A sweet financial new year through reflection – opinion

If kids are back at school, it’s a tell-tale sign that Rosh Hashanah is right around the corner.

Calculating taxes (photo credit: INGIMAGE)
Calculating taxes
(photo credit: INGIMAGE)
Part of every misery is, so to speak, the misery’s shadow or reflection: the fact that you don’t merely suffer but have to keep on thinking about the fact that you suffer. I not only live each endless day in grief, but live each day thinking about living each day in grief. – C. S. Lewis
What was a strange summer has suddenly turned into an even stranger “back to school” season. I know that I am totally confused as to which day which children are studying in school and which are studying remotely.
There is no doubt that this pandemic has created uncertainty, and the not knowing what tomorrow will bring, has taken its toll on many.
But there is something that you can still count on. If kids are back at school, it’s a tell-tale sign that Rosh Hashanah is right around the corner.
With just two weeks until the new year, we are starting to think about how to improve ourselves in the upcoming year. One way we do this is by reflecting on the past and trying to understand where we fell short of our goals.
Having a longer fuse so as not to get angry at the children, phone calls to elderly neighbors who are stuck at home due to the coronavirus and being a more attentive spouse are just some of the goals that we set for ourselves to become better individuals.
In today’s fast-paced culture, taking time out to think isn’t so popular, but to reflect on the past and thoughtfully plan for the future is the only way to truly improve.
Explaining how the process of repentance (teshuva) shouldn’t be depressing, Avi Muschel, PsyD, and Martin Galla, PhD, of the Yeshiva University Counseling Center write, “The Rambam believes that although there is a place for guilt in the teshuva process, he only subscribes to ‘constructive guilt,’ which inspires better behavior going forward, and not ‘destructive guilt,’ which ruins a person’s mood, and distances him further from his goal.
“The most important part of teshuva is to simply be better. A person should work toward changing his actions, and through that process, he has already performed the most significant aspect of teshuva. The feelings of guilt are beneficial only inasmuch as they help a person maintain his commitment for the future. Clearly there is no benefit, or even permissibility, in allowing feelings of guilt to become so overwhelming that they cause a person to continue doing the very deeds that he was upset about in the first place!”
While preparing ourselves spiritually takes front and center at this time of the year, now is a great time to hit the reset button on our finances, and get back on track financially. Don’t get caught up on the “destructive guilt” from bad money decisions, rather understand what went wrong and try and live smarter financially.
By taking some time to reflect on your past investment mistakes, you can get on track for a much sweeter financial new year.
Don’t overthink
It’s actually quite simple. As I have written before, the way to make money over the long run is by sticking to a strategy.
University researchers studied why investors, using available technology to copy exactly what successful investors like Warren Buffet are buying and selling, are unsuccessful?
The conclusion: Investors lack the discipline to exactly follow what the “top investors” are doing. They start interjecting their own analysis into the equation, don’t buy or sell all the same stocks, and ultimately underperform the market.
The way to make money over the long-term is to stick to a strategy and own solid investments.
Investors 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 reasons, understand your goals and invest with those goals in mind.
If you need your money in a year or two to buy an apartment, you may have to accept getting a small, guaranteed return on your investment as opposed to “trying to beat the stock market.”
Forget about short-term stock market gyrations and focus on your ultimate goal. If you understand your goals and you invest with an eye on meeting them, your chances of success will be much greater.
May we merit a happy, healthy and sweet New Year.
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 the author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing. www.gpsinvestor.com; [email protected]