Financial Lessons From Mom That Built A Lasting Legacy

Elliot Kallen, President of Prosperity Financial Group, has won accolades throughout his career—he attributes those successes to his mother’s words of wisdom.

A high-paying job or a fancy Ivy League education doesn’t necessarily equate to financial know-how. Some of the most valuable financial lessons are taught at home from a young age and can be instrumental in building a legacy of financial stability and security.

Elliot Kallen, president of Prosperity Financial Group, has a successful history of assisting clients in reaching their financial goals. Prosperity Financial Group earned the Worldwide Finance Award for Most Trusted Asset Management Company in Northern California, and Kallen earned the Five Star Wealth Management award in 2020; he attributes those achievements to the financial lessons his mother gave him as a foundation at a young age.

A survivor of the Great Depression and the Auschwitz concentration camp, Kallen’s mother overcame unspeakable hardship in her life. To this day, her lessons of survival fortify Kallen as he enjoys what he’s built for himself, his family, and his clients.

The first of many lessons his mother passed down is to live below your means. In other words, he says, it’s unwise to spend the extent of your income on lifestyle-oriented expenses like flashy cars, clothes, and even a home, which can eat up your livelihood if you overextend yourself.

“Americans traditionally overspend their paycheck on a regular basis,” he notes. “Therefore we end up with many people who earn a lot of money, and end up filing for bankruptcy, especially in the world of professional sports.” The key takeaway from this error, he says, is to “learn to live humbly and with humility.”

Kallen’s mother also advised investing for the future and not letting yourself be too heavily impacted by past events.

“If this were a hockey game, you’d want to have your money invested in where the puck is going, not where the puck has been,” he says. “Most of us invest based on yesterday’s news, not tomorrow’s possibilities. You don’t want to zig-zag your way there and only chase winners. You want to be in front of the news.”

This aligns with another of his mother’s virtues that he regards as particularly relevant today: staying positive, even in the face of negative news. 

With front-page headlines littered with news of bank failures, the shrinking of the regional bank system, rising interest rates, inflation, and political turmoil, it’s important to look beyond the negative news of the day, Kallen advises. The 2006 Ronald Reagan Gold Medal Award winner explains that the tactic of buying and holding while others panic has proven to be a solid strategy over the last four hundred years or so, but doing so requires fortitude and patience.

“This goes back to the Middle Ages when, during the Napoleonic Wars, people always capitalized when the streets were running red,” he says. “When there is panic in the streets, you need to be the one with a strong, grounded head. So, you’ll be buying when others are selling and you’ll be selling, (even) when the buying no longer makes any sense (on the surface). Contrarian investing can be very profitable.”

One way to practice contrarian investing today, he says, is to explore the bond markets, which hit rock bottom last year.

“2022 was the worst year for bonds since 1929,” he notes. “Bonds tend to rebound off bad years, and it looks like interest rates are starting to peak. When interest rates peak and start working their way down, bonds shoot northward. You want to be in front of that and not buy bonds in June or October after they’ve gone up by 10 percent—being in front of that and owning them now before they’ve gone up at all.”

Finally, an all-encompassing piece of motherly advice from Kallen’s mother: prepare for a rainy day.

“Life does not work in a straight line, and you may have failures and illnesses that require funds that you didn’t plan for,” he says. “It’s important to have a dedicated emergency fund for a rainy day.”

He adds that thinking long-term and positioning your portfolio for future growth may end up being the best winning strategy, standing in contrast with current headlines. Kallen stresses that some of the most valuable lessons in life, financial and otherwise, can be learned from our elders. Having applied his mother’s advice to real-life situations to sustain financial well-being and professional success, Kallen says his industry accolades and his clients’ security offer proof that mother may, indeed, know best.

Written in partnership with Shannon Sparks