I got some negative feedback as to the well-done nature of the meat I barbecued on Independence Day. I accepted the criticism and moved on. We had just bought a new grill, and it takes a bit of getting used to. Hopefully, the next BBQ will be up to par and will have learned from my mistakes.
In this week’s Torah portion, we read about the High Priest’s confessional on Yom Kippur. On the subject of Yom Kippur, Rabbi Jonathan Sacks wrote the following:
“Some years ago, I was visited by the then-American ambassador to the Court of St James, Philip Lader. He told me of a fascinating project he and his wife had initiated in 1981.
“They had come to realize that many of their contemporaries would find themselves in positions of influence and power in the not-too-distant future. He thought it would be useful and creative if they were to come together for a study retreat every so often, to share ideas, listen to experts, and form friendships, thinking through collectively the challenges they would face in the coming years.
“So they created what they called Renaissance Weekends. They still happen.”
Sacks continued, “The most interesting thing he told me was that they discovered that the participants, all exceptionally gifted people, found one thing particularly difficult, namely, admitting that they made mistakes. The Laders understood that this was something important they had to learn.
“Leaders, above all, should be capable of acknowledging when and how they had erred, and how to put it right. They came up with a brilliant idea. They set aside a session at each weekend [retreat] for a talk given by a recognized star in some field, on the subject of ‘My biggest blooper.’”
As an Englishman, Sacks had to ask for a translation.
“I discovered that a blooper is an embarrassing mistake. A gaffe. A faux pas. A bungle. A boo-boo. A fashla. A balagan. Something you shouldn’t have done and are ashamed to admit you did.
“This, in essence, is what Yom Kippur is in Judaism. In Tabernacle and Temple times, it was the day when the holiest man in Israel, the High Priest, made atonement, first for his own sins, then for the sins of his ‘house,’ then for the sins of all Israel.”
Everyone makes mistakes; the goal is to learn from them
IT’S THE same with managing your finances. Everyone makes mistakes; the goal should be to learn from them and try not to repeat them again and again.
Libby Boehne of Abacus Wealth Partners wrote, “The first step to transforming your relationship with money is acknowledging the mistakes you’ve made, particularly the ones that continue to negatively influence how you feel about yourself and your financial situation.
“Carrying feelings of guilt and shame can be like dragging a giant weight through your life. Releasing them can create space for you to understand that mistakes are part of life, and you’re not alone in navigating these sorts of complications.
“Everyone makes financial mistakes at some point in their lives; there’s just no avoiding it. Even people who appear to be ‘financially successful’ have inevitably misstepped in their past.”
Too often, I meet investors who are repeat mistake offenders. In order to have a successful and secure financial retirement, it’s imperative to learn from mistakes.
Common missteps that can impact one's retirement
HERE ARE a few common missteps that, if corrected, can have an immensely positive impact on one’s retirement.
Recently, I sat with someone who was planning on retiring in two years’ time. She had a huge mess on her hands, with multiple US bank and brokerage accounts. Since she worked in hi-tech in Israel and made the rounds from failed start-up to failed start-up, she had several separate Israeli pension and Keren Hishtalmut accounts.
She told me she was thinking of opening up another account, not in order to consolidate everything, but because she heard that she should have multiple bank accounts for safety.
I explained that since she already had multiple accounts, she needed to go the other direction and consolidate.
It’s very difficult to plan for retirement when you have no clue what you own. Not only does having so many accounts make it complicated to get a full financial picture, it can also create havoc when the retiree grows older and may not be able to stay in control of the accounts – or worse, can come to forget that they even exist. Consolidate your accounts now.
Keeping too much money in cash
ANOTHER MISTAKE I see regularly is keeping too much money in cash. It goes without saying that an important part of any financial plan is to put aside between three and six months of expenses, totally liquid, and keep the money in an emergency fund.
The problem is that I often see investors keep a lot more than even two years of expected expenses in cash. They say that they think the market is high and are waiting for a drop before investing. They just keep waiting and waiting.
As retirees age, they don’t usually add someone to the account to execute changes on their behalf. I advise retirees to give a child or a trusted confidant trading authority. This way, if the client can’t fully supervise the account, it doesn’t become frozen.
More than once, I have seen cases in which older clients had individual accounts, and when they took ill, they were unable to execute any instructions in their accounts.
This is the time when access to money is extremely crucial, and since the individual is the only one with any authority over the account, the money becomes as good as frozen.
We all make mistakes. Once is enough. Avoid repeating them so that you can have a secure financial future.
The information contained in this article reflects the opinion of the writer and not necessarily of Portfolio Resources Group, Inc. or its affiliates.
aaron@lighthousecapital.co.il
The writer is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing.