Your Investments: Pessah cleaning - Look what I found

While we are knee deep in cleaning solutions trying to get rid of chametz, sometimes we are in for a pleasant surprise.

By AARON KATSMAN
Tel Aviv brokers (photo credit: REUTERS)
Tel Aviv brokers
(photo credit: REUTERS)
As the holiday of Pessah is quickly approaching, cleaning preparations are in full force. While we are knee deep in cleaning solutions trying to get that little, elusive piece of chametz, we are often in for a pleasant surprise. In our home we usually end up finding loose change that adds up to tens of shekels. The other day I actually found a CD of a video that I starred in along with a herd of cows! But that’s for another column.
Last week I received three calls, each one telling me how when they were cleaning for Pessah, they were going through some drawers and they found some kind of investment account statement, detailing the value of an account that they had long since forgotten about.
After some questions, it turns out that each caller had moved to Israel over the past few years and they had what they thought was a small amount of money in an account in the old country, and they just decided to leave it and eventually they forgot about it.
Get on the program
There is a common perception that one needs to have a lot of money to work with a financial adviser. People often tell me they just assume financial advisers only work with clients who have hundreds of thousands of dollars, and that their $25,000 to $50,000 just isn’t enough to bother with.
While there maybe some advisers who specialize in high-net-worth clients, many advisers work with smaller accounts. It’s important to make a few calls and find an adviser who can help you out in your situation. The potential loss of not taking care of your investments over the long term can be staggering. You can literally be talking about leaving tens of thousands of dollars on the table because of the inaction.
Don’t think that just because you have $50,000 no one will talk to you.
It’s simply not true.
Make ‘Seder’
Everyone needs to start somewhere.
Your $50,000 isn’t going to double or triple magically. You need to create a financial plan and start understanding what your short- and long-term needs and goals are. You can speak to a financial adviser to help you define those goals and needs.
Incidentally, many advisers who specialize in high-net-worth clients also have financial-planning consulting businesses as well, where they may charge an hourly fee to help you create a plan. When creating the long-term plan with your adviser, it’s important to also take into account future expenses.
For example, the purchase of a car in five years, marrying off children in eight, 10 and 12 years is all relevant information necessary for the adviser to give you an accurate picture of what you need to do for you to be able to meet these future expenses.
Start building wealth Many individuals feel they need not even bother to start saving while living in Israel because conventional wisdom says that it’s a waste of time. I beg to differ. Let’s say you have $25,000 to $50,000 and in addition you have children.
If you are an American citizen, it’s very important to apply for the child tax credit. In this scenario you could be the recipient of thousands of dollars each year.
I like to encourage investors to take that child tax credit and invest it every year. A few thousands dollars every year may not seem like the way to grow your wealth, but taken with your starting sum, investing a few thousand dollars every year for 10 to 15 years will leave you potentially with a couple hundred thousand dollars.
Happy cleaning and hag kasher v’somayach.
aaron@lighthousecapital.co.il
Aaron Katsman is a licensed financial adviser in Israel and the United States who helps people with US investment accounts.