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Practical Planning Tip: The Four Sons of Investing - The Son Who Doesn't Know How To Ask

April 15, 2024

In the theme of the upcoming Passover holiday, over the next week or so we’re going to discuss financial planning lessons from the seder.

So, One of my favorite parts of the haggadah is the section about the four sons. The text reads: “Corresponding to four sons did the Torah speak; one who is wise, one who is evil, one who is simple and one who doesn’t know to ask.” This pivotal scene is rich with symbolism and a springboard for much insight.

One popular d’var Torah I’ve heard over the years is that each son represents a different point of a person’s life. Going from a baby who does not know how to ask to a simple young son in elementary school. The evil son draws parallels to an angsty, rebellious teenager. Finally, the smart son represents a seemingly wiser and more experienced self. The moral is that at the seder we’re meant to draw in and speak to everybody around the table at their own personal level regardless of how young, old, ignorant, or experienced they may be.

I’ve been reflecting on this four sons d’var Torah and how it resembles the different stages of an investor’s journey. Understanding this progression can prove insightful for many people in order for them to recognize where they are in their own investment journey. By the end of this series of videos, viewers will have a better understanding of what to strive for in their own investment journey.

Let’s first discussStage 1: The investor who doesn’t know how to ask: The first stage of an investor’s journey is having no knowledge of how all this stuff works. The alphabet soup of 401(k), IRA, HSA, ETF, SMA, 529, and more that represents the investment industry leaves newbie investors understandably confused.

Unfortunately, lacking knowledge and expertise makes rookie investors susceptible to unscrupulous salespeople looking to make a quick buck at their expense. This is when investors typically get suckered into buying permanent life insurance that they don’t need, annuities that are not suitable for their situation, and high cost and tax inefficient investment products.

It’s not necessary for investors to start at “Stage 1,” but this is a natural first step for many investors.

You can WATCH the full video here.