When I was 18, my mom gave me a sum of money she had been investing for me since I was around 4 or 5 years old. For most, it wouldn’t have seemed like much, but as a college-bound teenager, I felt rich.
By the end of my freshman year, I had spent every penny on exactly the things my mom had warned me not to. She was deeply disappointed, and while it took me a long time to reflect on the experience, that moment fundamentally shaped my mindset toward money and spending.
This article is written by John Savarino, an Investment Adviser Representative with Rooted Wealth Advisors, Inc. He has experience in wealth management and tax planning and brings a transparent and client-first approach to retirement planning.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
It taught me that financial security isn’t just about how much money you have; it’s about how you manage it and the discipline you apply to it.
The psychology of money and emotional investing
Emotions are often the biggest threat to financial security. Fear and greed are powerful drivers, pushing investors to buy high when markets are soaring and sell low when panic sets in. This cycle can be devastating to long-term wealth.
Behavioral finance studies have shown time and again that making investment decisions based on short-term emotions rather than long-term strategy leads to underperformance.
I’ve always been a fairly analytical person, relying on data and historical trends to guide my decisions. Markets have cycles, and statistics overwhelmingly show that staying calm and trusting your investment strategy is the best approach.
This mindset has helped me avoid the knee-jerk reactions that can derail even the most well-thought-out financial plans.
Helping clients find clarity and control
There is often a negative perception of financial advisers — that we’re just looking to profit from someone else’s hard-earned money. I’ve heard it all. But the reality is that many advisers do care about their clients and their financial well-being. One client story in particular stands out to me.
I met with a woman who had gone through a messy divorce several years prior. By the time she came to me, she had spent hundreds of thousands of dollars and was on the verge of financial ruin.
It wasn’t that she didn’t understand money; she just needed someone to help guide her and provide a structured plan. She needed an adviser she could trust, someone she felt comfortable sharing her fears and challenges with.
Two years later, her financial trajectory has completely turned around. She is back on track and now on the path to retirement.
Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.
Seeing transformations like this is why I do what I do. Whether it’s helping a generationally wealthy family navigate complex tax and estate planning or guiding someone just beginning their financial journey, the goal remains the same: to provide clarity, confidence and control over their financial future.
A simple yet powerful investment philosophy
The key to financial security isn’t chasing the next big stock or reacting to every market movement — it’s having a plan and sticking to it. My investment philosophy is simple: focus on low-cost index fund ETFs.
While I do own individual stocks, they don’t represent 100% of my portfolio. Diversification, cost-efficiency and a long-term approach are what drive sustainable success.
How to cultivate a secure financial mindset:
- Trust the data. History shows that markets reward patience. Rather than making impulsive decisions based on short-term market fluctuations, focus on long-term trends and fundamentals.
- Have a strategy. Set a plan and commit to it. A well-structured financial plan provides a roadmap that helps you stay on course, even in turbulent times.
- Seek guidance. Whether from an adviser or a trusted mentor, having an external perspective can prevent emotional decision-making.
- Learn from mistakes. Just as I learned from my experience at 18, financial security is a journey. Everyone makes mistakes, but the key is to adjust, learn and move forward with a smarter approach.
Achieving financial security isn’t just about making money; it’s about mastering your mindset. When you focus on discipline, strategy and long-term thinking, you create a foundation that withstands market swings and financial uncertainties. The goal isn’t just to grow wealth but to do so in a way that provides lasting peace of mind.
This article is not tax or legal advice. Consult with a qualified professional before implementing any strategies discussed.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Related Content
- Financial Planning: The Best Defense Against Financial Fear
- 11 Mindsets That May Actually Be Hurting Your Financial Progress
- A Simple Trick for Better Investing: Stop Timing the Market
- Market Turmoil: What History Tells Us About Current Volatility
- The Best ETFs to Buy Now
-
How to Thaw a Credit Freeze — and Why You WouldAs you shop for a loan or credit card, you must open up access to your credit reports.
-
Why Women May Want to Work Longer: It's About More Than MoneySingle women over sixty see the most benefit, but all older women should take note when deciding when to retire.
-
How to Thaw a Credit Freeze — and Why You Would
As you shop for a loan or credit card, you must open up access to your credit reports.
-
Why Women May Want to Work Longer: It's About More Than Money
Single women over sixty see the most benefit, but all older women should take note when deciding when to retire.
-
Preparing for the Worst: Retirement During a RecessionIf you're close to retirement and today's economic uncertainty has your stomach in knots, follow my parents' example. They made it through, and so can you.
-
Is a Robo-Adviser Right for You? The Pros and ConsFor many folks, robo advice can likely be fine. It's inexpensive and easy ... but also a little one-size-fits-all. More complex financial situations may need a human touch.
-
Stock Market Today: "Good Trump" Gives Dow 740-Point BoostFriday's headwind was Tuesday's tailwind, as President Trump's social media posts continue to drag and drive financial markets.
-
What Medicare Covers When You Travel in the US and AbroadMedical emergencies can happen at any time. Knowing what Medicare coverage you have, anywhere in the world, can help you avoid a massive bill.
-
Six Key Earnings Terms Every Investor Should KnowThis handy guide will help you understand some of the jargon in corporate earnings reports and why it is important for investors to know.
-
What Is AI? Artificial Intelligence 101Artificial intelligence has sparked huge excitement among investors and businesses, but what exactly does the term mean?
