While money doesn’t grow on trees, it can grow when you invest wisely. Knowing how to secure your financial well-being is one of the most critical lifelong skill sets you will ever need in life as a father.
And you don’t need to be a genius to do it. You just need to know how to properly invest and develop a plan tailored to your needs and future goals.
According to a study conducted at the beginning of this year, Pinterest Business in ‘Why Men Plan To Spend More in 2022‘ revealed that, “75 per cent of men that participated are planning to spend and invest more in 2022 to bring their ideas to fruition, and are ready to go big”.
This is in light of the post-lockdown conditions, most faced last year.
With a new perspective in 2022, for many fathers, the path to building financial security and maintaining wealth is still important for generational prosperity. Men are twice as likely to bear the household’s financial burden; in light of the pandemic climate, the goal should be resilience.
So how do fathers build generational wealth for future generations?
In a sit-down with the online learning platform, EduFocal’s CEO/Founder and new dad Gordon Swaby and CEO & President of the wealth management firm, Sterling Asset Management, father of two and new grandfather Charles Ross, both CEOs shared insights into what Jamaican dads should be investing in to secure their children’s future.
What was one of the first investment tips that you gave to your children?
Charles Ross: With regard to investments, the first thing that I did with my children was to buy shares for them in some blue-chip Jamaican companies. The purchases were part of their birthday and Christmas gifts. They might not have been too impressed at the time but it provided an opportunity to talk about investments and create some long-term savings for them.
Gordon Swaby: The first investment tip I will share with my two-year-old son when he gets older is to go deep, not wide. Don’t try and focus on too many things at the same time. Find your niche and develop expertise in it.
How do you think men are investing today with the disruption of COVID-19?
Charles Ross: During COVID-19 there was a lot of retail investing activity in the US stock market and good returns were earned as the market recovered and reached new highs. There were also attractive opportunities in the US dollar fixed income market. However, 2022 has seen a significant fall in the US stock market as the Federal Reserve has started to raise interest rates in an effort to reduce inflation. For the time being, accumulating cash would be a good strategy with a view to entering the market later in the year when prices may be hitting bottom.
Gordon Swaby: That’s a hard question to answer, but I believe that men should be investing in themselves. Developing new skills and exploring new ways to earn. Don’t just rely on your 9-5.
The economy is continuing to recover from the disruption of the COVID-19 pandemic, how can men protect themselves and their assets against inflation?
Charles Ross: Inflation has been rising internationally as well as in Jamaica and this is posing a significant challenge for investors. At the same time, the stock and bond markets have fallen and may fall further as interest rates continue to rise. To protect against inflation, investors will need to earn a return that is higher than the rate of inflation. This will mean earning a return of over 12 per cent on Jamaican dollar investments and over 8.6 per cent on US dollar investments.
Gordon Swaby: Inflation in its simplest terms is a function of supply and demand. I’d say ensure that you’re more on the supply side and less on the demand. To be more specific, manage personal consumption and ensure that you’re maximizing your earning potential.
What investment instruments are available to men with low disposable income?
Charles Ross: Mutual funds, ETF’s or unit trusts are probably the most attractive investments for those who do not have a lot of money to invest or who are starting out on their investment journey. Before selecting a particular fund or unit trust, one would have to do some research on the assets in the fund, the fees that are charged, and the track record of the fund over the last one, three, five, and ten years.
Gordon Swaby: Equities. The only barrier to equities is spending time to understand the basics, but it takes very little cash to start.
What are your top personal investments for 2022?
Charles Ross: There are some relatively short-term US dollar investments with yields of over nine per cent that I am considering and later in the year I will be looking at US equities or ETF’s. Sterling also has a mutual fund which I think will offer significant upside over the next year or two.
Gordon Swaby: EduFocal released a $130-million IPO in February 2022. We’ve been around for 10 years, so the goal is to continue to grow as Jamaica’s number one online learning platform.
What are your investment tips for dads?
Charles Ross: Start investing early and consistently for yourself and also start investment funds for each of your children. They don’t have to be large at the outset but if they are invested wisely they will grow over time and will give your children a jump start in life.
Gordon Swaby: The same advice I’ll give to my son; go deep, not wide. Be consistent and disciplined.
What are your Father’s Day plans –any special plans?
Charles Ross: Spending some quality time with my granddaughter, Alia, is at the top of my list!
Gordon Swaby: No special plans. Spending time with my son and my wife is all I need.