Wow, we have all just celebrated the Fourth of July 2020, one of the strangest of our lives. No Lodi Lake fireworks, no family picnic, just masks, social distancing, and washing of hands.
My dad loved all things America including the Fourth of July. He came here on a ship as a young boy of seven from Germany in 1928. Germany had been our enemy in World War I and German kids were not welcome on the playgrounds of his youth. He learned to speak English quickly to become more American.
At 17, dad joined the Army Air Corps serving from 1939 through 1945 as a B-17 bombardier and bombsite maintenance mechanic. After the war, my dad became a minister and as we grew up, he preached his love of America right along with his love for Jesus. Our house had a flag out front. He loved patriotic music — singing along in a very loud voice with happy enthusiasm.
In my years as a Financial Advisor, the current name of stockbrokers, I came to know many similar men.
The makeup of investors is varied and a good cross section of our community but has some very distinct groups.
Many investors are retirees or soon to be retirees. As a young businessman of the mid 1980s, getting started here in Lodi, many of my first clients were my mom and dad’s peers. They all had grown up in the depression, lived through World War II, and worked to live a decent life while raising families and doing their part to make our world a little better.
Another cohort of the community that I came to know well are the small business owners. In Lodi, grape growers, winemakers, managers, printing shop owners, real estate brokers, builders, manufacturers, teachers, firemen, bankers, restaurateurs, attorneys, accountants, doctors, nurses, and dentists.
Many of these clients are people of great competence in their chosen field. Perhaps that life success is one of the major factors leading to their ability to earn a better income, and to save a part to later invest. I mean they still, like everyone else, must pay taxes, cover the monthly household expenses, and raise those growing kids.
All these people had exercised their freedom to invest. We live in the USA. In America, we have a capitalistic economic system wrapped in democracy. That means, of course, that anyone of us can invest.
OK, not everyone learns to save. Not everyone stops using credit cards. Not everyone is willing to make the hard life choices that push towards more education, more skills, and frankly more hard work.
Sometimes, even often, my clients told me they had relatives they would like to have me meet. Really nice people, but not a dime of savings. Just never learned how. The in laws my clients worried might never prepare for retirement.
We all are participants in this American capitalistic economy. We are all consumers. We buy things we need, want, and sometimes just like. As we buy stuff, we know that in the price we pay is a markup to be split by the store, the shippers, the boxers, and the manufacturer. If we didn’t know it before, we do after watching a few episodes of Shark Tank.
When we buy services, not only do we pay for the work being done, we are also paying enough to cover the salaries of all those at that company, and leave a profit (again after taxes) to the company owners. And who are the owners?
America is a place of innovation and very rapid change. Freedom. When a company is first getting started, the owners are those wizards that come up with the latest idea. Isn’t it amazing that many of them start in someone’s garage? Maybe that’s one of the birthplaces of dreams.
As the company grows and they need more capital to move more volume, they may go to their bank or to private investors. If they grow enough and get to be strong enough, they might choose to go public. Going public is how the innovators get rich. You’re even going to know a few of the names I’ll list in a bit.
Going public means that the ownership is now going to shift away from the innovator to public investors in shares. Once this transition occurs, the nature of the management, structure, and progress are all subject to strict ground rules, disclosure requirements, outside audit, and detailed professional evaluation by the research teams of the investment world.
Here is where I, as an American, can exercise my freedom. I can become a part owner of any of these public companies and own businesses started by Bill Gates, Steve Jobs, Jeff Bezos, Warren Buffet, and many others.
Dad loved America for many great reasons. I’m glad to say, I love America, too. I’m especially glad, I was taught about the freedom to invest.
Financial Advisors offer free lessons. Go see one.
Phil Lenser is a Retired Lodi Financial Advisor with over 40 years experience now sharing investing ideas and insights.