SCOTT REED: Managing financial pain now is better

By Scott Reed

Last week I had knee surgery. It seemed like a good topic for a financial column. I have had a number of minor surgeries, but only two major ones. Both major surgeries have been elective – elective in that I wasn’t at some critical point where I had to have surgery to live or to maintain a decent standard of living.
When I was 26, I had gall bladder surgery. I had gall stones and they didn’t have a good way to get rid of them other than surgery.
The physicians said, “You should have it now while you are healthy instead of waiting until you’re not healthy to have the surgery. Your body will recover faster.”
So, I did.
This recent surgery was a partial knee replacement. Not many people are good candidates for this particular surgery. It is less invasive than a full knee replacement and has shown great results for the right patient.
I thought about waiting until my knee was a little worse before going under the knife. But the more I read and the more I talked to my surgeon, I found that people who postponed their surgery until their knee got worse didn’t have as good a response to the surgery as those who went ahead and had surgery while their leg was still fairly strong.
It makes sense to me that, if you have a choice, invasive surgery is better managed by a strong body than a weak one. That is not just a fact in medicine; it is a fact in investing as well.
Too many times I have seen parents start a college fund when their children are 15 years old or start saving for retirement when they are 50. There is always going to be pain in investing for future events, but the pain is much more manageable and the chance of success is much more probable if you begin the process when you are financially healthy enough to stand the pain.
We in America seem to be better at dealing with crisis situations than at hurting people before we have no other choice.
Just look at Social Security. There isn’t much of a secret to what we are going to have to do to fix it. There isn’t much argument about the fact that the sooner we get started fixing Social Security, the less total pain will be inflicted.
So what is stopping us? What is stopping us with the Social Security situation is that if we start right now, we will have to choose who feels the pain. If we wait long enough, there will be no choice – everyone will feel the pain. That way no one has to take the blame for the choices made. It’s a lousy reason to wait.
We are going to have a lot of people run out of money before they run out of life in the coming decades. It doesn’t have to be that way. Don’t let one of them be you.
Scott Reed is CEO of investment advisory firm Hardy Reed in Tupelo. Contact him at (662) 823-4722 or sreed@hardyreed.com.