Let’s imagine, I had two clients approach me to open investment accounts, within a few months of one another. These two ladies are sisters, and they both had very similar circumstances. Both earned a modest income but lived comfortably below their means. And both had a long-term perspective for the investment of their money. At different times, each of them would tell me that they more or less would try to “forget I even have this money”, so they could let it grow and compound.
Every time I would call them, both would listen to my update on their account, and when I would ask if they had any questions, they’d say, “no, it’s doing what it’s supposed to be doing,” and then they’d calmly move on with their lives.
You cannot describe them as careless. They both are executing precisely on their strategies. But what they both steadfastly refused to do was to interrupt the eighth wonder of the world - compounding interest – unnecessarily. This is precisely what I believe puts investors on the road to wealth.
I feel we can all learn quite a bit from the self-discipline of these two young women.
Any opinions are those of Tim Weddle, Financial Advisor, and not necessarily those of Raymond James. Any information is not a complete summary or statement of all available data necessary for making a decision and does not constitute a recommendation. Past performance may not be indicative of future results. Investing involves risk and you may incur a profit or loss regardless of the strategy selected. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. The cost and availability of life insurance depend on factors such as age, health and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Guarantees are based on the claims paying ability of the insurance company. Prior to making an investment decision, please consult with your financial advisor about your individual situation. This is a hypothetical example for illustration purpose only. Actual results will vary.