Timms is one of the hardest working men I’ve ever met. I met him about ten years ago while visiting his company to offer financial planning and investment management services to the executives. He’s the security guard.
He knew I was meeting with the executives in the C-Suite but asked if I could meet with him in between my appointments. I told him I could, so we scheduled a quick meeting. When we met he informed me he had less than $1,000 to invest and he had to work two jobs to make ends meet. However, he just became eligible to enroll in the 401(k) plan and wanted some guidance. We discussed his options and selected five mutual funds based on his goals. We set up his plan to have an equal weighting to each fund.
In addition to selecting his investments we talked about the benefits of staying invested, investing monthly and rebalancing annually. Over the past ten years he’s followed the script. He’s also increased his annual contribution each time his company gave him a raise. The increases have been small but consistent.
I met with him recently and was surprised with his account balance. It’s twice the average balance in the plan and it’s rivaling those who make more money than he does. I was happy for Timms and his family.
Timms has become a good investor by adhering to time tested investment rules like allocating his investments correctly and saving his money. He’s a buy and hold investor who doesn’t get emotional when his account fluctuates because he can’t touch his money for another ten to fifteen years.
I look forward to my visits with Timms because of his enthusiasm for investing. He asks great questions and his knowledge of the market is increasing. We should follow his lead
Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. ~ 2 Corinthians 9:6
Bill Parrott is the President and CEO of Parrott Wealth Management an independent, fee-only, fiduciary financial planning and investment management firm in Austin, TX. For more information please visit www.parrottwealth.com.
Note: Past performance is not a guarantee of future returns. Your returns may differ than those posted in this blog and investments aren’t guaranteed. The name and job title have been changed for privacy reasons.