When I say “Off the Grid” most people probably think of independence from the electric company via solar or the ability to have a self- sustainable food supply with a garden or raising livestock. In other words, living like people did many years ago, detached from power companies, grocery stores and town water. Staying with that theme, I would like to talk about saving money and investing “off the grid” or detached from conventional beliefs. There is a real trend developing centered around the lack of saving and investing by the younger people in this country. You could make the case that the job market for younger people is not very good thus not having money to save and invest. But when I speak with younger working people, I do not get the sense that they believe in the same methods of saving and investing like generations before them. Going back just 20 years when I started a career with the brokerage firm, Tucker Anthony, there were the seasoned brokers that typically bought and sold stocks in a few select companies or maybe bought some preferred stock or municipal bonds for their clients. A few of these brokers were buying shares for their clients and their own accounts in a company called “Berkshire- Hathaway” which is a conglomerate holding company whose CEO is Warren Buffet. Well, I probably do not have to tell you that these brokers made many of their clients and themselves wealthy. About that time you could see the industry moving away from hands-on brokers to asset gathering sales-oriented financial advisors. These new advisors were in charge of collecting assets and allocating these assets to third party managers and mutual funds. The stock broker has now morphed into a financial advisor whose time is reallocated to sales and asset gathering rather than stock picking or hands –on portfolio management. Now we are conditioned to have a 401K, 403b or IRA and to defer taxes until retirement when we are led to believe that we will be in a lower tax bracket. Younger working people are not buying into the same story that older generations have just apathetically owned. We older generations have dumped a 19 plus trillion-dollar debt on the younger working people that do not believe that Social Security will be there for them, and they will be forced to carry the increased tax burden of retiring baby-boomers. All these factors make a case for all of us to look to ways of saving and investing differently than even 20 years ago. It is unrealistic to return to the days of being a stock broker. The equity (stock) markets have changed anyway and we as advisors need to view the world through the eyes of those wanting to build wealth in a day and time when the old rules do not apply anymore. Think “off the grid” and explore some non-traditional saving and investing.
Mark Patterson is Chief investment officer with MHP Asset Management and can be reached at (603) 447-1979 or mark@mhp-asset.com.
