Your Financial Advisor Will Create a Plan to Account for Your Risk Tolerance
In the U.S., the average salary for an entry level elementary school teacher is $36,019.1
As with most professions, it's true that teachers' salaries increase with experience and according to the National Education Association, the average public school teacher salary for the 2017-2018 school year was $60,483.2
But if we divide up a teacher's yearly salary by the number of hours they actually work, we can see how much teachers really make. Consider this: the Bill & Melinda Gates Foundation found that teachers work an average of 53 hours a week.3 And teachers don't receive overtime pay.
So, as a teacher, how do you feel when the stock market—and your investment portfolio—turns negative?
Teachers Are Not Gamblers
Let’s say you are a teacher with 15 years of experience and you did what seemed sensible and spent 15 years— and your hard-earned money—building a healthy retirement investment account. Then Wall Street nosedives and you’re down $10,000. Then $15,000.
Your palms sweat, your headache intensifies, and you start to snap at everyone in the room that gambling, not saving, can produce losses.
You decide that the investment game means risk, but you won’t stop until you win your money back and then some. You put more in the market. In a blink, you’re down another $25,000
What’s going on here—and what can you do about it? Are you a gambler or a longterm investor?
This scenario happens every active trading day for many who try to make investment decisions alone. The gambling world calls the scenario just described as going on an angry or emotional tilt, when you commence making unusual, sometimes wild and reckless, decisions out of frustration.
The same can hold true in the investment world, where going on tilt might mean a lot of bad moves: investing in companies without doing adequate research, liquidating your investments during a decline, or dumping a lot of your money into a cheap yet fragile penny stock with hopes of a quick rebound from a loss.
Gamblers Are Loners, Teachers Are Not
How can you keep your investing from becoming gambling? For one, most gamblers sit at the table alone and the emotion is all theirs. Investors need to take some of the emotion—and aloneness—out of investing for retirement.
Hire a financial advisor and make a financial plan to counter some of the risk. Financial advisors can share the research burden with you and come up with a plan to implement investments.
You might find an advisor especially beneficial when your investments fall in value: Many people who lose money during market declines liquidate investments while the market falls (sell low, in other words). Then they re-invest after the market recovers (buy high), making it almost impossible to save steadily for retirement or other goals. Remember it’s “buy low, sell high”—not the other way around.
A good advisor can show you historical figures indicating that if you stay the course and don’t sell in a panic, markets come back up. Third party analysis can help take emotion out of temporary market declines and help you stick to your financial plan.
Don’t let your investing turn into gambling.
You’re a teacher: Keep a level head, do your research and don’t go it alone.
Sources 1. CollegeGrad.com. Available at https://collegegrad. com/salaries/elementary-school-teacher. Accessed November 2019. 2. National Education Association. “Rankings of the States 2017 and Estimates of School Statistics 2018 .” April 2018. 3. Bill & Melinda Gates Foundation. “Primary Sources: America’s Teachers on the Teaching Profession.” 2012.