(Financial) Words of Wisdom from Mom

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(Financial) Words of Wisdom from Mom

As Mother’s Day approaches, our mind races towards what to do for mom, do we buy flowers, chocolates, gift certificate to her favorite spa? Where do we go for brunch?  We can probably also hear her passing on some of her favorite pieces of advice, “don’t slouch”, “do your homework”, “don’t put all your eggs in one basket” and the list goes on and on.  As a kid, most of the time the advice goes in one ear and out the other. But with a little distance from childhood, most of us have come to the realization that mom’s advice is usually spot on (Mother’s Day might be the time to tell her you appreciate it).  Here are a few of our favorite (financial) words of wisdom from mom.

A penny saved is a penny earned. Your childhood piggy bank was a good start to savings. But now that you are an adult, you should expand your savings options to include some type of investment and/or retirement account, such as an IRA, Roth IRA, 401(k) or investment agency account.  By contributing money on a regular basis, you are not only saving money but putting it to work for you. You will be happy you did, when it comes time to retire.

Don’t put all your eggs in one basket. This little gem actually made sense to me as a kid but only because I learned it the hard way.  One summer, I was helping collect eggs at my grandparent’s farm, put all the eggs in one basket, dropped it, and, well, they all cracked.  Whether you are literally collecting eggs or investing your assets, diversification is key to risk management.  By investing in a wide variety of investment options, you are spreading your risk. This will help weather the storm when one asset declines, you should theoretically have other assets appreciating in value. 

If it looks too good to be true, it probably is.  Sometimes we are so excited about the new cell phone contract offer or promise of 30% investment returns with zero risk that we jump on it before we really think about it. Taking a step back and hearing mom say “if it looks too good to be true, it probably is” is critical in these situations.  If someone promises high reward with very little risk, the red flags should go off and you should move on.  You do not want your hard earned and saved money to end up in the hands of the next Bernie Madoff. 

Don’t talk to strangers. Mom probably meant don’t talk to the creepy person following you at the park. But when it comes to getting financial advice, make sure you know who you are talking to. Ask respected family or friends to refer you to who they trust for financial advice. Interview the financial professional and inquire about his or her credentials, how they are compensated, how they charge for financial advice. It is important to make sure you trust the advisor and actually like working with him or her. After all, you are entrusting them to provide you with financial advice for your future.

MomThe list of advice could go on and on. All the advice the mothers in your life have offered over the years (like it or not) has applications to all aspects of your life, including your financial well-being. She truly does have your best interest in mind. Whether you decide to buy her chocolate or take her to brunch, make sure you thank her for everything she does for you and heed her advice by applying it to your own financial health.

 

Marifran Georgis, J.D., is an Assistant Vice President, Wealth Advisor & Trust Officer at Alpine Trust & Investment Group.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

 

1 comment

  • Suzie Shepherd | May 13th 2017 @ 7:36 AM

    Marifran, congratulations on a well written article full of advice. Happy Mother's Day. Enjoy!

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