The Wealthy Retiree, Part 5
The smell of old diapers hung in the air as Quaero sat on the couch of Will’s apartment. It was Tuesday. Quaero enjoyed work on Tuesday because it meant that he would get his next lesson on retirement success from the wealthy retiree, Will Pecunious, a resident of the complex where Quaero worked as a handyman. Will, however, had stepped out of the room to get a fresh diaper.
Quaero was not very good with children, having none himself with his wife Maria, but he did take a certain enjoyment out of watching Will’s great-grandson, Tyler, surf the end tables and couches making his way around the room. Will was babysitting for a few hours. It was nice having such a young child in senior living complex. Tyler was an especially happy toddler and all the residents were not shy about dotting on him.
“Here we go!” Will said as he returned to the room with a fresh diaper and wipes. He began making short work of what looked to Quaero like the very complicated task of removing the old diaper and replacing it with a new one.
As he affixed the final Velcro strap on the restless little boy, Will began, “So, I bet you were wondering what today’s lesson is all about?”
“I was mildly curious.”
“Today’s lesson is called, ‘Don’t be a sheep’. This is a very important lesson, Quaero. I want you to pay close attention.” Will insisted.
“Of course, Will. I always take your lessons very seriously. Although, I must admit I enjoyed the lesson last week in the Corvette.”
Will smiled. “Me too. This lesson is about your investment portfolio. But even more so, it’s about how you react to your investment portfolio day in and day out.”
“Let me finish.” Will interrupted him. “The biggest problem with your investment portfolio in retirement is you! Got that sport. Nine times in ten it is the owner of the money that screws up their investments because of greed and fear.”
“Yeah, I guess I can see that.”
“I’m sure you’ve experienced it in your investments already. You invest in something that has done well recently and you want to ‘make money with the big boys’! That feels great for a while as you make a little money at first, but eventually things turn around and you realize you were caught up in the greed.”
“I’ve definitely done that.” Confessed Quaero. “It was tech stocks in 1999.”
“You weren’t alone. Lots of people got caught up in the mania. How about a time when things were going down and you couldn’t take the pain anymore so you sold out…probably near the bottom. Did that ever happen to you?”
“It sure did.” Quaero nodded. “In 2009 I sold all my stocks at just about the bottom. Boy, what a frustrating few years that was. I bought my investments back only a few months later; but unfortunately I missed a lot of that initial rally.”
“Exactly my point. You let fear get the better of you. You stopped thinking logically and started thinking emotionally. That is certain death in investing and retirement planning.”
“In our next lesson, Quaero, I am going to teach you exactly how to invest properly for retirement, but this lesson is about understanding the big picture. Avoid the short-term traps of fear and greed.”
Will paused and turned to his great grandson. Tyler had been surfing around the living room through much of the conversation. He now stood, holding the coffee table for support. Will reached out to him, held his hands and coaxed him away from the table.
“Come on, little buddy. Here we go.” Will cajoled.
Tyler took a few steps away from the table and Will gently let go of his hands. Tyler immediately wobbled and sat back, his diaper creating a thud on the floor.
“Well, not yet, but he’s close” Will said.
“He hasn’t walked yet?” Quaero finally realized.
“Nope, not yet. But here’s what you need to understand. Tyler’s parents and I know that he will walk. There is no question. There is no other option. Sure, he may fall down, but that doesn’t mean we stop trying or change strategy. Look at him, down there on the ground. Do you think he’s beat? Do you think we will give up on him, trade him for another kid?” Will was now grinning.
“Of course not, falling down from time to time is part of the process. We have to accept that in order to achieve our goal. If we don’t, we have failed before we started.” Will moved back towards Quaero to hammer home the point.
“In fact, my biggest fear is that he will run too fast and hurt himself. Tyler is at a stage where he only needs to walk. Thinking about running will only lead to boo-boo’s.” Now Will was flat out laughing, proud of his metaphor.
“I got it, Will.” Quaero chuckled. “If you start comparing a soiled diaper to futures and options, I can promise you I will not come back next week!”
Will burst into laughter. “Fair enough! Think about what you are trying to accomplish long-term and remember that short-term fluctuations in value are just that, short-term. Focus on the big picture and don’t worry if you fall down from time to time.”
“Great advice, Will. Thanks. But before I go, I’ve gotta ask you, did you bring Tyler over here for my benefit or was he really scheduled to come today?”
“Ah”, said Will pointing a boney finger in the air, “That is a riddle that may never be solved”.
Quaero laughed, said his goodbyes to both Will and Tyler and walked out the door and back to work.
Next Issue: Lesson #5: “More than just Eggs and Baskets”