Financial Strategies

Investing 101: Don’t look for instant gratification


The media continues to satisfy our need for instant information, but how much is too much? Many folks tell me they are on information overload. Also, some news stories can make you feel inadequate if you don’t understand all the acronyms they use. Instead of empowering us as investors, this tweet type of news snippets that appear all day long on your phone or computer are not helping, they may actually be hurting your chances of being a good investor.

Legendary investor Warren Buffett defines investing as “… the process of laying out money now to receive more money in the future.” My simple definition is to take risk now for future return. This would indicate that reward is not instant but takes time. This could be the disconnect from what we expect in our daily lives, which is usually instant gratification in everything from our first cup of coffee to accessing the internet. Investing is putting money to work over time. This may be why it is so hard to stay committed to a strategy or plan if we don’t feel we are getting rewarded instantly.

Do you look at the stock market more than once a day? Do you look at your investment accounts more than once a month? If so, you too may have fallen in the trap of thinking you should see results quickly. This can backfire if you make decisions to abandon a certain investment if it has not performed in the first month, quarter or year. This is where knowledge around portfolio construction could be helpful. It can help determine how many short, intermediate and long-term assets you need. It probably doesn’t make sense to look at the long-term holding (meaning 10 years plus) every day or even every month. This could cause you to sell prematurely and miss out on future benefits.

It is important to understand at least the basics before you invest. Learn about paying yourself first by saving each month off the top of your paycheck instead of waiting to see if anything is left over after you take care of other expenses. Review lessons in compounding and how that takes time to multiply your balances. Revisit inflation and how that works against you and how even nominal inflation adds up during your lifetime.

The next step is to identify goals and resources, and only then is it appropriate to start building a strategy for investing.

Sometimes long-term goals lack incentive in this instant society, so consider this example of eight percent compounding: It requires investing almost $3,000 per month for a 50-year-old to attain $1 million by age 65. However, it only takes $190 per month for a 20-year-old to attain the same amount by 65. In this example the 50-year-old would have spent an additional $417,600 to reach the same goal.

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t pays it,” says an aphorism that some attribute to Albert Einstein.

Watch for the next Investing 101 workshop to help you get on the right path to investing — one will be hosted at the Highlands Ranch Mariner office on Aug. 28. Please call to RSVP: 303-470-1209.

Patricia Kummer has been a Certified Financial Planner and a fiduciary for more than 30 years and is a managing director for Mariner Wealth Advisors, a Registered Investment Adviser. Please visit for more information or refer to the Investment Adviser Public Disclosure website ( Securities offered through MSEC, LLC, Member FINRA & SIPC, 5700 W. 112th Suite 500, Overland Park, Kansas 66211.

Patricia Kummer


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