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Very soon, Joe, the plumber, will say good-bye to his twenty minutes of fame and return to his real calling, unclogging drains and fixing leaky pipes. Joe’s absurd rise to notoriety made me think of the real unsung heroes in our communities who earn their living working with their hands and their hearts. Their voices are rarely heard, but their observations about life could provide some of our greatest wisdom.

Unlike Joe, who was American born, Louis the barber, my hair cutter for over 16 years, came to this country from Italy as a teenager. Now the barbershop, of course, is as American as you can get, especially for those of us who grew up watching “Andy of Mayberry”. We learned that this was one of the greatest hangouts for men to talk politics, sports and other timely topics.

Because Louis knows that I was a financial planner, he has always shared his very engaging views on the differences between American and European philosophies when it comes to money and investing. As soon as I sit down in his chair, he turns on CNBC, we listen to the hosts and their guests, and then exchange ideas on the stock market, the economy and investment strategies.

I learned immediately that today’s American thinking is vastly different than the old world European views, and in spite of my education and my over thirty years of experience in the financial field, I do believe that Louis knows what he’s talking about. First and foremost, his sage advice on investing is that you must take the long view and not be concerned or affected by the daily fluctuations of market prices.

This belief system likely stems from the fact that in Italy, for example, homes and properties are almost never sold. They are passed down to the next generations so that their value continues to increase in both financial and familial terms. This also means that if the economy slows down, they are not at risk because they have no intention of selling off their prized investments. They trust that over time, the economy will turn around and values will continue to climb. The same is true of investing in stocks and bonds. Once the money is allocated, it stays put until absolutely needed. There is no reason to gamble hard earned assets by looking for quick fixes or following “too good to be true” stock tips.

Interestingly, like many immigrants, Louis raised his family here in America and his children’s views on finances are so different. They only know from loans and credit cards, from borrowing for everything from cars to college, and of course, home ownership. Recently his son got married and he and his new wife are hoping to buy a house. But Long Island’s housing market has always been one of the priciest in the country and first time buyers must often turn to families to make the down payments.

Louis said that he told his son that there was a silver lining to this latest economic downturn. Because of the
gyrating market and lower interest rates, borrowing is cheaper and housing prices are coming down enough that buying a house here could be affordable.

Louis is also feeling positive about continuing to invest in the market, in spite of the declining prices and all the uncertainty. Over the years he has seen stock prices soar to a point where they were totally unavailable to the average investor, let alone to someone who was just starting to earn a living and whose living expenses didn’t leave them with much money to “play the market.”

Now, however, he is excited by the fact that he is seeing great companies on the exchange who have been around for thirty, forty and fifty years, with selling prices he hasn’t seen in over a decade. This is the first time he feels that he can afford to buy in and he plans to take advantage of the “outlet” prices, like the guys who wait all year for the half price sale on Armani and other designer suits. He is especially excited because his retirement is ten years off, and now he can ride the next wave of prosperity which he knows from his father and his father before him, will definitely come.

Louis, the barber, is also sure that there are many lessons to be learned from these tough times. He is urging
everyone not to be frivolous, not to spend more than you can afford, not to rely so heavily on credit cards and not to burden yourself with so much debt that you can’t save for college, plan for your retirement or enjoy the good life.

Looks like the wisdom from the barber’s chair is as first rate as his trim.

Thanks Louis.

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Tags: buying low, cfp, college savings, debt, down market, home ownership, lee rosenberg, money, personal finance, retirement

About the Author: Lee Rosenberg is the Co-founder of ARS Financial Services, Inc. As a Certified Financial Planner with more than 34 years of solid financial expertise. Lee is a registered representative of Cadaret, Grant & Co., Inc. He was also named one of the top 25 Independent Financial Advisers in the US by Rep magazine.

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