Corona and Financial Freedom
As originally appeared in The Jerusalem Post on April 1, 2021.
‘Emergencies’ have always been the pretext on which the safeguards of individual liberty have been eroded.
–Friedrich August von Hayek
It’s springtime and that means allergies. Every year many of us suffer: sneezing, runny noses, teary eyes, achy bodies, and just a general lousy feeling as certain pollens enter the air. A week and a half ago I thought I was starting my annual bout. In fact, a friend of mine gave me some over-the-counter allergy medication that he ‘swore’ would have me living as if the spring bloom never happened. The pills didn’t really work and then Shabbat morning as I drank some wine and had some bread I noticed I lost my sense of taste. I didn’t really have a sense of smell for a while because I was all congested from the allergies. Well, that same Saturday night I went to take a Corona test and voila, it turned out to be positive. Keep in mind that I had been fully vaccinated exactly 2 months to the day of my positive test. Yes, I was one of the lucky ones to beat the odds, and get Corona even though I was vaccinated!
Always looking for a way not have to help clean for Pessach, in my wildest dreams I never dreamt that catching the virus and going into quarantine would be my excuse. At this point, I want to thank my dear wife who worked serious overtime to get the house ready for the holiday, took care of my food needs by preparing meals for me every day of my ordeal, and made sure that I stayed in my room and didn’t start wandering around the apartment potentially infecting others. Knowing that I was going stir crazy and climbing the walls being locked up in a small bedroom for a week and a half, nonetheless, she looked out for the greater good of the family and kept me in there. She was and is truly amazing!
For the last week, we have been celebrating the fact that we have gone from being slaves to being a free people. In the tractate of Pesachim 10:5, the Mishnah states that “man is obligated to view himself as if he himself left Egypt.” In other words, we must internalize the fact that we were once slaves, but now we are free. Although we are free in a spiritual sense, are we financially independent? Have we put off saving for the future? Do we still rely on our parents for help? Has overdraft become a way of life? If the answer to any of these questions is yes, then our eating of ‘bread of affliction’ may have more than one meaning.
Begin
There is a common perception that only people with a lot of money are able to make money. This is just flat-out not true. If you want to achieve financial independence then you need to start investing. By saying ‘financial independence,’ I don’t mean getting rich. Rather I mean that you are self-sufficient, have retirement savings and don’t fret when your toilet breaks and you need come up with some money to pay a plumber to fix it. In such situations, it is best to contact experts who are experienced and affordable from plumbing draper who can solve your problem quickly. When a plumber is at work, make sure they discuss the rate you need to pay them for fixing the damage. Don’t think that $25,000 – $50,000 is not enough to start with. With that sum you could start an investment account. You could make a down payment on a rental property. But if your mindset is that you are destined to always have a small nest egg and always be reliant on someone else, you will never get anywhere.
As I have written many times, the majority of Americans between the ages of 20-35 have zero retirement savings. Do you think that it’s just because they are young and things will improve with age? Well, it’s even worse for older Americans as half of them over 53 years old have no retirement savings. It’s so important to start investing as soon as possible. If a 25-year old with $10,000, started adding an extra $320 a month at a 7% annual compound rate of return until they turned 65, they would wind up with $1 million.
Start Building Wealth
Another common mistake is thinking that it’s impossible to save while living in Israel because according to “conventional wisdom,” it’s impossible to save on an Israeli salary. However, this is really not the case. If you make saving a priority, then you will be surprised at how much you really can save, even in Israel. We all tend to make certain lifestyle choices which impact our financial situation. Whether it’s living in a certain community or choosing to take a particular vacation, our expenses are directly impacted by these decisions. But if we make financial independence an actual priority, we can make the lifestyle changes necessary to save a couple of thousand dollars a year, getting on the path to financial security.
Chag Sameach.
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.
