By Scott Reed
I was driving home from taking my children to school last week. I stopped at a traffic light and looked to my right. I saw a women dressed in workout clothes. She had on a fancy stretch top, a headband, all the workout fashion. … Oh, and she was smoking a cigarette.
When I was growing up, smoking was not such a big deal. So many people smoked that we really didn’t think much of it. But times have really changed. Everyone knows how smoking is a danger to your health. Everyone knows that it is not conducive to a healthy life style, so, seeing someone who is obviously trying to present herself as a healthy person, with a cigarette in her mouth, just doesn’t look right.
I find it easy to believe she wants a healthy lifestyle and that she has made a commitment to working out. The problem with smoking is that one cigarette will have almost no effect on your health. It is the accumulation of just one cigarette over a lot of years that will do you in.
So, if one cigarette isn’t bad for you and you want only one cigarette right now, then it is easy to make that bad choice.
Investing can be like that. We often know what we need to do to reach our long-term goals. We need to put a certain amount of money in our children’s accounts. We need to put a certain amount of money in our retirement accounts. We need to put a certain amount of money back for a rainy day.
Then we say to ourselves, “Well, if we take our kids to Atlantis for Spring Break instead of putting that money in their 529 plan, it’s still for the kids.” Or, “Why do I have to wait until retirement to enjoy retirement? I could do a little early retirement at a golf course in Arizona right now!”
And, of course, it is important to remember that a 60-inch flat screen TV does not qualify as a necessary purchase from your emergency account.
Every time that emotion comes into play in an investment plan, the path to success becomes more dangerous. Successful investors have found a way to put emotion aside and stick with a good long-term plan. Contrary to what many people believe, it is not hard to come up with a good long-term investment strategy. It is very hard to stick with it.
I have long said that advisers don’t get paid to come up with a good plan; they get paid to stop you from messing it up.
So, if you are going to talk the talk, then walk the walk. Put together a good long-term plan for your financial health and then quit smoking those financial cigarettes.
Contact Scott Reed at (662) 823-4722 or firstname.lastname@example.org.