If you are reading this, you probably consider yourself an investor on some level. Do you pride yourself on knowing all you can about the markets, how investments work, and maximizing your wealth? Or yet, maybe you don’t understand much of the whole thing but know you need to save for your future. Thinking about investing on a regular basis may seem completely normal, as it has been this way for several generations. However, if we step back and dig a little deeper, we may find ourselves asking another question. How did we get to a point in our society where tens of millions of people must measure our financial futures and much of what we hold valuable in our lives by the daily ups and downs of investment markets? It’s kind of weird when you think about it, and it wasn’t always this way.
The simple answer to the above commentary is that we have reached profound societal progression and become one of the wealthiest countries in the history of the earth. After all, less than 100 years ago, a blip on the radar screen of history, there was no mass investing. People worked until they died, and many lived on farms with extended families. Whatever was left was what you got. Along the way, our success shifted to first generation planning, and things like Social Security and pensions were born. As things evolved, growing incomes and consumerism provided opportunities to save and invest. In recent times, we have reached another shift in the tectonic plates of planning our futures. Long gone are the days of families living together for mere survival, and stability focused savings platforms like Social Security are becoming unsustainable. We have now gone from investing as a privilege for some, to a necessity for most. We created a world where wealth, economic engineering and financial planning collided, and one of the only ways for the masses to create sufficient long-term wealth is through the investment markets.
So why in the world would a wealth management team like ours submit an essay talking about how investing has become part of everyday life, and that there should be any cause for discussion? After all, much of what we do is just that. First, when we take a broader view of society, there is still a large education gap in how many people need to prepare for their futures. Investing can be extremely complex, and if this is how our society is going to proceed, this disparity must be closed over the long-term. Many today still do not work with Financial Advisors and are left to navigate a complicated environment. Second, investing is emotional, and we often find it difficult to separate short-term fluctuations from long-term planning. Measuring thirty-year events in five-minute increments is never a good idea, yet it can often look like that’s what we are supposed to do. Finally, it doesn’t seem natural that something which often feels beyond our control can have so much influence over our lives. Owning a farm and leaving it to family can seem much easier to grasp than accumulating two million dollars in a 401k and integrating it into your life plan.
Being an investor in these United States is cultural and it runs deep. It allows millions of Americans to accumulate significant wealth they never would have been able to before. However, with that has come natural shifts that we believe will have a significant impact on how we think about our futures, and what we do to plan for them. We haven’t started discussing them as a society yet, so we thought we would get the ball rolling.
Investing involves risk. No investment strategy can guarantee positive results. Loss, including loss of principal, may occur. Material discussed is meant to provide general information and it is not to be construed as specific investment, tax or legal advice. Keep in mind that current and historical facts may not be indicative of future results. Diversification is an investment strategy that can help manage risk within a portfolio, but it does not guarantee profits or protect against loss in declining markets.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. (C) Twenty Over Ten