New Year resolutions and investments do not make good bedfellows. Oh, you may think that deciding to begin an investment plan in the new year is an admirable thing…but investing for wealth is not something that depends on a particular time for commencement – nor is it something that you only think about in the first flush of the new year. Because wealth building should already be part of your life on a daily basis, not something that has to be resolved upon at year-end happy hour. Wealth building through steady investment should be a lifestyle long before those new year’s eve celebrations.
There is a perception among many people that in order to become rich you need to be a stock market fundi, a brain surgeon, a CEO – or you need to win the lotto, inherit old money, own your own business, marry a wealthy person. They believe that an ordinary individual, earning an ordinary salary, does not have – nor will ever have – the capacity to become wealthy.
Nothing could be further from the truth.
And the truth is so simple it should be hammered into your head during your last year of school. Begin to invest with your first paycheck and remain consistent and steadfast with increasing contributions throughout your working life. Note the word ‘invest’ not ‘save’.
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.” ~ William Feather
Recently, a religious organisation discovered their money had been invested in an oil and gas exploration company. Not wishing to support the mining of fossil fuels, they sold their shares in the company concerned. When you sell, of course, someone else is buying – so while the transaction did not necessarily harm the company directly, the organisation hopefully had the satisfaction of placing their money with ventures they felt offered a greater sense of altruism and good influence.
But more intriguing than anything they felt or did, is the fact that they knew exactly where their investment had gone. And most people, unless they’re well-versed independent investors who do their own selecting, have no idea what happens to their money once it is swallowed by a ‘fund’. This includes retirement funding, policies, money markets and all financial investing options across a wide spectrum of choices. In fact, it’s often a question they never ask. They simply expect the value of their investment to naturally, hopefully, grow.
In 2006, a film made by Jamie Johnson, heir to the Johnson & Johnson fortune, depicted Americans who controlled nearly 50% of America’s total financial wealth in 2004. The stir this created rippled across the globe until it became a wave of outrage and resentment. Eventually, for a variety of supportive reasons, banners were painted and people marched, and finally ‘Occupy Wall St’ set up vigil outside New York’s powerful financial houses.
But the 1% remained unperturbed. This is largely to do with financial acumen, personal character and practical insight. The wealth of the 1% isn’t under their mattresses – it’s tied to vast investments, ventures, projects, product development, research, science, technology, energy exploration and inventions. All of which are the very things we depend upon to prop up job opportunities, pension funds, life policies, etc, right down to competitive pricing in the supermarket. In fact, the wealth of the 1%, including their taxes, underpins just about everything on the planet.
Whether you have just set up your independent practice or have already established a solid track record in the fields of financial and investment management, you will find that your most difficult area of administration will be the compliance obligations and onerous recordkeeping required in today’s current business and regulatory environment.
The pressure to observe all constraints in a timeous, detailed and accurate manner is both time-consuming and tedious. In tandem with this increase in paperwork and application are a number of issues which add to the stress:
- clients’ expectations have grown as an ever-growing spectrum of investment opportunities become available
- the investment environment is becoming increasingly complex and therefore more difficult to manage
- fees and commissions are constantly under pressure.