Mom’s words of wisdom may not have always been what you wanted to hear, but almost always what you needed to hear and when you needed to hear it – moms are usually right. I am sure that had I learned to listen more at an earlier age, it would have spared me from plenty of trouble.
Had I listened… Maybe I would not have quit my job and moved to Texas to be with my girlfriend, right out of college. Had I listened… maybe I would not have bought a car I could not afford at an early age. Had I listened… maybe I would not have gotten suspended during my high school trip to Philadelphia. The list could go on, but you get my point.
An ounce of prevention is worth a pound of cure; listening to wise counsel and heeding it can make the world of difference. I often say that the difference between knowledge and wisdom is that Knowledge is knowing what to do, Wisdom is doing it!
My Mom has three favorite sayings. If I heard them once, I must have heard them hundreds of times.
- “If you have a problem, you are half the problem.”
- “Don’t sweat the small stuff, and it’s all small stuff.”
- “If it were easy, they’d get someone else to do it.”
1. “If you have a problem, you are half the problem.”
We all have found ourselves in difficult situations at times. We’re caught in a bind. Something has happened and we need to figure our way out. How in the world did we get into this mess? Well, if we’re honest with ourselves, we’re usually part of the problem – whether directly through our actions or indirectly through the choices we’ve made. This happens with investment returns all the time. The age-old saying is ‘buy low and sell high’. Sounds simple, right? Well – did you know that most investors actually ‘buy high and sell low’? If you look at stock and bond purchases and compare them to rising markets (Expansions) and falling markets (Recessions), you will see that most investors buy in rising markets and sell in declining markets. Because of this, many investors experience lower than average returns, and with greater volatility. Investors are part of the problem, as their emotional behavior with their investments creates part of the problem. Fortunately, being half of the problem means that’s the part you can control. You can choose how you react and you can choose the decisions you make. Or in the case of investment management, you can choose to hire a professional, to handle those decisions on your behalf.
2. “Don’t sweat the small stuff, and it’s all small stuff. “
I asked my mom the secret to her and my dad’s 40+ year marriage and her answer was “don’t sweat the small stuff, and it’s all small stuff”. Life can be wonderful and glorious, as life can also be ugly and complicated, with cycles between both. We all have ‘life stuff’ thrown our direction from time-to-time, the real secret is in how we react to it. Do we accentuate life’s challenges? Or do we simply tamp them down and do the best with what has been dealt to us, with a good attitude. From an investment standpoint, did you know that on average: 1) The stock market drops 5% on average 3 times per year, 2) It drops 10%+ on average once per year, 3) It drops 15%+ on average once every 3.5 years. 4) It drops 20%+ on average every 6.3 years. [SOURCES: RIMES, Standard & Poor’s. Assumes 50% recovery of lost value.] Just like with life, the stock market has ups and downs. It ebbs and flows. The secret, just like in life, is to go with it and not over-react. Don’t sweat the small stuff.
3. “If it were easy, they’d get someone else to do it.”
I got my first big promotion as a young professional at American Express, handling account development for our newest and one of our largest clients. One day, I called my mom to complain about how tough my job was, hoping to elicit a supportive response. Instead, what I got was, “if it were easy, they’d get someone else to do it”. What I needed was an honest response, which is exactly what I got. Good financial decisions are oftentimes not easy. They can be difficult. They may require making a sacrifice, deferring a purchase. They may require saying ‘no’ to a loved one or having a difficult conversation with a child. They may require a good look in the mirror and a change of behavior. Most folks do not ‘get rich’ easy or acquire wealth from a lottery ticket or a long lost relative. The secret to building wealth is a series of wise decisions over a long period of time. Go slow to go fast! If it were easy, everyone would have your net worth, and we know that is just not the case.
My mom is no longer with us, but the words she left behind still resonate deeply and carry into my daily life. It also carries into the advice I provide to my clients each day. If there is any takeaway from this message for you, it would be to stop and think before making a financial decision, ask yourself “Is this in my best interest financially?”. If you have any doubts, please feel free to reach out to us – that is why we’re here. Our role as a fiduciary is to act in our client’s best interest, ensuring we not only provide the best advice and guidance, but place their needs above our own.
