Your Investments: Yom Kippur: Confessing financial sins
Understanding our short-comings is just step one to self-improvement.
By AARON KATSMANAn electronic board displaying market data is seen at the entrance of the Tel Aviv Stock Exchange, in Tel Aviv, Israel January 29, 2017(photo credit: BAZ RATNER/REUTERS)
Gandhi once said, “Confession of errors is like a broom which sweeps away the dirt and leaves the surface brighter and clearer. I feel stronger for confession.”With just a few days left before Yom Kippur, we are preoccupied with seeking forgiveness for this past year’s sins, as well as planning to improve ourselves in the upcoming year. Being a better spouse, having more patience with children, trying to be more ethical in business dealings, and visiting the sick are just some of the goals that we set for ourselves to become better individuals. We focus our self-improvement – not just on what we can do better in the upcoming year, but also by looking back and understanding where we fell short of our goals.Understanding our short-comings is just step one to self-improvement. We need to actually confess what we did wrong. This confession alerts us to what we did wrong and is a big help in preventing missteps in the future. In today’s fast-paced, remote control culture, taking time out to reflect on the past and thoughtfully plan for the future may not be trendy, but it’s the only way to truly improve.Yom Kippur is a day that we “get back to basics” – no fancy clothes, no one trying to impress his friend, just a focus on repenting for past sins and trying to create a game plan to prevent future ones.Explaining the custom to wear only white, Rabbi Berel Wein wrote, “The white garments are also a reminder of the costume of the High Priest worn on Yom Kippur during most of the Yom Kippur service in the Holy Temple in Jerusalem. The main service was conducted then and there with the High Priest wearing the four white garments – shirt, pants, belt and hat – without the four gold garments – the long coat, the breastplate, the head plate and the apron – that he ordinarily wore in performing his Temple duties. The gold garments are not worn on this day of asking forgiveness because they represent hubris, human majesty and are a potential reminder of the sin of the Golden Calf.Yom Kippur is a day of humility and a low and private profile. Fancy garments, especially gold garments, are really out of place and contrary to the prevailing spirit of this holy day.”I think that we can take this lesson and apply it to our financial life as well. After all Yom Kippur is not just a day focused on the spiritual. As illustrated in the High Priest’s prayer upon finishing the service, physical needs should be evaluated as well. Now is a perfect time to use many of these same principles to get our finances in order as well. Don’t think that reviewing the past is for spiritual improvement only. Taking the time to review your investment “sins” of the last year and atone for them is a surefire way to get yourself back on the path to financial stability.The need to understandWarren Buffett has preached that one of the biggest mistakes investors make is that they have no understanding of what they are investing in. Whether it’s a real estate project in Colorado (where it looks like the Israeli investors lost everything) or the stock of a company that develops drones, if you have no understanding of what you are investing in, don’t invest.AdvertisementBe patientI write all the time about the power of a slow-and-steady approach to wealth building. Whether running a marathon or progressing in a career, slow and steady usually wins. But when it comes to building long-term wealth, for some reason this approach is forgotten. So many investors try and hit a home run with each investment, but unfortunately they often end up striking out. A slow, disciplined approach has been shown over and over to be the best way to grow net-worth. Writing for Investopedia, William Artzberger says, “Expecting our portfolios to do something other than what they’re designed to do is a recipe for disaster. This means you need to keep your expectations realistic in regard to the length, time and growth that each stock will encounter.”No goalsInvestors need to look forward as well. You need to define your goals. Whether you invest to fund your retirement, to pay for children’s’ weddings, to leave an inheritance for the next generation or a combination of these, understand your goals and invest accordingly. If you need your money in a year or two to pay for a wedding, you may have to accept getting a small, guaranteed return on your investment as opposed to trying to beat the stock market. If you understand your goals and you invest with an eye on meeting them, your chances of success will be much greater.Aaron Katsman is an author and a licensed financial professional. aaron@lighthousecapital.co.il.
