Sandboarding and car keys: Time flies - opinion

So this week was my Facebook birthday. Thanks to all of you who sent wishes and a special thanks to special clients from Ramot, Jerusalem, who sent me hot chocolate cupcakes. They were really good! We just came back from vacation and one of the things we did was sandboarding in the Negev desert. It’s like snowboarding but on sand. You walk up a big sand dune, put down your board, get on it and head down the hill. Of course my kids wanted to get used to it so the first time down they sat on the board, and successfully made it down the hill. Then it was my turn. 

Now, understand that I never went surfing or snowboarding, but have spent hours watching people do it on TV, so I was an expert. I got on the board and headed down-hill. After about four seconds I totally lost my balance and fell off the board and went tumbling down and got a mouthful of sand. Believe it or not this was more successful than my last attempt, 2 years ago, at “extreme sports,” when I got on a mechanical bull, and lasted 3 seconds before being tossed off (and hurt what felt like every bone in my body). I may not be 18 anymore but at least I am young mentally!

We then returned from our vacation, and no more than 45 seconds after opening the front door, my 18 year old son asked, “Abba, I am going to Har Homa to play basketball, can I have the car tonight?” As if I wasn’t feeling old enough from my birthday and my unsuccessful trips down the sand dune, this hit me like a ton of bricks. Now he happens to be a good driver, but this was the first time legally he was allowed to take the car by himself. Being the good father, I smiled and said: “Sure, enjoy!”

It seems like just yesterday that he was in daycare, and that I was spending my summer vacation hanging out at Alki beach. But in reality that was over 30 years ago! What does any of this have to do with investing? 

Well over the last few weeks I have met with 3 young couples and have tried to instill in them the importance of investing and starting as soon as possible. For many young adults the concept of saving for the long-term may sound good conceptually but in practice they would rather live it up now and spend money, and worry about the future at some point down the line. 

To drive the point home I have started showing them a compound interest calculator. I show them that if you start with $10,000 and add $2,000 a year, at 6.5% (which isn’t a high return), they will have $500,000 in 40 years. Their reactions are the same. Their eyes light up and decide to be a bit more disciplined with their money.

How can you manage to scrape together the money needed to invest? In our day-to-day lives we are always making plans. We plan what to have for dinner; we plan which parent is going to pick up which kid from school; we plan vacations. We are constantly planning. We tend to have a goal, and we initiate a plan in order to reach that goal. The same should hold true with our finances. Making a financial plan is essential to start preparing for your future. If your goal is to have a half a million dollars when you retire, start planning for that. I know that some of you will roll your eyes when I say start with $10,000 and add $2,000 a year thinking it’s impossible. Well it isn’t. In fact for those of you who get Keren Hishtalmut (short term tax-free savings plan) from your employer, chances are that you are adding far more than $2,000 a year. Just make sure that you save that money. There’s no obligation that when it opens up after 6 years, that you go to duty free and spend the money!

Start investing now. Don’t procrastinate because if you do you’ll wake up one day in your late 40’s or early 50’s and realize you have little saved and will have to completely change your lifestyle to play retirement catch-up.