Fast Times

For the month of October, my church is reading through Proverbs together.  Conveniently, October has 31 days, and the book of Proverbs has 31 chapters.  The marching orders are to read one chapter a day and to extract one nugget of wisdom to meditate on.

Yesterday was day 13 (October 13th), and this verse jumped out to me, Proverbs 13:11:

Wealth gained hastily will dwindle,

but whoever gathers little by little will increase it.

Like much of Proverbs, this is a simple truth but a timeless one.  How many articles have we read about a lotto winner or professional athlete that comes into a sudden windfall and how that money quickly dwindles away?

 

For some, there is an innate desire to get rich quickly, and there is a constant searching and appetite for the tips and tricks to make this happen.  BUT perhaps this universal truth may lead us to be careful what we wish for.  There is something to be said about enjoying the fruits of your labor that you acquired by the sweat of your brow over many decades.

All of this made me think of a recent conversation I had with a young man aspiring to create and grow wealth.  He was at a crossroads in life, deciding between two potential career paths, and wanted me to provide some guidance/wisdom.  From his perspective, this choice – this career or that career – felt like it would determine his ability to meet his wealth aspirations.

I told the young man that he probably wouldn’t like my advice or perspective, and I told him I would describe the simple equation to acquiring generational wealth.  Whether he was to choose this career or that career, the primary determinant of success (according to his aspirations) would be to (1) spend less than he makes (2) invest the difference (3) let it compound for a lifetime.  I even threw in a fun story about a janitor who bequeathed millions of dollars to charity.

Wealth accumulation really is all about these disciplines – controlled spending, saving, investing, and waiting, and waiting, and waiting…  Boring? Sure! Perhaps he was looking for a secret truth to accelerate the process, but gained hastily will dwindle in reality.  The wealth journey is won by gathering, little by little, a game of inches.

Still, he wanted to steer the conversation toward more flashy topics – significant career changes, hot investment ideas, and anything else that would turbocharge his desired outcome.  When I went back and reiterated the success equation I had laid out, his response was telling, “… but I like nice things, cool cars, and stuff, and I really want a Rolex watch.”  I told him this was basic economics, that life is full of tradeoffs. He has competing objectives, and ultimately one of those objectives [desires] will crowd out the other.

We live in a fast-paced culture. We expect to satiate our appetites quickly – fast food, tweets, and online dating. Everything is made to order and ready to consume instantly.

It is impossible for this culture and these expectations not to permeate our investment plans. If we have even an inkling that our friends, neighbors, or any other investors have a way to fast-track getting rich, we are all in. These expectations are not realistic, though, and although we can catch a lucky financial wave every once and a while, ultimately, that wave crashes, and we are left financially beached.

Slow and steady wins the race.  Not exciting, not new, just the truth.  We set our objectives, prioritize them based on importance, design a portfolio/plan to meet those objectives, and then work at it.

So, what do you do with today’s lesson? Well, I’m assuming that you have had some financial success if you are reading this article – and a blog on personal finances. And that you will have the opportunity to speak into someone else’s life; a family friend, niece, nephew, mentee, etc. Today’s discussion is a reminder that even the simplest truths can be the most profound. Wealth creation had the same equation a few thousand years ago (Proverbs 13:11) as it does today. The principals are timeless. Somewhere along your journey, someone spoke into your life; now, I encourage you to go pay it forward.

Off you go…

The Bahnsen Group is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

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This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates.

About the Author

Trevor Cummings

Private Wealth Advisor, Partner

Trevor is a Partner and Director of our Private Wealth Advisor Group.

As the author of TOM [Thoughts On Money], Trevor endeavors to write and speak about financial concepts and principles in a kind of “straight” talk demeanor and posture.

He received his Bachelor’s degree in Organizational Leadership from Biola University and his MBA from California State University, Fullerton.

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