We deal with a mixture of different demographics of clients. Some are in their late twenties and thirties. Some are in their sixties and beyond. Some are in the middle. I guess I fall into the middle group! In all cases, we get to share experiences with one another, both good and bad.
But one of the real difficulties in working with the younger group is the immediacy in which they expect everything. They are used to it all being done there and then. If they want to buy something, they can do so in one click on Amazon, and have it arrive the same day. If they want to transfer money to a friend, they can do so instantly via a text message.
It’s probably the case that the younger generation do not appreciate the time things used to take and the shift that has occurred.
Financial services has not quite embraced the speedy world we live in. You want some information from Legal & General? You must email them (they thought it would be a good idea to dispense with phones) and wait for a response in three days’ time. What about Zurich? Well, you can speak to them, but expect a response in 10 working days. It really is hard to comprehend what takes them so long. These companies are so at odds with how fast the world is moving. And they are not alone.
And the issue with investors is the same. The major problem here is patience. I can often be heard saying “This is a long term solution”.
But what is meant by long term. 5 years, 10 years, 20 years, or longer? Another of my favourite saying is “Tell me, John. You want to save for your retirement over the next 30 years. How long do you think you are investing for if you put a sum of money away every month?” 30 years is invariably the answer.
But is it? Only the very first contribution is invested for 30 years. The last is invested for 1 month! So the investment term is really only 15 years.
One of lifes’ truisms I have learned is that wealth is created over decades.
But back to the subject. Everyone wants to know what is happening now, now, now. How something has performed over one year, two years and so on. It is counter-productive for an investor to be so focused on investments when they cannot control the outcome.
Have you heard of the Christmas turkey example. If you are cooking a turkey for the family and it is supposed to be cooked over eight hours, you would not open the oven after half an hour and ask whether it is ready, would you?
I don’t know all the answers but what I do know is that I try to keep my clients focused on making the most of their life, their income and their assets because, in the long term, we all end up in the same place. Clients need to enjoy the time they have while they have it, but balanced with patience and perspective.