{"id":379,"date":"2015-10-19T16:56:09","date_gmt":"2015-10-19T16:56:09","guid":{"rendered":"https:\/\/www.pamkrueger.com\/?p=379"},"modified":"2018-12-20T14:15:37","modified_gmt":"2018-12-20T14:15:37","slug":"am-i-investing-gambling","status":"publish","type":"post","link":"https:\/\/www.pamkrueger.com\/am-i-investing-gambling\/","title":{"rendered":"Am I investing or gambling with my kids’ college money?"},"content":{"rendered":"

Let\u2019s face it, not many people devote much time to learning how to invest their hard-earned money. It\u2019s not really that fun and not at all entertaining to watch your kids\u2019 college investment fund go up, up and– then down, down. (Sorry CNBC). The reasons we invest money in the stock market may not be so obvious. One of my best friends is divorced with two adorable kids. \"gambling\"They live in a comfortable, albeit, tiny family house. As a single mom, you know my friend\u2019s on a tight budget. I\u2019m impressed because this woman is brilliant at balancing her volunteer commitments, playing sports manager and working two days a week as a graphics designer. On top of all that, she has a vibrant social life. The glass is always half-full in her\u00a0view. Now I\u2019ve been in the business of helping people understand what works when it comes to investing and managing money for years. And I\u2019m pretty good at keeping that conversation simple. So about a month ago the stock market had its biggest drop in four years, and of course, the word panic was repeated across every newscast and news website. On that particular day my good friend blurted out something about investing that I\u2019d never heard before, and it stopped me in my tracks.<\/p>\n

She said she\u2019s out of the stock market. The headlines are making her sick, and so much drama makes her even less confident about having her serious money in the market. Overwhelmed by the rhetoric, she ranted on that she needs guidance but has no idea who to trust for advice. She\u2019s asked, \u201cwhy Bother to invest?\u201d What\u2019s the point? She told me her hard earned savings\u2014more than $300k from her retirement accounts and divorce settlement is safe in the bank. It doesn\u2019t earn any interest, but it isn\u2019t losing anything either.<\/p>\n

She said, \u201cLook, all I want is to make sure I\u2019ll have enough so my kids won\u2019t have to take care of me financially when I\u2019m 80. That\u2019s it. That\u2019s all I want to know.\u201d<\/p>\n

It dawned on me then and there. She thinks investing is something people do because they want to \u2018play the market\u2019. To those people investing is a sophisticated game. Clearly, she doesn\u2019t SEE herself as an \u2018investor\u2019.<\/p>\n

What she doesn\u2019t see is that she is a real investor, and she\u2019s investing for the best possible reason, to take care of the ones she loves, and given how much taking care of her family means to her, she has as much skin in the game as Warren Buffett.<\/p>\n

Reframing how we talk about investing<\/strong><\/p>\n

These insights inspired me to start a movement to change the paradigm about how we talk about investing, and by extension, how we think about investing. Let\u2019s reframe the conversation. Instead of viewing it as race to amass the most money, or appear to be in-the-know, let\u2019s make it about how investing helps us take care of our families. If you can learn how to pack your kid\u2019s lunch boxes, you can learn enough of the basics to build the right college investment portfolio. Investing by its definition is delayed gratification. The payoff comes only after you\u2019ve developed the habit of adding steadily to your stock accounts. Wealth builds slowly over really long periods (as in at least 10 years) of time because over the decades stock prices (and your savings) rise more than they fall. You\u2019re participating in that growth. That\u2019s how wealth happens. The rest is simply taking time to get the right mix of investments to align with your temperament and your long-term goals.<\/p>\n

Speaking of goals\u2026Women, especially are\u00a0all about relationships<\/strong><\/p>\n

Talk to a woman about money and notice how many times the phrase \u2018financial security\u2019 comes up. For us, our kids, and for those in the sandwich generation, it\u2019s making sure our aging parents are comfortable financially. Investing is about taking care of any longer-term priorities and in turn, that reduces the stress around immediate money issues. Those are true financial goals and real reasons to invest.<\/p>\n

Getting to your \u201cwhy\u201d<\/strong><\/p>\n

If you\u2019re having trouble identifying what motivations resonate for you, you might like to try a technique called The Five Whys originally developed by Toyota to help engineers uncover the root causes of problems.<\/p>\n

To try it out, think of an important financial goal. Then ask yourself, \u201cWhy?\u201d and do it five times, progressively getting deeper into your motivation.<\/p>\n

Here\u2019s an example:<\/p>\n