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  • May 31st, 2019

    When Your Time is Your Own

    Photo by Monica Silvestre from Pexels

    A long time ago, I met a wonderful older woman in South Carolina and asked her that most American of ice-breaker questions, “What do you do?” She replied gently, “My time is my own.” Not being from the South, I had never heard that before. It was thoroughly charming—and enlightening. In just five words, she said it all.

    To me, “my time is my own” means freedom to choose how to spend it, which usually comes after a lifetime of working for The Man (or Woman). One person may babysit the grandchildren. Another plays golf (I’ve never understood how much you can actually do that, but whatever) or another sport or devotes time to a hobby. Some may volunteer at a church, homeless shelter, food bank, or other community setting, or enter local politics. Others will travel. Most people will combine some of these.

    The key is that someday, most of us probably want to decide how we spend our time, not have it dictated by our employers. It is a fact that despite the industry of “follow your dream” and “do what you love,” which are definitely good pieces of advice, these are for the most part first-world luxuries, and even then, rare (which makes them luxuries). And ask anyone who has done either of those what is entailed, and the answer will include many falls and picking oneself back up again.

    It's Wonderful

    Plus, for those who have children, they become the focus of parents’ lives. Jobs become jobs, all about making enough money to feed, clothe and educate children, not some kind of magic path to self-fulfillment. Most jobs are not exciting, spiritually enhancing, or full of challenge and opportunity. Some are, sure, but what I’ve seen is that if we can do them with enjoyable people and provide a useful good or service, that’s pretty darned great. Those aren’t easy to find, either, but they make any old job into a pretty good job.

    I’m not arguing for settling or telling young people the “hard truth,” far from it. (What do I know, anyway?) It’s more that work isn’t everything, and family (or any other non-work pursuit) often is. They are often the dream and what one loves, though truly hard work, but not a paid job. Thus, retirement, when “our time—including what we used to spend at work—is our own,” is when the kids are gone, the job is (or more likely, jobs are) done, and eldercare is likely complete. For most people, this may be the time to pursue things that were not possible before. We may not need to work but decide to do so. Our time is our own.

    How much time will we have? Not being God (surprise, I know), I can’t say. Life expectancy from birth isn’t a great indicator because of all the things along the way. However, if we make it to the traditional retirement age of 65, there is going to be a lot more time than people used to have. When Social Security came into being the 1930s, most people had physically demanding jobs, and their bodies just didn’t last much more than 65—if that. But today’s 65-year old woman will on average live to 89 and man 87 (women are of stronger stock, no surprise there). People didn’t expect retirement, or for long. It’s concept that has come with longer lives. And with so much time on average ahead of us, much more money is needed. This requires planning long in advance, when money can have a long time to grow. To have one’s time be one’s own is not free, but the sooner one starts preparing for it, the cheaper it becomes.

    Tom Jacobs is a partner with Huckleberry Capital Management, a boutique investment advisory firm serving clients in 25 states and 3 foreign countries from offices in Marfa, TX, Silicon Valley, CA, and Asheville, NC. You may contact him at 432-386-0488 and tom@investhuckleberry.com.

  • December 22nd, 2018

    Why Dividend Reinvestments Will Help You Sleep in Times Like These

    Thanks to the recent market drop, every single investment category has now performed poorly in 2018, wiping out gains going back into 2017. There has been, in the words of a friend, “nowhere to hide.”

    Many investors have for the first time seen their accounts decline substantially since the second half of 2015 or summer of 2011. It’s important to stress that declines are normal, to be expected, and in many ways necessary, because they allow us to refuel for future gains.

    I say this knowing that many of us were investing through the 2000-02 dot-com crash as well as the 2007-08 credit crisis and Great Recession (I’ve been investing since 1968, so add the 1972-74 and 1987 crashes to the list). Stocks dropped dramatically those times for sure, but in every case, the broad market indexes recovered and exceeded their pre-crash highs. Patience won. This is why, to those who ask, “What to do?”, I invariably answer: “Nothing.” No matter how unnerving things may seem, they are not new. This time is never different.In the absence of a sudden life change, the right advice is, “Don’t do something, just stand there!”

    The only time that is not the right advice is if your long-term investment plan is no longer what it was before. Otherwise, if you own stocks that issue dividends and perform stock buybacks, you have every reason to sleep soundly at night. And a major reason for that is, yes, even while you sleep, your money is still working for you in positive ways, especially if you have an advisor who will help you set up automatic dividend reinvestments like we do for many of our Huckleberry clients.

    When companies pay cash dividends, they deposit them on a monthly or quarterly basis into your brokerage account. With dividend reinvestments, that cash is then used to buy more of the stock at the current market price. So, without doing a thing, in a market drop, you are buying more bargain basement priced stock of the same great companies you’ve already chosen to own.

    Think of it this way: Someone gives you a check for $4.00 every quarter. A pack of gum (or share of stock) usually costs $1.00, allowing you to buy four packs. But if the price of a pack of gum (its “stock price”) drops to $.80, you’re now getting five packs every quarter – 25% more! In the long run, that means you will own more valuable stock. So unless you want to bet against the long-term growth of American business (which has been a losing bet in every era, even the Great Depression), lower stock prices are good for long-term investors.

    Therefore, the only time changes in investment strategies are warranted is if your situation has changed – perhaps you married, got a divorce, had children, changed jobs, or your retirement plans have shifted – but not because the market rose or fell (that’s just noise and emotion).

    With dividend reinvestments, you snag the benefits of new cash invested at lower prices — automatically — while you get to turn off the noise and enjoy the holidays (and far beyond too).

    My very best wishes to you and yours for the holidays and New Year,

    Tom