This Investment Tip Is My Gift to You

Dear Reader,

As my 61st birthday approaches, I don’t feel old physically. However, mentally, I must confess to occasionally harbouring thoughts of an older person.

I worry about the younger generation. What does the future hold for them?

When I was their age, the world seemed so much more certain. With no student debts to worry about, you could comfortably afford to borrow for a home…which at the time was valued at only two to three times household income.

Wage Accords gave us the assurity of indexed pay cheques every year. Consumer credit was the exception rather than the rule.

When you catch yourself saying ‘the good old days’, it’s probably a sign the years behind are greater in number than the ones ahead.

What’s the ‘new normal’ that awaits our younger generations?

With artificial intelligence (AI) and robotics being integrated into more workplaces, the jobs market is going to become highly competitive.

Will the tertiary qualifications needed to remain relevant for future employment be moved online?

If so, will the dropout rates increase due to lack of self-discipline?

Does the nanny state implement perpetual welfare programmes that cosset more people from cradle to the grave?

Will the public sector flourish while the private sector flounders?

I hope not. But hope is not a strategy.

It’s at this point I remind myself of Tony Robbins’ sage advice…

Leaders spend 5 percent of their time on the problem and 95 percent of their time on the solution.

Equipping our children with the resilience, determination, perseverance, inquisitiveness and independent thinking is how they’ll create their own ‘new and even better normal’.

Adversity always comes with opportunity.

Showing and sharing with our children examples of how people have turned lemons into lemonade is an excellent way to get their creative neurons firing.

Focus their attention on what can be achieved, not on what welfare programme can be accessed.

Our curiousity and desire to grow as individuals — irrespective of age — is the best legacy we can leave our children.

The inspiration for today’s Rum Rebellion came from this edited email…

Hi Vern

I want to tell you how helpful your book [A Parents Gift of Knowledge] has been for me.
The chapter on investing in yourself made me realise I needed to take control over my life. I have enrolled in courses that have given me the confidence to start my own business. It is early days and times are a bit tougher than I planned but I know I will get there. Thank you.

I wrote a A Parents Gift of Knowledge over nine years ago for our three daughters (aged 21, 19 and 17 at the time).

The book was my way of sharing with them what I had learned from life and the world of investing.

Today I’d like to share with you the chapter that inspired the email…

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The best investment you can make is in yourself

“Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give.”

William A Ward

First and foremost you must recognise that life is NOT fair. If you accept this fact early in your life, it will equip you with the right mental approach to handle life’s trials and tribulations. Wallowing in self-pity will not solve the problem. Determination, belief and integrity will assist you to overcome the obstacle and take you to new heights.

“History has demonstrated that the most notable winners usually encountered heartbreaking obstacles before they triumphed. They won because they refused to become discouraged by their defeats.”

Bertie C Forbes 

It is not what happens to you in life, but it is how you respond to those challenges, that provides the true test of your character.

We all have been blessed with various gifts — some obvious ones and some not-so-obvious ones. These gifts provide you with a start in life, but life will not reward you on potential alone. 

US President Calvin Coolidge famously said: “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.”

The best investment you can make is in yourself. This extends to both mentally and physically. Your career will generate the revenue on which your future financial success is built. 

In your working life, your growth will continue for as long as you maintain a commitment to acquire knowledge and experience. There are no shortcuts to lasting success.

Sometimes people experience fleeting success. The reason their success is temporary is they do not have the necessary skills, experience, desire or discipline required to maintain the success in an ever-changing and competitive world. Possibly success came too early or easily and they didn’t appreciate it.

You must dedicate the time to be successful. This can involve hours of additional reading, studying, talking with a mentor and exercising. These hours are in addition to your normal working day. It is your choice how you spend the 24 hours in a day — some will spend time on Facebook watching other people’s lives and others will invest their time in themselves and live their lives to the fullest.  

Ultimately you will become the product of your acquired knowledge and experience.

The more skills you acquire, the more valuable your services will become. Despite this, it bears remembering that not everyone will be delighted with your growth.

