I received a text from a young man who wanted help with his investments. Jackson is in his early twenties, married, and a business owner. New to investing, he asked several great questions. He is excited to start generating his wealth, despite the current economic environment.
Jackson is a man of action, and he’s taking control of his financial future. He’s self-employed, hard-working and he’s not leaving anything to chance. After a few conversations, we opened a brokerage account at one of the large online investment firms. He made his initial investment, and in a few days, we’ll start a monthly investment program. In a couple of months, we’ll open a Roth IRA. Once these accounts are up and running, we will discuss creating a retirement plan for his business.
The account we setup is aggressive; more than 90% allocated to stocks. Jackson is young, so he might not need his money for 40 or 50 years! He has a long-term view, and he can care less about the Cornavirus or short-term moves in the stock market. His primary goal is to create wealth for his family. Of course, he doesn’t care about the short-term because he is so young, but neither does Warren Buffett, who is 89 years old.
I told Jackson stocks would trade up, down, and sideways for decades, so don’t get excited when they rise or depressed when they fall. In fact, he should be joyful when prices fall because he can buy great companies at lower prices.
Jackson is self-employed, and he knows it’s better to be an owner rather than a borrower. The best way to create wealth is to own things like stocks, real estate, and a business. You can’t borrow your way to wealth or invest in low yielding investments; you need to take risks and not play it safe.
Our firm does not require an asset or fee minimum, so we’ll work with anybody who wants or needs help – like Jackson. As a result, we receive inquiries from every type of investor – young, old, rich, poor, seasoned, rookies, etc. If we can’t meet their needs directly, we make sure they receive financial guidance from another source. We act like financial missionaries
To create wealth, we should all follow Jackson’s lead – think long-term, invest often, take risks, and focus on our goals.
Let no one despise you for your youth, but set the believers an example in speech, in conduct, in love, in faith, in purity. ~ 1 Timothy 4:12
March 5, 2020
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM’s custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.
Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren’t suitable for every investor.