15 Minute Financial Advisor

Don't Invest


When the New York Yankees were preparing for the 1920 season, with the newest member of their team fresh of the train from Boston, they had to have a strategy to aid the conversion of the former Red Sox pitcher to a power-hitting outfielder. After 15 seasons in pinstripes, Babe Ruth’s legacy as one of the best to ever play the game was cemented. The Yankees’ leadership didn’t haphazardly move the pitcher to the outfield randomly. They wanted to make sure they had the right things in place to let the slugger thrive. As it turns out, their preparation worked, because The Babe led them to four World-Series titles.

What does baseball have to do with investing? Well, as a fiduciary financial planner, you’d think I would encourage everyone to invest money in the markets. In the long run, that’s probably true, but if you don’t have your bases covered, you could be setting yourself up for disappointment. Just like in baseball, I think there are three bases that you should cover in your financial journey.

First base: Make more money than you spend. It almost sounds too easy. If I only make X that’s the most I can spend, right? Credit cards, car, home and student loans can all be money that you spend that you didn’t make. Which leads to second base.

Second base: Worthless Debt. This is debt that you acquire by buying things that tend to go down in value. This could include credit card debt (not to mention the interest rates!), car loans, personal loans, payday loans, or anything else that doesn’t add value to your situation. In some places, you NEED reliable transportation, so maybe car loans aren’t worthless debt, but if you owe money to someone else, you’re allowing money to control you.

Third base: You need an emergency fund. It’s really not an option here. Without it, you may never get past second base. When an emergency comes up, you’ve got cash to cover it without whipping out the plastic and subjecting yourself to more debt. You guessed it, that debt puts you right back on second base.

Once you have your bases covered, you can invest fearlessly. Stock markets tend to be volatile, meaning they go up and they go down. Sometimes the market can drop suddenly like a roller coaster, but without warning. Volatility is part of the game, and you have to be prepared for it. If you’re living paycheck to paycheck, or have a bunch of debt payments to satisfy, that makes it hard to ride out the storms with your investments.

Another advantage of having your bases covered is that you don’t have to stretch for investment returns. Although The Great Bambino knocked the ball out of the park 659 times for The Bronx Bombers, you don’t have to swing for the fences with your investments. A strikeout in a major league career can hurt, at times. A strikeout with your investments can do serious damage to your financial well-being. Just taking what the market gives you can put you on a path to remarkable investing success.

HighTower Bellevue is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.

All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.

This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates.