Recently we had a heart touching conversation with someone that we would like to share with you today. We’ll call him Keith for the purpose of this blog. Keith is happily enjoying retirement at what most people might think is a relatively young age. He is actively engaged in all manner of activities; takes three holidays a year; and is pursuing some physical goals that would be the envy of a man half his age. Not exactly the stereo-typical retiree you might say.
Keith often thinks of his father as he ponders how “lucky” he has been in life. He thinks of the golden nugget of advice his father gave to him that set him on the path to financial independence and amazing life choices. You see, he puts his happiness in retirement down to some very simple and powerful advice he got from his father when he was but a boy. His father’s advice was given to him when he was still at school. He was encouraged to take a job to earn pocket money. At about this time his father sat him down and told him this: “save ten percent of everything you earn. Without fail, save that ten percent.” He says his dad treated the conversation with great solemnity. He made it clear that this information was vitally important to his future success, and he must take this message to heart. And so he did. Using this as a core principle he began saving at a young age and took advantage of savings and investment opportunities as they came along. The rest as they say is history. By the time he reached fifty he already had significant financial resources to give him options most people dream about. Retirement for him really means progression to a new and challenging phase of his life, where he has the opportunity to do new things, and focus more on things close to his heart.
His financial freedom earned through applying a sound principle isn’t unique. We have many, many clients who have the peace of mind they desired. But regrettably for the majority of people in the UK such a position is rare. The majority of our population reaching retirement age rely solely on the state pension for support. And yet with the right advice at the right time it could all be so different. In a recent documentary entitled “Becoming Warren Buffet”, the legendary investor stated “all that is required to make money is time.” The wonder of compound interest does the rest. Of course, at Forbes Lawson we know this. And we love explaining it to our clients. Starting early on the path to financial security, the path to wealth, offers amazing advantages. Those extra years make a world of difference. But so few young people do it. Especially in today’s credit-based economy, it’s all about instant gratification.
Key studies have shown that the ability to deny instant gratification in return for more significant returns at a later stage are key to high performance results in any field of human activity. Whether it’s denying ourselves that extra slice of pizza to achieve a healthy body or exchanging leisure time for study time to achieve an exam result, the ability to wait for a better return is an ability worth its weight in gold. And nowhere more extreme than in savings and investments can the benefits of this ability be seen.
Whilst it’s such a great feeling to start someone on the path to financial security at an early stage in their life, it is just as satisfying to rescue someone from a difficult situation. So often we have helped people restructure their financial lives from what seems to them at the time to be an impossible situation. But with the right advice and a few years of solid building, a better future is soon a reality. So, it’s never too late to start, as our video says…
But back to the “Gift Like No Other” that Keith’s dad bestowed on him. In our view, like Buffet’s, it’s as sound a proposition as you will ever get: start saving and investing early enough and anyone can optimise their financial future. A safe financial future isn’t just a dream. It’s a reality we create for client’s time after time. And isn’t it the sort of future we would all want for our loved ones, for our family? Keith’s father gave him the gift of understanding the immense power of this habit: and his story made us realise that it’s a gift we can all give to people we care about. So, we thought it would make an interesting blog. The chance to take a moment and think about those we care about and give them something that will change their life for the better.
So, we pass it on to you with the suggestion that you pass this on to someone you care about. Tell them to save. Tell them to start as soon as they can. Tell them to seek good advice and avoid being one of the many who has to rely on the state pension to survive later in life. Give them the option of choices in life by instilling in them the virtue of saving and investing. Get them to talk to an Adviser, any good Adviser. Give them a gift that keeps on growing: years from now they might recognise you handed them gold-dust.