The underlying reason for this is they can feel threatened or inadequate. They’ll compare themselves to you and think: “I’m smarter than them” or “I did better at school or university than they did.” What they don’t realise is that academic results are only a small part of the bigger picture. Inner drive and a determination to succeed are not something you can quantify and compare on a person-by-person basis.

In the deeper recesses of their mind they most likely view your continued growth as a reflection of their lack of growth and this can be very confronting and difficult to admit for most people. 

Unfortunately the more you grow the more likely you are to encounter negativity. This is the potential price you will pay for exceptional success. Accept this as part of human nature and wherever possible surround yourself with people who will rejoice in your growth.  

The famous US football coach Vince Lombardi once said: “Life’s battles don’t always go to the stronger or faster man. But sooner or later the man who wins, is the man who thinks he can.”

Your inner determination backed by an action plan to build an amazing life for yourself will put you firmly on the path to succeed at whatever your chosen endeavor is.

Invest in good relationships — genuine friends will be happy to see you go from strength to strength. Negative people will drain you of energy and depress you. Do not waste your time with those who are mired in negativity. They will only drag you down: misery loves company.

Surround yourself with genuinely inspirational people who, by the way they live their lives, inspire you to rise to another level. Spend time with people you want to be like; those who are living the lifestyle you aspire to and have the same core values as you. 

Just as you would like them to rejoice in your successes, you must also rejoice in their successes. It is not a one-way street. What you give out you will receive back.

Choose a good life partner; one who will support and encourage you. Divorce is expensive (both emotionally and financially), so it is better to start on a solid foundation.

Remember that when you are dating you are pretty much seeing the best representation of the other person as they are actively trying to impress you. If you fantasise that they will change for the better when you get married then you are relying on a false hope. If it isn’t good when you are dating, it will most likely get worse when the pressures of married life really start to test the relationship foundations.

You must invest time, love, kindness and patience; as well as be unselfish in a relationship. If your partner does not repay you on this investment, then you have to seriously consider “selling” the investment. 

Investing in yourself on a professional and personal level does pay rewards. These rewards do not always present themselves immediately: this is where persistence comes in.

When the financial rewards do start to flow your way you should have an achievable plan on how to successfully manage the money — and the discipline to manage yourself. There are many sad stories about fortunes squandered due to ill-fated investment schemes, gambling and/or an addiction to alcohol and drugs. Learn from the lessons of others; it is far less painful than learning the same lessons yourself.

The investing knowledge that is revealed in the following chapters will assist you in retaining the wealth you create from your career.

Investing in your children is not only the very best investment you’ll ever make, it is by far the most enjoyable.

My birthday wish is that I live long enough to continue watching this investment compound in value.


Vern Gowdie Signature

Vern Gowdie,
Editor, The Rum Rebellion

Vern has been involved in financial planning since 1986.

In 1999, Personal Investor magazine ranked Vern as one of Australia’s Top 50 financial planners.

His previous firm, Gowdie Financial Planning, was recognised in 2004, 2005, 2006 & 2007, by Independent Financial Adviser magazine as one of the top five financial planning firms in Australia.

In 2005, Vern commenced his writing career with the ‘Big Picture’ column for regional newspapers and was a commentator on financial matters for Prime Radio talkback.

In 2008, he sold his financial planning firm due to concerns about an impending economic downturn and the impact this would have on the investment industry.

In 2013, he joined Fat Tail Investment Research as editor of Gowdie Family Wealth. In 2015, his book The End of Australia sold over 20,000 copies and launched his second premium newsletter, The Gowdie Letter.

Vern has since published two other books, A Parents Gift of Knowledge, all about the passing of investing intelligence from father to daughter, and How Much Bull can Investors Bear, an expose on the investment industry’s smoke and mirrors.

His contrarian views often place him at odds with the financial planning profession today, but Vern’s sole motivation is to help investors like you to protect their own and their family’s wealth.

Vern is Founder and Chairman of The Gowdie Advisory and The Gowdie Letter advisory service.

The Rum Rebellion