By Dr. Jason White
Director of Investments
Family Investment Center
This is the first of a three-part series of columns dedicated to fostering certain financial character traits. We have all seen these behaviors in others as well as ourselves.
Responsibility is defined as “taking ownership of what you say and do.” Likely, we all probably need to save more than we do, and we certainly are masters at preaching to our children regarding the merits of saving for future goals and for the challenges in life. We talk about Responsible practices like: saving for a rainy day; saving for retirement; having a cushion of savings in the event of job loss or disability; saving for the college expenses of our children or our children’s children, etc. Are we practicing such financial discipline in our own lives by taking Responsibility for our personal or family savings program?
Respect means “treating others with courtesy and honor.” Do we look down on others who may not have the asset total we do? Does our bankroll give us a right to be snooty, rude or elitist? Certainly not! We were born into this world naked, and we shall exit it the same way when our time comes. While we are here, we should strive to treat all persons with Respect, regardless of financial position or other material difference.
Self-control refers to “having control over one’s actions, words and emotions.” I see this as a close cousin of Respect, but it could also refer to our demeanor regarding our investments. Are we riding high when the stock market does well and in the doldrums when the Dow is not as rosy? Do we trade frivolously or attempt to time the market through such futile activities as day-trading and the like? Do we chase the hot stock tip or try to find a get-rich-quick scheme? Financial self-control means having a long-range financial plan and sticking to it, regardless of the distractions and temptations that may come along.
Citizenship is “being loyal to your school, community and country.” Are we good Citizens as investors? Do we always vote our stock proxies, or do we cast them into the wastebasket, leaving the task of board oversight to other shareholders? Evidence indicates most of us choose the latter. A good corporate (shareholder) Citizen takes an active interest in the investment position(s) s/he holds and is educated about what those investments are designed to do – and what they are not designed to do as well.