Money Matters (May 2017)
By Chuck Dudley
40 YEARS IN THE WORKFORCE
August 1, 1977, was the day I began my career in financial services. My MBA from the University of Arkansas was done and dusted, and after interviewing with investment firms such as Reynolds Securities (became Dean Witter Reynolds) and AG Edwards (sold to Wells Fargo years ago), I decided to accept an offer from AG Edwards in Ft Smith, Arkansas. Wet behind the ears, and with a slight draw to cover expenses I began what has become a 40 year career in investments, banking and executive benefits planning.
The day I began, the stock market was at 750………..think about that. Twenty million shares traded was a BIG day. Now, that amount changes hands in the first seconds after the opening bell.
Our options were: stocks, bonds and mutual funds. To a small extent, AG Edwards promoted insurance, but only term insurance. Compare that to the multitude of offerings today, and it boggles the mind.
Later on, in the early 1980’s, I had made the switch to banking, and was an investment officer and portfolio manager for Union National Bank in Little Rock (also sold in the 1990’s). At that time, it was the 3rd largest bank in the state at $500 million. During that early 80’s period, the US Treasury long bond (30 years) had a coupon of 14.75%. Fed funds and Treasury bills brought a 21% return. That’s how much markets changed from 1977 as inflation was rampant. And to top it off, Arkansas banks had a 10% usury limit, so no loan could be made over 10% interest. When your liability costs were 13% or so, it’s hard to make money in that environment.
And now today, we have Fed Funds at barely above 0%, the long bond is maybe 2% today and the stock market is above 21,000.
Looking at all this from a historical perspective, one could not imagine how we got to this place in financial times.
Looking back is interesting, but looking forward is more fruitful and important.
BE DELIBERATE, BE DELIBERATE
If I could go back and talk to that young ‘registered representative’ as we were called back then, I’d tell him to adopt this one philosophy: BE DELIBERATE.
Be Deliberate about many things in your life.
Since no one really could have predicted the above events with any accuracy, sticking with fundamentals of life and investing should be the core of anyone’s philosophy.
Here are some of the things to Be Deliberate about:
- Save at least 10% of your compensation. Every time you get paid.
- Invest in as much permanent life insurance as you can. When you are young, your health is the best. Learn about the ‘living benefits’ of permanent life insurance and understand it is a long term strategy , but one that will be valuable to you one day.
- Begin to save for your retirement the day you begin working. Retirement is not easy, and living longer creates stress on your investment assets.
- In your personal life, don’t put off things to another day. If you want to take that trip to whatever is important to you, do it. Be Deliberate about making it happen. But be wise about spending for it.
- Don’t procrastinate. About anything. Make the most of your time on this earth.
- Volunteer. Be a part of something bigger than yourself. Help others. Serve others. It will come back to you.
- Do what makes you happy. Work to live, don’t live to work.
- Be Deliberate about learning, staying current, and expanding your horizons. Don’t become complacent.
- Make Financial Planning a priority.
A BRIEF PERSONAL STORY
About five years ago, I was traveling on business in the State of Arkansas, something I have done in my jobs since 1980. I realized I had been on many back roads and there were many interesting and odd things about this small, wonderful state.
At that point, I began to take pictures and record my travels (really easy with the iphone) on Facebook. That led to a renewed interest in hiking and waterfall chasing. My sons enjoy this and it was something I could continue to do with them. It requires me to stay in shape, so that’s an additional benefit.
With blogging now the rage, I decided to begin a travel blog entitled Travelin’ Arkansan to share my travels and encourage anyone interested to get out of the office and see our wonderful, natural state. The blog can found at: travelingarkansan.com.
When people comment about how interesting some of the places I’ve been are, I tell them: “you have to be deliberate about making time and expending the effort” to do the things you want to do.
It’s true in life, recreation, and financial planning.
Nothing happens in a void. You MUST be deliberate to create the outcomes you desire. There is no other way.
If you really want to make sure you have right ideas for moving forward in a positive manner, we will listen. We’ve been able to help families and businesses learn to use money wisely, and we’d like to help you too. We would be honored to visit with you about how to help you and your business.
An hour of your time spent analyzing your situation might make a lifetime of difference
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