My mother passed away about a year ago at the age of 93. She had 11 children, so there was little free time for herself. As a result, late at night she could often be found at her desk putting together a puzzle. It was her personal break from life that she deeply loved.
One night, at the age of 9, when I couldn’t sleep, I sat beside her as she dumped a new puzzle onto the desk. She invited me to help her put it together and the experience taught me much about life and even a few things about my future career. A hobby that seemed as insignificant as assembling a puzzle took on more meaning as she walked me through the process.
Her first task was to separate out all the edge pieces. As a child I was excited and impatient to find two pieces that fit together, but she quietly taught me that before you could build a puzzle you had to understand the boundaries. Reluctantly, I calmed down my naturally impatient self and helped her find those pieces with a straight side on them. By assembling the border first, she taught that we would have a better perspective of the ultimate size of the puzzle as well as the general areas where the remaining pieces would go.
Financial matters require boundaries. Especially when I work with younger investors I find they can be all over the place in their ideas. They want to buy stocks, real estate, crypto, trade options and others while forgetting that they may only have $300 available. They are so excited to charge out of the gate and become great investors that they forget that everything in life needs boundaries. How can they know where all the pieces go and how they fit together if they don’t first understand their limitations? In time you can move on to larger and more complex financial puzzles, but success happens one puzzle at a time. Understand your boundaries and available resources and then work within them.
After my mother and I completed the border I could clearly see the ultimate size and scope of the project. That information was useful. At this point she taught me to organize the remaining pieces into small piles based on color and design. We put blue sky pieces in one spot and mountain pieces in another, etc.. It was tedious, but she wanted me to know that getting a general idea of where the puzzle pieces would land in the scene would make our task easier.
Many view money in its entirety, thinking things like, “I have a million dollars.” I have learned to view money more as what it can do for someone than as a total number. I see money grouped in individual piles based on its specific purpose. When planning with people I help them separate their money by asking questions like, “When will you need this money and what will it do for you?” We group money based on what is needed for short, medium and long-term needs. By separating the money into its individual purposes, the way to invest each pile starts to make more sense. For example, the money you need to pay your immediate needs over the next six months would be invested differently than your retirement pile, especially if you are very young. Short-term volatility becomes less of an issue for a long-term growth pile than a shorter-term needs pile.
Having several piles in your financial puzzle helps you to focus better and reduces investor stress. Rather than having daily concerns such as “My account is down or my account is up,” which really serve no purpose, the investor can focus on having enough stable short-term funds for immediate needs while paying less attention (and worry) about the volatility in the long-term piles.
After my mom and I separated the pieces into their similar piles, we began the fun work of putting it all together. I found this process to be a little less structured. I might work on the sky while she worked on the village, but while doing so either might grab a random piece and add it to the others’ work. It became an organized process mingled with random experiences of discovery. I found I might look for a specific piece for ten minutes and then suddenly find two or three pieces quite suddenly.
And so it is with a lifetime of investing. It is both a process of diligent planning as well as one of random surprises. Sometimes challenges slow things down and other times things happen in rapid and exciting ways. All the while you remain an active participant, always ready to take advantage of an opportunity or to labor with a challenging piece until you find the solution.
I think what my mom loved most about puzzles was knowing that, despite the challenges, if she never gave up she would eventually enjoy the reward of a beautifully finished picture. The walls of her home were covered with completed puzzles as reminder of her long hours and eventual successes.
Many people view investing and financial matters with fear and uncertainty. Though advisors are largely prohibited from making guarantees due to the unsure nature of life, I have generally found after a lifetime in the industry that money is more predictable than most think. The accumulation, growth, and eventual spending down of money follows principles of math and life that though not guaranteed, I have found to be fairly dependable. Sure, as with building a puzzle there will be times when you may be frustrated for a time, but there are also exhilarating moments of fast-paced success. In the end it has been my experience that those who formulate a plan, set boundaries, organize their assets, and apply principles of financial success properly, generally find success greater than they anticipated. It has always been a thrill for me to walk people through the process over their lifetimes as they watch their beautiful financial puzzle come together.
Dan Wyson, CFP® is a long running national financial columnist, author of several books and CEO/Founder of Wyson Financial/Wealth Management 375 E. Riverside Dr. St. George, UT 84790 – 435-986-9525 Securities and Advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment advisor.
