“3 Weeks of Thankfulness – Week 1″

As we approach the Thanksgiving holiday in the USA, what better way to lead into it than to talk about thankfulness and personal finance!  If that doesn’t get your engine revving, then I don’t know what will.  Ok, so maybe there is a hint of sarcasm there, but in all seriousness, I believe there is value in being grateful for what we do have when it comes to finances rather than always thinking about what we don’t yet have.  An attitude of thankfulness around personal finances can produce characteristics of patience, generosity, and contentment that we will be exploring over the coming three weeks.  In the first week of our three-part series on thankfulness we will be looking at patience in more detail. Combats a Tendency Towards Instant Gratification “Patience is a virtue”.  We’ve all heard this famous quote, and while it might be easy to grasp, it can be painstakingly difficult to abide by.  In a world where we can scroll through our social media accounts, google any question we have, or simply ask Alexa our questions it’s tough to see the value in delayed gratification.  Why should I wait for something later, when I can have something different right now?  When it comes to finances and investing our money, the answer usually means that choosing the “right now” stuff means having less money and choices in the long run.  We encourage our clients to “pay themselves first” and automate their saving and investing to combat our preferred emotional response of instant gratification.  In turn, they can reap the benefits of this approach when they have more choices and flexibility in retirement. In Turn, this Promotes Savings While It may seem obvious that “paying yourself first” would promote long-term saving and investing, it isn’t always the case.  Many people can delay instant gratification but then don’t know what to do with the funds that they haven’t spent.  It’s important to not only delay the gratification, but then ensure every dollar in your budget has a place and purpose.  Whether it is putting the money in a short-term savings account, investing in an after-tax brokerage account, or stocking money away in a retirement account (or some combination of these!) it’s important you have a plan for these $$’s and stick to it. Think “Time-In-The-Market” NOT “Timing the Market” Compound interest really is the eighth wonder of the world.  The longer you can have your money invested into the market, the more time you give your money to compound with growth.  Additionally, having patience around your investment portfolio also means that you aren’t trying to find the latest “stock pick” from your Uncle, but rather identifying an investment strategy based on your appetite for risk and then sticking with that strategy during market fluctuations.  If you invested $10,000 in the S&P 500 at the end of 2003 and kept that invested until the end of 2018, it would have grown to $30,711.  Alternatively, if you had missed only the 10 best days during that 15-year stretch, your funds would have only grown to $15,481!  Again, it’s all about time in the market, and not trying to time the market. We encourage you to take some time over the upcoming holiday period and take stock of what you are thankful for, and then in turn let it promote patience over your finances.  If this resonates with you and you want to talk to a professional, then reach out to one of our advisors today!

November 15th, 2019