The dictionary lists the definition of investment as “the action or process of investing money for profit or material result; a thing that is worth buying because it may be profitable or useful in the future.”
As we begin a new year it is always a great time to review your portfolio, determine if you need to make any changes, and setup a plan to implement those changes for a great start to 2019. If you are not sure you have the time or energy, consider this: a house is the largest one-time investment most households will make and it is estimated that the average American only spent eight hours this year on the process of buying a home. That seems like a relatively short amount of time – and it includes shopping for their mortgage financing. Compare that to the average of less than two hours spent on individual finances and it is very clear that many of us struggle with the lack of time – or we are not sure where to start.
If you are planning to review your investments, we think that there is a very important Hebrew proverb to keep in mind, King Solomon said, “Diversify your portion amongst seven or even to eight, for you do not know what disaster may come upon the land.” 401k plans have become our primary method of saving. However, most feel that they have too much of their wealth in the stock market. Because of the limited options in their employer’s retirement plan, I regularly hear people say they would like to diversify into other tangible assets like real estate, rental properties, energy, and even livestock. If that is you, you may want to research a Self-Directed IRA.
While it is easy to default to financial definitions of investments, we sometimes forget that “an act of devoting time, effort, or energy to a particular undertaking with the expectation of a worthwhile result” is also a definition of an investment. Consider the concept of an outlay of resources now to achieve an outsized return later. Would a financial outlay in your education be beneficial to your future? Do music lessons and sports activities just get your kids off the couch, or do they provide valuable lessons to help build confidence, develop new talents, or learn valuable social skills? Maybe the best investment you can make is to spend a few extra hours with your loved ones over a silly board game, a frustrating puzzle, or by visiting a friend that has recently experienced a loss.
Wherever you are in the process of investing, we hope you have a blessed start to the New Year. If you would like to know more about our approach to expand the investment horizon beyond stocks and bonds, we encourage you to call and schedule a complimentary review today.