I have been stunned recently by some of the discussions I have had with some of my own children’s friends and relatives about finances and investing towards a more secure financial future. The lack of knowledge that has swept over this country is alarming to say the least. Younger folks with longer time horizons are not investing! They might be saving some money or placing some “bets”, but they are NOT putting that money to work.

Why is that? What is going on?

Only YOU are responsible for your own personal financial future.

If you are under 35, I am really concerned about your lack of investing in blue chip mega cap quality stocks to help you make a more secure financial future for yourself. You are probably not even investing, unless someone puts a little bug in your head that you can make a bunch of quick cash in “this or that”.

Yeah, I am talking to YOU, bitcoin/crypto-currency gamblers  COIN! A bunch of you have made some great profits buying into the craze at various points, and thankfully many are cashing out and taking their gains, which is SMART in my opinion, and I am not trying to bash that sector, but it isn’t for me, that’s for sure!  Ask yourself what phone number do you plan to call tomorrow if you look at your online wallet today and see that everything has been cleaned out of your account.

Now you have a bunch of cash, what will you do with it? According to lots of sources, you won’t do anything with it aside from buying cars, or watches, or other aspirational products; in other words, SQUANDERING IT.

Warren Buffet was on CNBC over the weekend and said….”Berkshire Hathaway has built value over the past 53 years by reinvesting earnings and letting compound interest work its magic.  Even with suffering four truly major dips.  It is a terrible mistake for investors with long-term horizons – among them, pension funds, college endowments and savings-minded individuals — to measure their investment ‘risk’ by their portfolio’s ratio of bonds to stocks. Often, high-grade bonds in an investment portfolio increase its risk.”  We couldn’t agree more at B P Financial! The below chart is from ONE single $5,000 investment with an 8% overall return after various periods of time… JUST A ONE-TIME INVESTMENT!

Now, look at the next chart below at what happens when just $5,000 per year is invested in the same way, over time! THAT is the magic of compounding.

Keep in mind that my personal approach is to never sell a quality dividend growing stock unless the dividends are cut or stopped. I will use fundamental analysis and financials to decide if any other stock should be sold (or purchased), regardless of the dividend/share price/Inflation/Headline News Flashes/ or who occupies the White House.  I’m doing this to save, protect, and grow my wealth.  A breakdown of a company will be on the chopping block, and if it reaches a price low enough to become a value, it is eligible to be purchased.

Reliable income over the long term is my goal, and managing the portfolios will focus on achieving that goal.

The dollar value of these mock portfolios is not important. Each investor has their own amount that they feel comfortable investing. I have chosen not to have dollar values, just share prices and dividend yields, so that you can plug in any amount you choose to and purchase as many shares as you want.

It does NOT have to be “brain surgery”, but it does take a different mindset. Stop thinking about the markets as a casino to HOPEFULLY make some fast cash. Begin USING the markets to put YOUR cash to work over the long term so YOU could hopefully have a much more secure financial future.

If you would like some help making decisions or simply want advice with your financial matters please give us a call.

 

Blake Parrish, CFP®
Senior VP, Portfolio Manager
Phone: (503) 619-7237
E-mail: blake@bpfinancialassoc.com

Certified Financial Planner Boardof Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.”