Never stop investing — a retiree’s journey
THE retirement years can be plagued with ups and downs, or it can be a dream come true.
Last week it was a pleasure to conduct business with a 92-year-old retiree — a businessman with many years of success as an entrepreneur. As a businessman he knew failure, having experienced the loss of his business prior to retirement, but he was always an avid investor and recovered remarkably from the financial setback. He learned from his failure and re-emerged as an outstanding entrepreneur, investor, and motivator. Long-term investing in the stock market is very important in helping investors to overcome financial challenges that may occur along life’s journey. It provides options and increases the purchasing power of your money, when you need it most. This retired businessman was able to invest a handsome sum of money, representing dividends earned from the stocks he bought many years before. He is able to diversify his investments in retirement as emergencies can happen at any time.
This retiree is also building generational wealth and looks for the positive in every situation. At 92 he is still able to drive and conduct business on his own, and enjoys reasonably good health. He looks forward to another dividend payout in December 2023 and is quite happy that his long-term investments in stocks locally and globally have proven to be quite rewarding — even in this current economic climate. Some investors have failed to realise that even in a declining stock market you can still earn dividends. This client understood this years ago and has been reaping the rewards over and over again.
In Jamaica the majority of entrepreneurs are in the 25-34 age group. At this stage entrepreneurs should be actively investing and planning for retirement in order to enjoy financial independence in the future. Recent statistics from the International Labour Organization showed that the self-employed represent 40 per cent of Jamaica’s workforce, but a significant number of self-employed individuals and entrepreneurs have no formal pension plan in place. Creating streams of income is important for employees, the self-employed, and entrepreneurs, as the economic climate can be challenging, resulting in business closure. Having a pension plan and a diversified investment strategy for short-term, medium-term, and long-term goals will prove beneficial for those who seek financial independence and wealth creation.
In many circles, noted investor and billionaire Warren Buffet is considered to be the world’s most successful investor. His business partner, Charlie Munger, is 99 years old. At his company’s recent AGM Warren Buffet calmly answered questions for three hours. Buffett has no plans to retire. He has created a succession plan for his business (Berkshire Hathway), a global conglomerate. Let’s examine the journey of an entrepreneur and investor who never stopped investing.
Buffett’s entrepreneurial spirit manifested as early as age six. He bought Coco-Cola and chewing gum from his father’s grocery store and resold the products at a profit.
He started investing in the stock market at age 11 by purchasing six shares. He learned his first lesson in being patient when the stock price fell from US$38 to US$27. When the price rose to US$40, he sold it, only to see the stock price rise to US$202 per share within a few years. He regretted not waiting but he learned early about being a patient investor — and that has underscored his lifelong success in investing in the stock market and being a successful entrepreneur.
While in his teens he sold newspapers and owned a pinball machine business, which he later sold and invested in his father’s business, which enabled him to purchase a farm. While at university he learned to see stocks as a business, use the stock market swings to his advantage, and seek a “margin of safety” — which simply means find a break-even point. These lessons guided his lifetime investment in the stock market. Buffet became a billionaire in the 1990s.
With consumers and investors locally and globally becoming concerned about the possibility of the United States dollar being dethroned by another currency, Warren Buffet is optimistic that it will not happen anytime soon; he remains confident that the US dollar is the world’s reserve currency. He expects people to make stupid mistakes in the future and he believes his business will find the opportunities should such situations become reality.
The importance of staying invested cannot be overstated. Let your money work for you. The day will come when you will stop working for money but I reiterate: Let your money always keep working for you by putting systems in place to make money even while you sleep — and that’s what investing long term in stocks and real estate can do for you.
Never stop investing!
Grace G McLean is a financial advisor at BPM Financial Limited. Contact her at: gmclean@bpmfinancial. or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at firstname.lastname@example.org