Your investments: Get off the path of destructive behavior and get back to fundamental basics.
By AARON KATSMANA businessperson working at his computer (Illustrative)(photo credit: PIXNIO)I think that with a lot of hard work and dedication, I feel that I could be the best in the world. I’m still only 35 years old... I have a fresh start physically and mentally, and I feel that I can achieve my goal to be the best again. –Mario LemieuxOne of the few perks of the two-month long coronavirus lockdown is spending more time with my kids. While family time is worthwhile, it can also be a bit dangerous. They will stake claim to a couch, and lie there on their backs playing games on their phones and tablets. If you also want to enjoy sitting in our living room, be prepared for a fight. It’s not a given that someone will get up and move to make room for another sitter.My advantage being much bigger, heavier and stronger than my child combatants is that I can just pull them off and make room for myself. While their remote learning has been a disaster, at least they have learned a basic economic principle – the law of supply and demand. We have two couches and one recliner – and we are seven people. Which means a seat on the couch is as valuable as Boardwalk and Park Place on the Monopoly board! What I have noticed as they are sprawled out playing their games is that times have not changed.When I was a teenager, I had this handheld basketball game I used to play. You had to score as many points in 24 seconds as possible. I was excellent at this game. But I also knew after about two seconds if it was going to be a good game or not, and if not, I would quit and start over. Now I see my kids doing the same thing. If the game doesn’t go well, they exit and start again.New gameBelieve or not, you can do the same thing in life. I know quite a few people who, due to being furloughed at work, have been trying to re-invent themselves professionally. Now is the time to use the coronavirus crisis to start over financially as well.Writing about the need to get back on track financially, Kara Fleck of The Art of Simple relates a story that we can all relate to. “It is 90 degrees inside my house. I’m nursing the baby and we’re both drenched in sweat. Two of my children are sick and sad with the chickenpox, tossing and turning on the small mattress we’ve set in front of the window for them to sleep on. They are uncomfortable from the heat and the itch. The air conditioning is broken, we don’t have enough money to cover the cost of the repairs, and we are just one more disaster away from the breaking point. My whole family is sad, tired, and miserable. We needed a financial fresh start and we needed it now. And, the only way to make that happen was to give it to ourselves; no one was going to come along and rescue us or bail us out. We had made this mess and we needed to get ourselves out of it.”Get off the path of destructive behavior and get back to fundamental 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.Video gameIf your financial situation is derailed, remember the child and her video game. Hit exit and start again. Get back to the ABC’s of personal finance. The first thing I would do is to remember that you are a team. Don’t start with the blame game. You are starting fresh. Then figure out 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. Invest. If you haven’t now is the time to start. If you have a portfolio, it 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 re-set button and get back on track financially.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.The writer 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 US and Israel, and helps people who open investment accounts in the US. 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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