‘I love sleep. My life has the tendency to fall apart when I’m awake, you know?’ –Ernest Hemingway
Though we are in the midst of surging corona numbers, and though many skeptics don’t think it will happen, the school year is still slated to start on the first of September. Certain schools, my kids’ included, are actually starting this coming week.
For many children this means that they will enjoy seeing “AM” on the clock when they wake up for the first time in two months. For me, the best part of the first of school is seeing my children with huge smiles on their faces as they head out the door. Well, the smile is more like a scowl and the early morning wake-up lends itself to dreary eyes, but hey, at least they get to learn something.
Walking around my neighborhood the last two weeks I have had the privilege to hear many shofar blasts, as shofar blower’s start getting in shape for Rosh Hashana. In synagogues it can be worse, as less-than-professional shofar-blowers try and showcase their talents to get the call to blow when it counts. That can lead to some unidentifiable sounds, and it never ceases to amaze me that around 7 a.m. and then again at 7:30 a.m., I hear lots of barking dogs! Thankfully, where I pray, Zerach has been in full form since 1.
Why do we blow the shofar? According to the Rambam (Hilchot Teshuva 3:4), the reason is: “Even though the blowing of the Shofar on Rosh Hashana is a decree of the Torah, there is a hint in it, as if to say: Awake, sleepers, from your sleep, and slumberers from your slumber. Search your actions and repent, and remember your Creator.”
To put it simply, it’s a wake-up call.
Time flies, and before we know it, we are quickly approaching retirement. The realization hits that not nearly enough money has been saved and then panic strikes.
As I have mentioned in the past, discussing the state of retirement savings, Bob Pisani of CNBC writes, “At Vanguard, the average 401(k) account value for an investor age 65 and older is $209,984. This sounds like a pretty good number, and it is, but there’s a problem. That number is pulled higher by a smaller number of “super savers” and high-income earners. The median balance among the age group, where half have more and half have less, is a measly $64,811. Average that out over 20 years – most Americans should expect to live into their 80s – and that is not a lot to pull out on a yearly basis; perhaps a little more than $3,000.”
How can you have more?
First of all, start living within your means and save. You need to make saving and investing a priority. Make a habit of “paying yourself first” every month. Whether you invest in real estate (where you get a monthly rent check) or you invest in a well-diversified stock and bond portfolio, focus on a slow and steady approach to build wealth. Don’t make the mistake of being “too smart.” I could write a book about the crazy investment ideas that I have seen people throw money at, all in the hope of achieving an outsized return. What usually happens is that these schemes don’t end well, and the investors lose much or all of their investment. Keep in mind the basic principle: If it sounds too good to be true it probably is.
I know I sound like a broken record but I can’t stress enough the importance of just starting. Too often, individuals delay investing because they think that they don’t have enough money or that the market is too high. They think that if they don’t have hundreds of thousands of dollars, there is no point investing. So they end up keeping their money in a zero-percent interest account in the bank. Or they say that the market is trading near all-time highs so they will invest after the market drops.
Statistically, the stock market has been a very profitable investment over the long-term, which actually means that it trades at record high levels frequently. Don’t think that you have the secret sauce and can time market movements. If most successful investors can’t time the market, why do you think that you can?
Work
If you are getting close to retirement and don’t have enough money put away, the smartest thing you can do is to continue working. Delaying retirement by a few years can be a huge factor in being financially able to retire. By working, not only do you push off tapping your retirement funds, but you can keep saving for a couple of more years. According to the Oblivious Investor, “Retiring later is often the highest-impact thing you can do for your retirement finances. Each additional year of work is one more year to accumulate savings and one fewer year of spending from your savings.”
It’s time to wake up and start taking action so you can have a secure retirement.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
Aaron Katsman is author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill). He is a licensed financial professional in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.