I’d like to conclude this video series on relying on hope as an investment strategy, and what we can learn from the Israelite’s leaving Egypt. I’d like to share just a few more practical steps investors can use to ensure their financial affairs are in order.
Let’s start with Automating your savings: Life is expensive and finding extra money to invest can be hard. Here’s a trick that I use with most of my clients: Automate your savings. This means that every month you should have some money going into your retirement and investment accounts without any effort on your part. You set up this automation to take a reasonable sum off the top of your income and simply have less money available to spend on other items. It is psychologically easier to learn to get by on less than it is to ensure you have a surplus at the end of the month. It likely won’t impede your lifestyle, and you will seamlessly be building your nest egg.
Next, Diversify your investments: These days, I find myself thinking about the concept of diversification often. Many investors are riding the high of many years of explosive market growth (with a few interruptions). The reality is that nothing goes up forever. I explained in previous videos how all areas of the market move in cycles. What goes up must come down, and vice versa. It behooves all investors to embrace a philosophy of portfolio diversification, where they don’t just concentrate their money in one investment or one area of the market.
And finally, Manage risk: There are unexpected events that can be financially devastating to any family. This includes death, disability, and long-term care needs. Thankfully, there are insurance products available for these scenarios that can help protect your loved ones. Too often folks need to rely on the community for support because they did not properly prepare. While Keep in mind, Your lack of preparation shouldn’t place a financial strain on others in your community and the level of assistance available may not fully cover your family’s needs.
Nobody wants to think about depressing topics like a premature death or unexpected illness. However, failure to have a plan in place for the possibility of such devastation will only lead to even more hardship for a person’s loved ones if that sad eventuality occurs.
It’s important to point out that the concept of hope is a wonderful thing. In fact, it may be the singular most important factor in sustaining the Jewish people, my people, for millennia. Despite regularly facing persecution, oppression, and annihilation we managed to not only survive, but thrive throughout the ages. However, hope by itself is not sufficient. In all aspects of life, it’s imperative to put in the work, preparation, and sacrifice to be successful. Remember, failure to plan is planning to fail and relying on a miracle to secure your financial future is far from prudent.