The CIO Brief: Invest Like Dad
If you’re a father, you probably have all the required skills to be a world class investor.
Don’t believe me? Here’s my proof:
1. Dads remain calm under fire.
Situation: Your wife panics over the news that plastic is apparently in “everything.”
She goes on a 10 minute tirade, something about how we’re all being poisoned. At one point she casually throws you under the bus for “buying all that cheap water in plastic Arrowhead containers instead of glass.”
Maybe she’s right.
But as a kid you basically drank lead from drinking fountains and ‘the hose’ and you’re fine (probably). Are Dads wild about consuming plastic, no but we don’t immediately panic and start boiling our bottled water.
This is no different than the market freaking out (aka crashing) over the latest headline in the Wall St. Journal.
The Dad / investor solution:
Let her (the market) rant and rave and wait the crazy out. Dads don’t panic.
Okay Brad…I think I get the premise of this article, what other proof you got?
2. You read. This includes boring things like instruction manuals, contracts and financial projections.
Case in point, YOU’RE ACTUALLY READING THIS!
Who reads to learn anymore? Dads do.
ChatGPT be damned, reading is still a core skill for elite investing. Most legendary investors were described as books with legs sticking out of them.
Because with investing, the devil’s in the details.
The Dad / investor solution:
We print out an offering deck, a contract or a prospectus and snuggle up to the fireplace with our dog at our feet, a single malt scotch at our side and read every single word against the crackling light of a holiday fire….like a complete psychopath.
Sure, Dad will likely take a halftime cat nap, but dollars to donuts, he’ll get through it eventually.
Because Dads have a high pain tolerance for boring text. This is probably a boring investing newsletter, yet here we are.
Because there might be a faint, tiny, sliver of a nugget of wisdom in here that could improve our ability to generate wealth for our respective families. So we read.
Okay, that’s a good point, what else?
3. The one time that pretty Starbucks Barista said that nice thing to you and you didn’t proceed to blow up your life.
You walked away with a skip in your step thinking, “hey, the old man’s still got it!” Conveniently ignoring that she works for tips.
She’s the equivalent of that alluring copper mine investment your buddy keeps telling you about. It’s the siren song of quick riches tempting you to risk it all.
The Dad / investor solution:
Stay the course. Stick with diversified investments that generate a lot of cash flow. Not that this was even remotely an option, but Dads don’t get to run off to Mexico with Coffee Lady. Nor can we bet the farm on long-shots.
However, apparently we CAN mix metaphors - sorry, I’d edit more, but it’s Sunday and Dad’s got a hot date with Home Depot.
“Ummm, #3 was a stretch, but we’ll allow it. What else?”
4. Your family spends money like it’s burning a hole in their pocket.
Sports clubs, private school, summer camps, health insurance, home renovations, the extra winter vacation (where the heck was “Ski Week” when we were kids?), etc. etc.
Nobody is going to shed a tear for high-class problems. But no matter what wealth category you’re in, the level of spending (and price increases) is crazy and will not stop.
Sound familiar?
Even if you’re not a Dad, you feel this. This is our government.
Therefore, you have to factor insane fiscal spending and expense inflation into your investment decisions. You’ve achieved a lot. But these days staying still is going backwards. You have to compound capital.
You need to own quality assets that have pricing power to outpace inflation.
The Dad / investor solution:
Dad occasionally puts his foot down on some nutty expense, “NO, for the love of God you cannot have a third Virgin Pina Colada!”
Then you mutter something under your breath about how your childhood “luxury” vacation involved an RV, a tent and a sack lunch…
AND THEN, you go make more money.
You get a promotion, you expand your business and/or you make new investments that bring in monthly income not tied to your effort.
Because at the end of the day, Dad gets it: nobody cares if the goal line keeps moving, just do your job.
5. Dads take calculated risks
When there’s a scary sound coming from the garage who grabs the bat and answers the call?
When it smells like something died in the attic, who investigates?
When a giant spider darts under the bed, who grabs the flashlight and an old shoe?
Well it’s not mom. It’s Big Poppa.
Is this sexiest? Yep, this definitely sounds sexiest. Sincere apologies to our one female reader. I get this isn’t written in stone and obviously women are capable of handling these things. They’re probably too smart to deal with this nonsense.
Regardless, all I know is, just like scooping up rotting dead animals, investing is not for the faint of heart.
The Dad / investor solution:
You take calculated risks. Dad doesn’t get to put his head in the sand. It’s uncomfortable making new investments that may or may not work out. But as my Texas investor friend says, “You have to risk it to get the biscuit!”
“100%, great we’re back on track, now let’s land this plane. To your point, I also have a lot of Dad stuff to do.”
6. Dad pays up for quality
Dads will cheap out on plenty of things (ex: haircuts), but they don’t cheap out on things like tools, suits and golf clubs.
If it’s important - and we expect to use it often - we’ll pony up.
The Dad / investor solution:
Dads pay for quality items and quality investments. Because quality endures and outperforms when the market inevitably turns.
Now, not every Dad is a great investor. We can’t do it all and some Dads aren’t as interested, so they outsource.
But somewhere in every great investor lies a devoted and patient Dad.
Best,
Brad Johnson