Learning Financial Conduct from our Ninja Hamster

As originally appeared in The Jerusalem Post on April 22, 2021.

Take chances, make mistakes. That’s how you grow…. You have to fail in order to practice being brave. – Mary Tyler Moore

We had a scare in the Katsman home last week. Certain family members announced the death of our hamster, Speedy. While it may have been wishful thinking for them, they went on and on how no one had seen Speedy in a few days and that looking into his little house it appeared that he had stopped breathing.

Well as we get ready for his big 1st birthday bash in 2 weeks, I am pleased to say that he is alive and well! Not only is he alive and kicking but apparently he saved up his energy last week in order to turn into a Ninja this week.

Yuval Shemla may be the Israeli Ninja champ, but our Speedy is going to give him a run for his money. This week he started holding on to the top of his wheel and then grabbing onto the top of his cage, swinging from bar to bar, side to side of his cage, like someone on monkey bars. As he started his new trick, he fell more than once and came crashing down hard on his back, but he got right back up, scratched himself for a minute, and tried again, finally mastering the apparatus.

Just as Speedy learned from his gymnastics mistakes, we can learn from our financial mistakes. Turningpointmoney.com writes, “After college, I started a new job making $42,000 as a junior software engineer. Within the first month on the job, the car I had driven for years rolled over 200,000 miles and needed a very costly repair. Instead of making the repair, I purchased a brand new car… with a price tag somewhere near $20,000. To add to the insult, I financed this purchase over five years paying 6% interest.” Lesson: When you are broke, you should avoid all purchases where you have to pay interest. (Unless it is a student loan or mortgage.)

Never finance a consumer purchase and do not spend more than 10% of your annual income on a car.

Overspending on a car and then justifying the decision is something I hear often. Mistakes happen to everyone; the goal should be to learn from the miscues and try not to repeat them.

When it comes to investing, almost all investors will make some bad investments and lose money. The point is:

1. Do not get nervous about losing some money and swear off investing in the future. The best way to have a secure financial future is by investing. Whether investing in the stock market or in real estate, own good assets and hold them. Sure, occasionally you may lose money but over time you should do well.
2. Don’t repeat the mistake. If you decided to take a flier on some small stock that you read about in some email and you lost most of your money, don’t do it again.

A few weeks ago when I was sitting at my computer at home and working, I mumbled to myself that this client should have listened to me but instead decided to invest according to recommendations from free newsletters.

He had called to tell me to sell after taking a big loss. My oldest son, who is intrigued by the concept of making money by doing little to no work, then asked me what I thought about penny stocks. Apparently, he came across some articles and got some emails about how you can make “easy money and get rich” by investing in penny stocks. I then explained why most penny stocks are scams and that there are no shortcuts to making money. I hope this is one investment that he will not have to learn from by his mistake, and will forgo investing in penny stocks.

We are all human and as such make mistakes all the time. Just as in other aspects in life we grow as individuals if we learn from those mistakes. When it comes to finance, we can grow our assets by not repeating mistakes of the past.

Happy birthday Speedy and thanks for the lesson!

 

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 the author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both 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, SIFMA, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.