Personal Financial Lessons from Dad
his year has been rife with ups and downs – but one area that I’m sure we can agree to celebrate is Father’s Day. At Vahanian & Associates, we thank all of the dad’s out there for their support, guidance and perhaps quirky tidbits of advice along the way. Thinking back on my own childhood, I was lucky enough to have a father who was also a financial advisor (hint, hint… Jeffrey Vahanian) who very early on instilled some educational and very important financial lessons in me and my brother – and for those of you who know my dad, these anecdotes may sound pretty familiar!
- The Value of a Dollar – This very simple statement is one that has always stayed with me. The emphasis is placed not on a dollar’s economic value but instead on how hard so many people work to earn a living and provide for their family.
2. Compounding – This has to do with the process of asset growth through interest and dividends over time. Compounding can occur when your original investment generates earnings from your principal as well as interest and dividends from preceding periods. The outcome has the potential to be a snowball effect.
3. Automated Savings – If you have a 401(k) or 403(b), you may have established automatic contributions to your retirement account. The same thing can be done into a personal savings account. For some people, setting up an “autopilot” savings plan is the least stressful and most effective way to consistently save money.
4. Identifying Your Values & Beliefs – This comes from both my dad and mom, whom are believers in the power of adhering to personal values and your own code of ethics. Your values and beliefs have the ability to set the tone for your life and how you want to live it. This can be accomplished through many different paths and can also be expressed via your investment portfolio.
5. Never Stop Learning – My dad has a passion for academia and quest for learning, which I think he got from his father. I was taught, at a very early age, the power of knowledge and the importance of learning. This doesn’t have to stop once you settle into your professional career or eventually retire. Learning can be perpetual and does not have to be a moment in time.
Some of these themes may sound familiar because you’ve heard them from Jeffrey or maybe even from your own dad. So, with that being said, we may all be able to agree that parents can play a really big role in shaping our attitudes towards money as well as our behavior and habits related to financial matters. It is this foundation that can set the tone for the important financial decisions we make as adults.