Finance 12. Robert G. Allen: playing it too safe may be the biggest risk of all “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” Some excellent wisdom here, particularly for those of us whose stomachs get a little “urrpy” whenever news of market volatility picks up. Robert Allen spent a number of years as an investment advisor and real estate entrepreneur before eventually putting down the wisdomwhich he had gained, into multiple best-selling financial guidebooks. His wry observation about the source of wealth seems obvious to those of us familiar with how little we’re earning on savings accounts, GICs and short-term bonds right now. But there’s actually a very poignant insight about the concept of risk and reward in these words as well. In our quest to eliminate stock market risk, we don’t actually eliminate risk − we simply swap it out for the risk of outliving the money in our savings accounts. In your effort to avoid stockmarket volatility, we may end up accepting a rate of return that simply won’t keep up with inflation. In any one year, that’s probably not a big deal. But, over time, that steady, inevitable erosion of our purchasing power can be a significant risk, and can lead to a serious reduction in the funds available to fuel a long and happy retirement. Something to keep in mind if the market gets choppy in the months ahead and you find yourself tempted to cash out your equity positions for something a little less volatile. 13. Warren Buffett: money is important. But it’s not themost important. “If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster.” It’s fitting that the person whom many consider to be the wisest investor of all offers this, perhaps the most important financial wisdom that’s ever been expressed. Wisdom that’s definitely worth remembering as we approach that time in life when our thoughts turn to what we leave behind. In the months to come, we’re likely to hear about all manner of economic challenges, financial problems and stock market crises. In all likelihood, much of it will sound pretty important to pay attention to − and maybe a little scary, too. But no matter how important it sounds, such topics pale in comparison to the truly important things in life: our family and friends, our health, our important life goals, our reputation, the legacy we leave behind for the people and causes that matter to us. Sure, we should pay attention to investing and our portfolio, because it will always be a vitally important part of life. But it should never be themost important: it should never come to dominate our thoughts, control our lives or derail us from enjoying the friendship and love of those we care about. If you can remember this essential piece of wisdom, then you’ve not only become a wiser, more successful investor − you’ve become a wiser, more successful person as well. CSANews | WINTER 2021 | 31
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