Your Investments: Turning Rosh Hashanah reflection into financial action

The summer is over, the children are back in school, and suddenly we are confronted with the reality that another year has passed.

For many, Rosh Hashanah is primarily about honey cake, apples and honey, synagogue, and family. But there is also another theme that runs through the day and deserves our attention: accountability.

Rosh Hashanah is the Day of Judgment. One of the most powerful descriptions of this appears in the Unetaneh Tokef prayer that we recite during the Musaf service.

The prayer describes God as reviewing the actions of every individual: “You cause to pass, count, reckon, and are mindful of” every living soul.

It then famously declares: “On Rosh Hashanah it is inscribed, and on Yom Kippur it is sealed.”

Count, reckon, mindful

The prayer goes on to ask who will live and who will die, who will be wealthy and who will be poor, who will enjoy tranquility and who will suffer.

The language is striking. “Count.” “Reckon.” “Mindful.” There is an accounting taking place. That should sound familiar to anyone who has ever sat down to review a financial plan.

At the end of each year, businesses analyze what occurred over the previous 12 months. They look at revenue, expenses, profits, losses, assets, and liabilities. Investors review their portfolios. They examine what worked, what didn’t, and whether their investments are still aligned with their goals.

Why shouldn’t individuals do the same with their personal finances? The run-up to Rosh Hashanah provides a perfect opportunity for financial reckoning.

The Rambam makes the connection between Rosh Hashanah and accounting even more explicit. In Hilchot Teshuvah 3:4, he explains that a person should view himself throughout the year as if his merits and sins are equally balanced. One additional sin can tip the balance toward guilt, while one mitzvah can tip it toward merit. The Rambam describes the shofar as calling to “inspect your deeds, repent, remember your Creator” and improve our ways.

Of course, Judaism’s accounting system is not the same as a brokerage account. We can’t put our acts of kindness into an Excel spreadsheet and assign them a dollar value. But the underlying message is powerful: We are expected to take stock.

Before making financial resolutions for the coming year, take a few minutes to look backward.

What was your income? Expenses? Did you take on debt? Did you save enough for retirement? Did you invest according to a plan, or just chase hot stocks? And perhaps most importantly: Did your money actually help you accomplish what matters most to you?

That last question is often overlooked.

Money as a tool

Financial planning isn’t simply about making as much money as is humanly possible. Money is a tool. It is supposed to help us provide for our families, educate our children, retire with dignity, give charity, and live according to our values.

Think about someone who has a great salary but spends every dollar. On paper, the income looks impressive. In reality, the person may be moving backward. Conversely, someone who earns less but consistently saves, avoids unnecessary debt, invests prudently, and gives generously may be building a much stronger financial future.

That is why an annual financial review is so important. These are the financial equivalents of examining our deeds.

There is another important lesson in the Rosh Hashanah message. The purpose of the accounting is not simply to look backward. It is to change the future.

The Unetaneh Tokef concludes its frightening description of judgment with the famous words: “But repentance, prayer, and charity avert the severity of the decree.”

That is a remarkably optimistic message. We are not being told that the past is irrelevant. Rather, we are being reminded that the future is still in our hands. The same is true with our finances. Maybe, last year, we spent too much, didn’t save enough, and took way too much investment risk. The good news is that we can change. Financial accountability isn’t about beating ourselves up over past mistakes. It is about learning from them.

Let’s use the opportunity of the new year to get back on track financially. Take out statements. Look at the numbers. Review the goals. Examine the spending. Check the investments. Discuss the coming year’s major expenses. Decide how much will be saved and how much will be given to charity. And then make a plan.

Rosh Hashanah reminds us that every year matters. We don’t know what the coming year will bring. But we do have an obligation to make responsible decisions with the opportunities and resources we have.

The goal of an annual financial review isn’t to predict exactly what will happen in the markets or in life. Nobody can do that. The goal is to make sure that when we look back a year from now, we can say that we made thoughtful decisions, followed our plan, and used our resources wisely. That may be one of the most practical ways to translate the message of Rosh Hashanah into our everyday lives.

Shana tova! May we all be blessed with a year of health and happiness, and may our prayers be answered with mercy and favor.

The information in this article reflects the writer’s opinion and not necessarily that of Portfolio Resources Group Inc. or affiliates.

The writer is author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing and a licensed financial professional in the US and Israel. For more information: (02) 624-0995, www.aaronkatsman.com, aaron@lighthousecapital.co.il.