Save Yourself

    Change Your Attitude to Impact Your Bottom Line

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    Quite often in my practice I save people – from themselves. Because information is readily available, consumers are enticed by today’s highest rated stocks, best venture capital deals, and newest no-risk opportunities with guaranteed ten percent returns. We also hear about lottery winners who quickly lose their financial gain and sometimes return to a state worse than before the big win. My parents imparted much wisdom to me, and one nugget that applies here is: If it sounds too good to be true, it probably is. The reality is there is no get-rich-quick method that lasts.
    Let’s walk through a scenario that is repeated over and over in households. I call it the dreaded tax return savings method. Clients use their tax return to start an emergency fund. “We won’t touch it!” They vow. But by the next year the money is gone and the process starts over again. Why? Another wise nugget from my parents: No pain, no gain. Have you noticed how very true this is? Those things we work the hardest for mean the most to us. It’s the work that causes transformation and attitude shifts.

    Let me explain. Most financial advisers across the country agree that systematic wealth accumulation is the best method for clients to meet financial goals and objectives. When money is set aside every month to accumulate over time, our desire to spend it lessens each month that we continue the process. In the beginning we may be focused on account balances and withdrawal temptations, but over time, a good habit develops that creates an attitude shift. Our goal changes from spending on wants to desiring preservation.

    This systematic approach to investing is called the dollar cost averaging strategy. If you purchase in the stock market monthly you experience different prices with each purchase: some months higher, some months lower. The process lowers your average cost per share, but with an asset allocation that is suitable for you and your goals, this strategy can increase your opportunity for better returns overall.

    The same holds true with getting rid of debt. Most clients who try to cover debt with some windfall of cash – be it a bonus or a tax return – find themselves back in debt in a very short period of time. Debt consolidations don’t work either, unless accompanied by attitude adjustment. Systematically paying off debt with a no-new-debt attitude is the best approach because though it creates pain for a short period of time, it promises gain in the long term.

    I have learned over the last twenty years that our attitudes have more to do with our money than we realize, and attitudes change only when something causes them to change. We rarely alter our life until crisis strikes or we experience discomfort. This is unfortunate but true. The pain of slowing down and taking smaller, consistent steps to advance your finances will in the long run create much gain – not only in your finances, but also in your life.

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    Angie Shay
    Angie Z. Shay has worked in the financial services industry for more than 22 years. She is president of THE PATH Financial Strategies, LLC. Angie Shay is a financial adviser with Eagle Strategies LLC, a Registered Investment Adviser and an indirect wholly owned subsidiary of New York Life Insurance Company. THE PATH Financial Strategies, LLC is not owned or operated by Eagle Strategies or its affiliates. Neither THE PATH Financial Strategies, LLC or Angie Z. Shay provide tax or legal advice.