At the end of our four-week WSJ Noted. Adviser cohort on the topic of personal finance, we asked our Advisers to reflect on the lessons they have learned that have shaped their financial lives.
Whether that is creating a healthy relationship to spending, living within your means or having open conversations about money, our Advisers share insights that can be useful at any stage of your financial journey.
PHOTO: ALEX GREANIAS
Alex Greanias
Private client investment associate; Naples, Fla.
Healthy spending is just as important as saving and investing in your overall financial plan. Learning how to enjoy the money you’ve earned includes spending it on things that bring you joy. I feel like it can be easy at times to spend too much on things that don’t add value to your life or spend too little on just the bare necessities. If you can budget for both your wants and your needs, you give yourself the freedom to enjoy spending money in ways that are most fun and meaningful to you.
PHOTO: ANDREW ESTELLA
Andrew Estella
Analyst; New York, N.Y.
A valuable money lesson that I learned was in relation to investing for the future. I learned that it is more important to be invested for a long period of time and really leverage the power of compounding, supporting the idea of investing as much as possible as early as possible to be in position for a future payoff. At the same time, this comes with risk and it is important to never invest more than you are capable of losing. While staying in the market will be beneficial over time, you must be comfortable withstanding drawdowns and bouts of volatility in the short term in order to reap the long-term benefit.
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PHOTO: Constance Beckford
Constance Beckford
Linguistics student; U.C., Berkeley
My money lessons came from learning what not to do by watching family members make poor decisions. Like a relative being in an abusive marriage but not being able to leave because she had no money to support herself. Or seeing older relatives still working menial jobs well into their seventies because they had no retirement plan or high-paying skills. I want to live abundantly and freely in all stages of my life with no money issues. And the only way to not care about money is to have plenty of it.
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photo: Dale Hall
Dale Hall
Actuary; Bloomington, Ill.
A few years into my career, I had the opportunity to join our company’s investment department to do projects that combined investments and actuarial analysis. For the first time ever, I received the coveted annual bonus check. The amount wasn’t huge but for someone accustomed to bi-weekly paychecks receiving this windfall was a challenge. I asked our Chief Investment Officer what a young person like me should do. He told me to take 25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of it and reward “Today Me” and use the remaining 75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of it and reward “Future Me.” I bought a nice new television for Today Me, and invested the rest to eventually make a down payment on my first house for Future Me.
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photo: Gabe Fisher
Gabe Fisher
Psychology and government student; Claremont McKenna College
There’s room for bulls and bears in the stock market, but not pigs. I’ve internalized this lesson from my lovely grandfather, a 93-year-old professional investment adviser who still follows the market. Its message is simple: don’t be greedy by buying something speculative hoping to make a quick buck. Buying such stocks is exciting and offers the possibility of rapid gains, and it can be difficult to temper these emotions. I, however, value delayed gratification. I try to practice prudence. Buy quality stocks and hold ‘em.
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PHOTO: Jennie Ebihara
Jennie Ebihara
College of Social Studies and Economics; Wesleyan University
Patience has always been my mother’s favorite virtue to pass down. This ethic was practiced in the little things of my daily life, whether that was by waiting for everyone to sit at the dining table before we ate dinner, standing in line for the train to come during rush hours, or patiently solving problem after problem to perfect a certain math concept. Thus, it was instinctual that patience became my formula to success in regards to money and investing. Especially as a young person who has the advantage of time, I’ve learned how accumulating passive/long-term investments by buying and holding securities for a long time is one of the safest and rewarding ways to compound wealth and learn about money.
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photo: Kaamilah Furqan
Kaamilah Furqan
M.B.A. student, Loyola Marymount University
When I was growing up, my Dad often said to me, “An ounce of prevention is worth a pound of cure.” This proverb has proven to be a valuable lesson that I apply to all aspects of my life, including personal finance. Both of my parents emphasized to me the importance of how the financial decisions you make today (such as budgeting, saving, building credit, investing, etc.) can impact your life in the future. As a freelancer and graduate student, I now understand the significance of taking actionable steps in properly planning and managing debt to reduce any long-term effects or challenges I may face on my journey to build wealth.
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photo: Kristen Fillmore
Kristen Fillmore
Wealth management advisor; Stockbridge, Mich.
One of the most valuable money lessons that I learned came from my dad. He taught it to me early in life, and it really helped to set me up with a good foundation for financial success. The lesson is somewhat twofold – put saving first, and live within my means. I learned to take at least the first 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of my paychecks and immediately put that into savings. For internships and summer jobs, before I was eligible for retirement accounts, that meant having a portion of my paychecks deposited straight into my savings account. Once I started my full-time career, I set myself up to defer over 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of my pay directly into my 401(k). This strategy helped me to live within my means because I didn’t get the chance to even touch that portion of my income. I also didn’t have to really consciously think about saving because once I had myself set up, the savings would automatically occur from my paychecks.
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PHOTO: Peter Zhi
Peter Zhi
M.B.A. student, NYU Stern School of Business
I was introduced to passive investing in index funds right out of college by a good friend. Passive investing is a great way to build wealth over time with minimal effort and risk, especially for young professionals who can take advantage of the compounding early on. It can also be an excellent gateway to active, algorithmic investing for those more inclined.
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photo: Sadia Ayaz
Sadia Ayaz
Cultural anthropology and biology student; Duke University
A mentor once encouraged me to take an active role in learning about personal finance. I found myself gravitating toward articles and having conversations with the people closest to me. When you begin your professional career, concepts such as “401(k)” or “Roth IRA” can often seem foreign. As we discussed in the cohort, educating yourself about retirement funds at an early age can have a huge payoff down the line. While each individual’s financial journey is different, an attitude of constant learning about personal finance is universally meritorious.
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photo: Tyler Corso
Tyler Corso
Associate product manager; Oakville, Ontario
Regarding money and spending, I was taught a valuable lesson about credit cards from my mother, who originally learned it from her father. If you do not have enough money in your bank account to purchase something without a credit card, you cannot afford to purchase it. The lesson here is to avoid overspending using a credit card just because that money is not due today. By treating the balance like it is due today, it helps to curb spending and alleviate future issues with credit card debt.
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