Prepare For Days of Need

Why should we prepare for “Days of Need.”  This is another way of saying, save your money for the future.

You might need it to pay for a college education, or for medical emergencies, or to simply live upon in retirement.   And unfortunately, we have to remind clients about their “days of need” when the markets are volatile or going lower.  And what we can control, and what we cannot control.

When folks ask questions (especially questions like “what do we do NOW?”), they generally do NOT like being “answered” with a parable or riddles in reply to their question.  It’s old fashioned (and weird!).  Please don’t speak in riddles, just answer my question!

And sometimes folks who speak in parables, riddles seem a bit intimidating.  Maybe these folks ought to be under a doctor’s care?

The past few days, the news was everywhere regarding BRExit and the market fallout.  I’ve been thinking about what to say to clients about BRExit and the market turmoil.   Not to deflect the question, but I wanted to remind callers — THEIR job is to “prepare for days of need.”  Save your money aggressively!

And while thinking about what to say, I happened to stumble upon one of Aesop’s fables.

I couldn’t help but think about telling callers this short fable.  It might help put the recent news in perspective for them.  See, most of the assets we manage are long-term in nature.  In fact, a large percentage of our clients are investing for retirement or a significant event (like paying for college).  A period of time which may be ten, fifteen or twenty years or more in the future.

An event like BRExit rattled the stock markets around the world.  BRExit really ought to (hopefully) have little effect on long-term portfolios.  The rest of the world has been getting completely wrapped up in (and distracted by) the day-to-day drama and news.

Events like BRExit are completely out of your control.
Sometimes it’s important to tune all that out and focus on what YOU can do.

What can you do to help you reach a future goal?
– Save more money.
– Live beneath your means.

With that in mind, I share the story of the grasshopper and the ant:

In a field one summer’s day a Grasshopper was hopping about, chirping and singing to its heart’s content.
An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.

“Why not come and chat with me,” said the Grasshopper, “instead of toiling and moiling in that way?”
“I am helping to lay up food for the winter,” said the Ant, “and recommend you to do the same.”
“Why bother about winter?” said the Grasshopper; “We have got plenty of food at present.”

But the Ant went on its way and continued its toil.

When the winter came the Grasshopper had no food and found itself dying of hunger – while it saw the ants distributing every day corn and grain from the stores they had collected in the summer. Then the Grasshopper knew: It is best to prepare for days of need.

The funds we manage are typically assets our clients will need to LIVE on in retirement, or they are counting on us to grow the money and protect it — to make certain it is there when they need it.  We work like the ant in the fable to do the best we can to build for the future.  The day to day “noise” which distracts the grasshopper — just like events making the day to day markets volatile, do nothing but take our eyes off the goal.

Work on what we can control: defining a goal, saving for the future.
And preparing for “days of need.”