A recent Money magazine interview with Tony Robbins and Jack Bogle has had me thinking.
Many know who Tony Robbins is (24-hour-a-day, amped-up, good-looking, “I’ll-change-your-life” motivator of humans), but not as many know Jack. Jack Bogle is the founder of Vanguard--one of the largest investment companies in the world--and a renowned investment thought-leader.
This quote from Jack struck me.
“We live in an uncertain world and face not only the risks of the known unknowns but also the unknown unknowns--the ones that we don’t know we don’t know. Despite these risks, if we are to have any chance for meeting our long-term financial goals, invest we must.”
I recently sat down with a client with a fear of the unknown. He has a great job, he’s a young investor and a diligent saver; but his fear of an unknown future is holding him back from what may otherwise be an acceptable amount of risk. Instead, he’s using very safe tools for building wealth. These tools may be appropriate, but they lack risk, and thus, impede growth.
His fears were very personal to him. I could truly hear the concern in his voice. It could be simply paraphrased as
WHAT IF THE WHOLE ECONOMY
GOES TO POT?
I tried to share my own confident outlook of a potentially bright economic future, but any financial planner must admit: Like Mr. Bogle, we don’t know what the future holds.
In my lifetime we could certainly see another recession, depression, or even great war. Even more disconcerting, we could see something we haven’t even seen before. “The unknown unknowns” as Jack puts it.
On the other hand, we could see an age of unprecedented prosperity. Emerging countries, such as many in Africa and Asia, could make political, monetary and economic progress. Expanded access to human rights could pave the way for families and small business owners to flourish and grow.
Or perhaps our uncertain future is some messy combination of all these things.
My point is this. I can’t see into your financial future. No financial advisor can, and you should run far away (far, FAR away) from any who believe they can. All I can say is I believe individuals, families, and communities have an inherent desire to grow and prosper. And most leaders of nations (including our own) want the same for their citizens.
In this light--and despite the uncertainties and dangers ahead--I believe learning, growth, and progress tend to win out over time. Businesses innovate and create new products. Efficiencies are discovered. A father and mother work tirelessly to put their children through college, and on track to a brighter future than they ever had.
I know there’s a chance things won’t work out, but I believe there’s a better chance things will. Our financial futures are counting on it. So “invest we must.”