As some of you may know, the referee of a boxing match gives the fighters instructions, in the dressing room, before each bout. This is true at both the amateur and professional levels. I believe these instructions serve as important reminders, in keeping with a long tradition.
The very first instruction is always “Protect yourself at all times.” One might reasonably question why two people who have shown up for a fight might need to remember that.
What is less obvious is that boxing matches have rules which, believe it or not, are almost always followed by the combatants. That can lull fighters into a false sense of security and make them vulnerable on the rare occasions the rules are broken. The best defense against the harm of something unexpected is to remain alert and protect yourself at all times.
Speaking to this concept, I had an enlightening conversation recently with a friend, that reminded me of my boxing days and specifically, the first instruction. He lives out of town and his parents are approaching an age where they might begin to need some assistance around the house. Being of a thoughtful and careful bent, he reviewed their homeowners and umbrella policies to confirm that they would be covered in the event someone working there suffered a slip and fall or other accident.
What he read in those policies did not provide him with the complete peace of mind he was looking for. Speaking with a representative of the property and casualty company carrying the policy was not particularly helpful. The good news is that after a week or so of speaking with various companies, and with a bit of assistance from yours truly, he did find the right company and coverage.
My thoughts then turned to you good folks. I imagine many of you have cleaning people that come into your home, office, or shop, from time to time. Perhaps you employ landscapers or maintenance people. Take a look at your homeowners, business and umbrella policies. If you like, I can look with you.
I hasten to add that I am not a licensed property and casualty insurance agent. I am just a conscientious person like you all. But I care about your results in life and want to help any way I can. Remember, wealth building is a multi-faceted endeavor. One if its most crucial aspects is keeping the wealth you have built.
Warren Buffet’s partner Charlie Munger, a multi billionaire in his own right, said “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
We tend to view investing as a game of gains. We wonder how much we will make on our investments. Of course, we hope the answer is “a lot.” Gains are measurable. We can compare where we were to where we are and know something about our progress.
There is, however, no column, table, or graph that shows us how much loss we avoided by ‘being consistently not stupid,” as Munger puts it. But I promise you that avoiding losses are every bit as important to long term prosperity as gains. Perhaps even more so, given that one catastrophe can wipe out a lifetime of effort.
Last Friday there was an article in The Guardian by Maya Yang titled “The vast majority of NFTs are now worthless, new report shows.” It goes on to say, “Two years after tech trend that swept up artists and celebrities, researchers estimate 23 million people hold worthless investments.”
I will not belabor this point except to say that these losses were infinitely avoidable, and I wrote about my thoughts on them in several posts. I have included the links to both posts below.* Please note their dates.
When it comes to saving and investing, we must think like boxers and protect ourselves at all times. According to a January 25th article in Fortune magazine*, 57% of the country does not have $1,000 in savings. Though I suspect a great many of them do have cars, streaming TV service, and the latest smart phone. Sadly, these folks are not in a position to help themselves should fortune turn against them.
With financial planning, the time proven ways are the best ways. Effective long-term saving should focus on sober and steady results. Put aside thoughts of El Dorado. This will help you avoid the next “big thing” that will end up on history’s trash heap with all the other next big things like NFTs. Instead, make your motto “Little and often over the long haul.” It works.
If you would like to discuss any of these concepts, pleased give me a call. I am here to help.
Scott R. McGimpsey September, 29th 2023
This material was prepared by Scott McGimpsey and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Neither Cetera Advisor Networks LLC nor Scott McGimpsey is engaged in rendering legal, accounting, or other professionally services. If such assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any federal, state, or municipal tax penalty. Moreover, a diversified portfolio does not assure a profit or assure protection against loss in a declining market. UNIFIED PLANNING GROUP is an independent firm.