I hope you’re getting outside and enjoying some beautiful weather this spring. Here in New England it feels like a switch was flipped Sunday when temps jumped into the mid-80s and higher—too hot to walk the dog—but lately its been cool nights, warm days, and blue skies. Perfect for getting outside or launching your boat for the season.
Will you be teaching a grandchild how to do something this summer? I hope you’re thinking about your investments and your life—where you are on your journey. We’re all in this together.
Do you remember when you first started out as an investor? There’s something refreshing about beginning something new because you don’t have all that pressure. You don’t have much to lose. There’s no stress, which can be a killer. As an aside, you and I talk about pressure all of the time, especially when it comes to inertia— not doing anything—because of the pressure.
One way to take the pressure out of your investment journey is to develop an investment plan and stick to it. Stick-to-itiveness is something you can teach a loved one, especially a child. If you teach them about sticking to a steady plan and sprinkling it with the miracle of time, you teach them about generational wealth. Walk with me.
Tell a loved one, “Look at that tree. Isn’t it incredible how tall it is? That tree is probably 40-years old.”
“How do you know that?” they ask.
“Well, it takes a long-time for a tree to get that big,” you say.“Imagine if you saved a little of your birthday money every year. Imagine how much you’ll save in 40-years. Wouldn’t that be great? Like a tree, it can grow a little bit every year. It doesn’t need to get that big in one year.”
The concept of growth is intuitive to kids. What does every kid want to be? Older, bigger, and grown-up. The concept of growth is set deep in their bones. You don’t need to talk to them about rate of growth. They think about growth every single day.
If we consider a portfolio with a six percent rate of growth, and then compound that annually for 40-years, it will be worth ten times its current value. That’s fun to think about. What’s interesting, is that in 30-years it will only be a little more than five and half times as much. The key is in those last ten years. In other words, the key is TIME.
Action Line: You can pass on the money-miracle of growth and time. Your grandchildren? They have all the time in the world. All you need to do is teach them. And if you do—like that big tree you just pointed out—they’ll never forget you.
How To Turn Ten Grand into a Hundred Thousand
Originally posted on Your Survival Guy.