NO FINANCIAL WORRIES: THE POLITICIANS WILL TAKE CARE OF YOU

As originally appeared in The Jerusalem Post on April 5th, 2019.

Elections should be held on April 16th- the day after we pay our income taxes. That is one of the few things that might discourage politicians from being big spenders.

-Thomas Sowell

We have entered the stretch run of the Israeli elections. So far the highlight of this election cycle has been watching the election commercials with my kids. It’s hilarious watching with them as some of the much smaller parties that no one has heard of and are severely underfunded, produce commercials with their smartphones in selfie mode, or the commercials all done in PowerPoint. The kids just sit there laughing. It’s much like a few years ago when channel surfing one Chol Hamoed Pessach, we came across the 10 commandments movie with Charlton Heston playing Moses in all his glory. I was so excited I called the kids over and they sat on the couch, and they started laughing at me and at the TV. When I asked them why they said that the graphics were a joke. They could create something much cooler on the computer. Then, as they often do, proceeded to make fun of me being old!

What makes me cringe every election cycle is how the politicians go around making all kinds of very expensive promises, and the electorate eats it up. It’s like people are willing to abdicate their own financial sovereignty because they truly believe that the politicians will take care of their financial needs. Whenever I hear politicians go on and on how they will help us and solve all of our problems, I am reminded of the brilliant quote from former US President Reagan who said, “The most terrifying words in the English language are: I’m from the government and I’m here to help.”

Can Government Help?

Instead of taking individual responsibility, more and more people look for the government to solve their problems. As if some politician has the secret sauce and knows what is better for you than you know. If anyone needs reminding how inefficient government is, just think about the high-speed train from Jerusalem to Tel-Aviv. It only took 10 years longer than planned and was way over-budget. And now that it finally is up and running, it is plagued by all kinds of technical difficulties. Want another example? Just ask the evacuees from Gush Katif how well the government took care of all of their emotional and financial needs. Time after time the government fails us, and for some reason, many keep coming back for more and insisting that they are taken care of.

When it comes to personal finance issues what would make anyone think that the government would be able to get things right. They wouldn’t know a balanced budget if they saw one. The government can just spend more money than comes in and it’s left to future generations to pay the piper. For an individual, if you try implementing the same policy, you will file for bankruptcy and lose all of your possessions within a few months.

Do it yourself

You would think that the lesson would be learned. But no. When I speak to people about retirement planning, I am often met with a common response. The response is, “I don’t need to plan for retirement because the government will save me.” Good luck with that! That 2500nis of Bituach Leumi won’t even pay for the A/c in the summer.

You need to take control of your finances. You need to create a disciplined approach to saving. First of all, it’s important to sit down and do a budget. By doing this you can get a clear picture of how much money is coming in versus how much money is going out for expenses- wouldn’t it be nice if the government did this? The next step is to determine how much needs to be saved and invested, monthly/annually, in order to create over the long-term a net worth which will allow you to achieve your goals and needs.

Food for thought; If you invest $15,000 at the age of 25, an add $2,000 a year with a return of 5.5%, at 65 you will have over $415,000. I strongly encourage you to go online and search for “compound interest calculator” and you can plug in your own numbers and see what needs to be done to get you where you want to be financially.

Start

Your retirement is no one else’s responsibility— especially the government’s. Since no one else is worrying about your future, you need to take charge and start implementing the basic principles to get yourself on the path to financial security.

Don’t forget to vote!

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 author of the book 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, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.