A personal anecdote: Mum shows it's never too late
I don't normally write personal anecdotes, but something happened this year that has been over 15 years in the making - my mum invested her hard-earned money. It was a big achievement for myself and my grandfather Grampie.
Mum’s father was an amazing retail investor, he bought Rio Tinto and BHP in the 70’s, he brought CBA and CSL in both 1994 initial public offerings (IPO), he also bought Telstra in all three IPO tranches throughout the 90’s and loved his Woolies and Wessie shares so much he would buy parcels of them every year without fail. He had sovereign fixed income by buying exchange traded funds (ETFs), hybrids and a tonne of corporate bonds, and to cap it all off, a minimum of two term deposits (TDs) so that even his cash was working for him. He saw TDs as his ‘here and now’ cash component.
By the time he passed in 2018 he had over 25 holdings in some of Australia’s most trusted names and a few up and coming names too, was well diversified with all asset classes covered and was basically earning a good wage from his investment portfolio at the end.
It’s needless to say that Grampie’s portfolio was legendary in the family.
The key take-aways from Grampie is this:
- He invested for the long term.
- He reinvested all earnings most of his working life before drawing on the income later in life.
- He participated in anything that he believed would grow his capital.
- No piece of cash was not ‘working’, as in, it was invested in something to gain a return.
When I was a kid this fascinated me and I loved watching him study his portfolio and reading the business section of the newspaper with yesterday’s individual stock prices so he knew where his portfolio stood. We would talk about all this for hours and he would show me how he did what he did and why. The learning from these chats was steep and better than any degree I have earned.
As I got older and took up investing as my vocation, Grampie would ring me for ‘investment advice’. I would respond with: ‘I think you have that the wrong way around Grampie, I need advice from you.’
I do miss him, and as I sit here and write this piece from his home of 40 years, I remember why I love what I do, why I do it and why I got into it.
I ‘background’ this because what is also interesting from Grampie’s story is that none of his four children invest, that was until this year when mum finally entered the investment market.
Grampie never pushed his kids to invest, but I have been pushing mum to invest since I can remember.
The excuses were always; ‘Oh, I don’t know how’ (yes, I was telling her that I would help) or ‘I don’t have the time’ or ‘I don’t have enough money’ or ‘I can’t afford to lose my money’s value’.
What was also interesting about these comments is that it would be accompanied with a statement like this: ‘I wish I had started when dad did’ or ‘I suggested to your father that we should have done this years ago’. My comment back was always ‘so, why didn’t you?’ And we would then loop back to ‘I don’t know how and don’t have the time…’ etc.
So, when COVID-19 hit this year and her working life was impacted, it made her sit up and realise she needed to do something. She then also realised that if she had started investing even just five years ago, her investment money would be significantly better off than it was just sitting in her bank account doing nothing.
So, she finally came to me and said, ‘help me get started, I can’t afford to put this off anymore’ – verbatim.
Now, I won’t divulge mum’s age or other personal demographics, but I will say this:
- She is at an age where she wants her money to be growing but knows she will want to start drawing on it in the near future (5-10 years).
- She wants it to grow fast, so she is contributing $500 a month to her initial investment to compound her returns. (That initial investment is five figures - any start is better than no start at all in my view.)
- And, she wants the process and the investment to be easy, as she doesn’t have the time like Grampie did to pour over the papers and work out which stocks or markets to invest in.
The answer was pretty clear, a diversified ETF portfolio weighted towards growth with a simple contribution plan.
She chose InvestSMART’s Growth Portfolio and couldn’t be happier. She said the process was easy and now that she has actually started, she can’t believe she put up so many roadblocks. In fact, she believes she has more ‘peace of mind’ now that it’s up and running than before when she was deliberating about what to do and kept putting it off.
This was our last conversation about her investment portfolio:
Mum: ‘Wish you had pushed me into this sooner.’
Me: ‘Mum, I have been at you about this for over 15 years.’
But, what mum’s decision shows, is that it’s never too late to start. I know Grampie would be happy to know she has started investing after all these years too.