Reader's Write - Geriatric Investing

Many articles which purport to give financial advice start with a disclaimer. The following article merits no such legal caution but that is how I am going to begin anyway. I left school at the ripe old age of fifteen, never entered the rarefied world of the academic, have had no formal financial training and spent a good part of my life teaching Industrial Arts. Given this nondescript background any comments I make will never lead to a conviction in a court of law. What I have to offer are many, far more than most, years of experience which have involved trying to think through some of the issues connected with investing especially as they concern those of us of “riper years”. My intention then is not to try to provide direct financial advice but rather to look at questions such as: Why do we invest? How do we invest? What role does our age play in the whole investment scenario?

Let me suggest possible answers in the reverse order beginning with the third question. Life is full of stereotypes, some valid and many not. I once had a conversation with a retired gynecologist, and he made the comment that age is a question of biology not chronology. What we so often do, once we know a person's age, is limit their capabilities, whether they are very young or very old. The assumption is often made that an old person is no longer capable of making good financial decisions. Warren Buffet gives the lie to that one. But more importantly the common consensus among financial gurus is that after a certain age people should only invest in very conservative areas. Well may I say that whatever your age you are a fool to invest money which is needed for day-to-day living. However, some of us have reached the age when the horizon is no longer distant and when we have taken account of foreseeable needs, and this is largely a matter of probability not certainty.

The question is, what will happen to our assets when we have shed “this earthly coil”. Usually they will go to relatives, friends or some charitable organization. Given the spendthrift nature of many young people or the exorbitant fees paid to the CEOs of many charitable organizations our assets will probably have a short shelf life. If this is so, why should we spend our remaining years with boring bonds which do little to stimulate our waning mental faculties. In the light of neuroplasticity why don't we produce a few new neurons by engaging with investments which demand an alert, inquisitive mind and will probably take us in to new and stimulating pastures?

Given the above the question, how we invest has many possibilities from conservative to speculative. Given my own experience, that of my wife and countless friends, I would strongly advise against having a financial advisor. That is unless we are conscious of the onset of dementia or have slipped into the mindless routine of spending most of our hours in front of the “idiot box”. Many elderly people are capable of following political, demographic, cultural, economic and other trends and these are ultimately the drivers of the market.

Finally, we must ask the question why we invest and this for me is the most important question of all. Money often begets more money but why grasp for more money? There are, of course, many, many honorable and useful avenues to which our money can be directed. But if our sole purpose is to make more money for the sake of making more money then I think our time could be more profitably spent engaging in activities which benefit society. I am amazed at what seems to be the multitude of millionaires who waste their declining years simply watching the counter turn as their assets grow. Like the rest of humanity, they will finish up with a 6' by 3' plot of ground or even less if cremated.

Let me end with words used in the parable of the rich farmer on his impending death. “Then whose shall those things be”.

Roy Godber

A Canadian MoneySaver Reader