on all the stories I know that are similar in principle.You’re no prophetBecause we don’t have same level of prophecy of Joseph, we need to be extra careful to plan for bad economic times. We can do so in two distinct ways:1- Emergency fund. I know that I sound like a broken record but when you need a crown on a tooth, or some new tires, having that money available is a big help. Try and keep 3-to-6 months of expenses in the fund and keep it liquid. The point of this money is not to make you a millionaire; it’s to have a chunk of cash readily available in case of emergency.2- Long-term investing. Start thinking long-term. The earlier you start investing for the long-term the more secure a retirement you will have. You can get your money working for you and with a long time horizon you may be able to grow the money significantly.Let’s learn from Joseph the importance for long-term saving. Put money away and you will be able to survive those lean years and still have enough left for a comfortable retirement.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 author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and 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. (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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