“…Let us not waste our time in idle discourse! Let us do something, while we have the chance….” Vladimir, Waiting for Godot by Samuel Beckett
The characters in Waiting for Godot sit under a leafless tree waiting for Godot to show up and it is like groundhog’s day. Time drags out and actions repeat in an endless loop. The men insist they will not wait for Godot, and yet they continue to do so, even though they know it is useless. It is maddening and futile.
It reminds me of something I often hear from would-be investors:
“When I have enough money to invest, you will be the first person I speak with.”
The odd thing is, I am frequently approached when I am minding my own business. I can be reluctant to share what I do for a living because I have seen the anxiety and embarrassment it sometimes conjures up in others.
I rarely have follow-up conversations with these types that are hopeful. I might run into them again at a gathering, and I will never bring up finances – but they will. They will tell me they haven’t forgotten about me and when they have money they will be sure and call. They are right about one thing: they haven’t forgotten about me; they have forgotten about themselves.
They are waiting for “good dough” to invest; to which I say good luck.
Their lack of commitment to securing their finances is usually a lot less about actual resources available than it is about their priorities. No matter what someone’s goals are –personal, professional, spiritual, financial – there comes a point when a first step is taken; a desired outcome is set and a series of action steps are taken.
I saw a headline on Charles Schwab’s 2018 Modern Wealth Index study: “Most Americans have no financial plan, and many think their wealth doesn’t deserve one.”
Sadly, it is true and with devastating results.
According to the survey, which looked at daily money behaviors, people who tend to plan are more likely to have an emergency fund and life insurance. 75% of planners pay their bills on time and still manage to save money every month versus 33% for non-planners. They are less likely to carry a credit card balance and they are more apt to feel financially secure.
When it comes to their investing behavior, the gap between these two groups grows even wider:
- 82% of planners consider their risk tolerance when investing versus 55% for non-planners;
- 78% of planners are aware of fees and investment costs versus 44% for non-planners; and
- 54% of planners regularly rebalance their portfolios versus 17% for non-planners.
Having a financial plan creates priorities and causes focus, which leads to action and improvement. That is why it is not surprising to me that planners are more aware of the very things they can manage – the risk, fees and asset allocation.
Without focus, procrastination kicks in. The next holiday season when I’m around the punch bowl I will hear the same nine million excuses about why nothing has changed since last year.
I’m not judging, mind you; but I know one thing. I can’t help, either. I’m the kind of person that if I’m told a problem, I will do my best to offer a few actionable steps to take. When I just hear the worry with no commitment to taking action – suddenly the other person’s discomfort and anxiety become mine. That may make me sound selfish, but I‘d rather help than worry.
Something as simple as putting aside $50 a week will amount to $1,000 after five months. It’s a start.
Companies like TD Ameritrade and Vanguard will open accounts with no investment minimums and low trading costs.
Robo-advisors, like Liftoff, are another great option. Based on an investor’s time horizon, goals and risk tolerance; an appropriate, low-cost, diversified portfolio is constructed and is rebalanced back to the original portfolio allocation.
Fear of not being able to achieve their financial goals may cause some people to waste the most precious ingredient to compounding interest: Time.
Time out of the market pays nothing, and the endless, senseless waiting begins; which, for some, never ends. Maddening and futile; and so it goes…