The following article was written by Sheean K. Patel, a member of our Gift Planning Services Committee:
For centuries, people have studied Shakespeare for his wit and his wisdom. Back in June, I started sharing some of that wisdom in a new series called:
Shakespeare on Finance
Shakespeare never actually wrote about finance, of course. But I’ve found many of his lines contain important financial lessons. This month, let’s look at one such line from perhaps the most famous play he ever penned:
“Go wisely and slowly. Those who rush, stumble and fall.”
Romeo & Juliet, Act 2, Scene 3
In this scene, Romeo asks his mentor, Friar Laurence, to wed he and Juliet as quickly as possible. In response, the friar counsels Romeo to “go wisely and slowly. Those who rush stumble and fall.”
You can probably guess the lesson here: avoid the temptation to rush into rash, impulsive financial decisions.
Have you ever noticed how often people act on impulse? Advertising companies sure do. So do car dealerships, banks, and your local gym. In fact, every time you go to the checkout counter at a grocery store, take a moment to look at all those candy bars and tabloids strategically placed to take advantage of people’s impulsiveness.
Entire industries are built on capturing the human impulse. Most of the time these impulses are harmless enough, but the worst of them can have grave consequences. In fact, one of the greatest dangers to our financial health is that we don’t always think before we act. We rush into things.
Now, if you rush into buying a candy bar, it’s no big deal. It probably won’t have an impact on your overall financial health. But some decisions do have a major impact, and when people rush into them, it’s quite easy to stumble and fall.
Here are some examples:
- Major Purchases: Whether you’re buying real estate, a new car, or even that fancy new gadget that just came out, it’s so easy to be impulsive. To let the sensation of “want” override all other concerns. The result is often buyer’s remorse … or worse, debt.
- Taxes: Everyone hates filing their taxes, and everyone wants the process to be as quick and painless as possible. Unfortunately, quick and painless in the short term often leads to drawn-out pain in the long. Rushing through your taxes can lead to mistakes, and it usually takes much longer to correct mistakes than to avoid them in the first place.
- Investing: When making investment decisions, it’s easy to get excited about a hot new stock tip and decide to buy before the price goes up. It’s also easy to get spooked at the first sign of market volatility and decide to sell. Both can be very risky decisions.
Whenever you make an investment decision, it’s important you put in your due diligence first. Take time to research the investment you have in mind. Talk to an expert and get a second opinion. Read the fine print. The media often portrays investing as a frenzied sprint, but for most investors, slow and steady wins the race. Making consistent, unemotional decisions will serve you far better in the long run.
Friar Laurence’s advice isn’t just for star-crossed lovers; it’s for all of us. The fact is that when it comes to your finances, being hasty and impulsive can lead to missed opportunities, mistakes, debt, and other negative consequences. But those who “go wisely and slowly,” who take their time, who look before they leap, are well-positioned to achieve their financial goals faster than they ever thought possible.
As Shakespeare might say,
“For never was a story of more woe, than of the investor who made a financial decision too fast instead of slow.”
Next issue we’ll move away from tragedy by examining a line from one of Shakespeare’s comedies. In the meantime, have a great month!
Disclaimer: National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).
Sheean K. Patel, B.Com, CIM
Associate Investment Advisor
Patel Wealth Management Group / National Bank Financial