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Practical Planning Tip: Investing Lesson's From My Grandfather: Purpose-Oriented Investing

January 29, 2024

In the theme of Holocaust remembrance day, which just passed, for the next week and a half I will discuss investment lessons I learned from my Zeidy, or grandfather, who was a holocaust survivor and also one of my first clients.

Also, One thing that I inherited from my grandfather, was his sweet hat collection, so for each video I will be donning another of his hats, as well. I imagine I will get lots of requests to purchase these hats, so I’d like to say up front that they are NOT for sale.

Today’s Practical Planning Tip we will discuss Purpose-oriented investing:

By way of background: It is said that the Americans who stormed the beaches of Normandy and saved the world from the ultimate evil are members of the “Greatest Generation.” I believe this description can also apply to the many people who lived through World War II in Europe and moved to the United States to create a new life. Those immigrants typically came with no family, having lost many during the war, minimal understanding of English, and nothing but the clothes on their back.

My grandfather, Sam Blumenfeld, was part of this latter Greatest Generation group. He came to New York City in 1947 after experiencing the atrocities of the Holocaust and seeing many friends and family members murdered at the hands of the Nazis. He didn’t complete his schooling since the war interrupted his studies. Yet, in the United States he managed to have a family, start a small business, become an active member of his community, and enjoy a more than 30-year retirement before passing away approximately four years ago at the age of 98.

He was also one of my first clients when entering the wealth management industry after college. Little did he know that he taught me much more about investing and retirement planning than the training program at a major Wall Street bank early in my career. The money lessons I learned from him were based on nearly a century of experiences. I will outline just a few personal finance tips I learned from my grandfather over the course of our professional relationship.

Today we will start with “Purpose-oriented investing”: Many folks start investing without clear goals. Sometimes they get into the stock market for a little excitement or because it seems like the responsible thing to do. My grandfather invested with the direct purpose of meeting his cash flow needs and leaving an inheritance for his family. This laser focused approach was helpful in tuning out noise. He never bought into the latest investment fad and he didn’t trade frequently trying to outpace an arbitrary index or his friends’ alleged performance. He didn’t get caught up on relative performance since his sole benchmark for success was his ability to achieve his own objectives. That is why he was able to retire on a modest sum of money that managed to support his lifestyle for over three decades in retirement.

Additionally, My grandfather implemented a “values-based approach” to investing before it was popular. He refused to invest in certain European stocks because of his experiences during the war. Proper portfolio diversification is necessary to achieve better risk adjusted returns, but performance became secondary as he would not violate his personal beliefs. The same concept is popular today with the focus on environmental, social, and governance related issues, as well as religious or values-based investing. This was just one example of my grandfather being ahead of his time, investing with a values based approach before it was in vogue.

You can view the FULL video here.