fbpx
Wealth Management Simplified

Patience Still Pays

Learn More

What our clients are saying

Tumwater allows us to enjoy our retirement.

Paul M, 6/17/2021 

Read Disclosure here.

My first contact with Ben occurred when he was the Financial Advisor for my former employer… The first one-on-one meeting we held to discuss my financial future
was a total wakeup call (Yes, there were tears). He laid out an honest appraisal of my current financial situation and what I needed to do differently to move positively
toward a reasonably comfortable retirement. I took his sound advice to heart. Last year, I was unexpectedly laid off and that led to my decision to retire at the age of 70. I reached out to Ben and he immediately set up a time to talk about the best options for my 401K. A plan to roll the funds into an IRA was set in place and implemented by Ben and his co worker, Jackson. I am confident that Ben has my best interest at heart.
Communication is never an issue—I always know I will receive honest, appropriate guidance.

Patricia A, 6/17/2021 

Read Disclosure here.

Tumwater has helped my family think about our financial future– but in a uniquely holistic way.
I really value being able to ask for Ben’s advice on any financial topic, be it immediately related to our investment planning or not.
Ben sees and understands how the big picture impacts the tactical decisions he helps you make.

Matthew M, 6/17/2021 

Read Disclosure here.

Tumwater has helped to make us feel financially secure over the long run because of the sensible investment strategies Ben has employed for us.

Cherie and Jim C, 6/17/2021

Read Disclosure here.

They have helped me feel safe with my financial future and provided me a valuable resource to come to with any questions about financial decisions and planning.

Jack C, 6/17/2021 

Read Disclosure here.

Through Ben’s guidance for over 10 years he has us brought to a comfortable financial position heading into retirement.

Nic C, 6/16/2021 

Read Disclosure here.

You have been a valuable resource for others in our family. You have gained our trust and respect and this is very important at our stage in life!

Cherie and Jim C, 6/17/2021 

Read Disclosure here.

We have 100% confidence that you know what you are doing which is so much more that most professionals who call themselves a financial advisor.

Kealy B, 6/16/2021 

Read Disclosure here.

[I] sleep well at night knowing Ben and his team are taking care of our investments.

Kealy B, 6/16/2021 

Read Disclosure here.

I have complete trust in Tumwater, they alleviate a huge burden of stress in my life.

Jenni Y, 6/17/2021 

Read Disclosure here.

Tumwater provides a thorough explanation of my assets and how best to meet my needs.

Ruth M, 6/17/2021 

Read Disclosure here.

Tumwater has been a great resource for financial planning for my future and eventually my retirement. I’ve worked with Ben to find the right balance of investments that suit my long-term saving goals. I also have appreciated Ben’s help with other savings goals, whether it’s regarding an emergency savings fund, or saving for a specific purchase. He is always willing to answer my questions and explain the rationale behind investment moves. He also reviewed my 401(k) plan which was very helpful!

Brooke W, 6/16/2021 

Read Disclosure here.

Tumwater has given me a place to have my money managed, to allow the money to work for us, thereby increasing in value every day. Tumwater invests the money into funds that grow, watches those funds to stay [diversified]. You hire a Financial Advisor to focus on increasing the value of your saved money. This allows you to focus on your own profession to succeed. The money invested then grows and is there for life’s big bills, college for youngsters, retirement, etc.

Paul M, 6/17/2021 

Read Disclosure here.

The service provided by Tumwater has met all of my needs.

Jack C, 6/17/2021 

Read Disclosure here.

I find the entire staff consistently responsive. This is significant for me. Once I recognize I need information, it is helpful to receive that information quickly.

Jenni Y, 6/17/2021 

Read Disclosure here.

Patience Still Pays

Beware of endeavoring to become a great man in a hurry. One such attempt in ten thousand may succeed. These are fearful odds.” – Benjamin Disraeli – former Prime Minister of England


Patience has got to be the most talked about, least practiced virtue in investing.

These days, the arch of technological progress has allowed us all to be impatient at almost every level.  Instant streaming services, social network access, Amazon’s next day delivery, and the nearly instant spread of information makes the human mind expect immediacy in almost every area of life.

Of course, the same was bound to be true for investing.

The latest, most egregious example of investment impatience has to be the new trading app, Robinhood.

It’s an app designed to allow (read: encourage) people to day-trade stocks, options, cryptocurrencies, etc.  When you open it, the app lights up like Christmas.  Robinhood was literally built to nudge users to take on more risks, egging them on to try to make more money, faster.  It was designed with all sorts of clever ways to keep users on the platform, constantly trading.

Robinhood is the antithesis of disciplined, patient investing but it’s added 3 Million users during the Covid lockdowns.  I guess impatience pays (at least it pays the creators of Robinhood).

Recently, the stock prices on companies like Tesla have skyrocketed.  The “Fear of Missing Out (FOMO)” on this kind of growth has led “investors” of all ages to buy up these stocks so they can participate in the wave.  Five tech companies now constitute over 24% of the S&P 500 Index.  And all of this has happened in the span of half a year.

When you are constantly hit with stories of overnight millionaires, and countless “how to get rich” videos all over YouTube, Twitter, Facebook, Google, etc., it’s easy to feel the need to jump into trading platforms like Robin Hood and start buying speculative stocks.  Everything about these platforms and their tools are designed to profit from that impulse.

Patient investing is hard.  But remember, when you invest in stocks, you’re buying businesses.  Not trading cards.  Nothing important in a business changes every 15 minutes.  It can be boring, but it’s still the best, most reliable, path to build wealth for the long run.

Play the Long Game

Building real wealth is the ultimate long game.  The financial author, Nick Murray, compares it to planting an oak tree.  You plant the acorn, give it the sunshine, water, and time it needs to grow, and it can become something incredible.  But if you dig it up every six months (or, in the case of Robinhood, every six seconds!) to check on its progress, or make adjustments with no guiding principles, you run the risk of damaging the tree.

The compound nature of investing means the overwhelming majority of the return in any long-term investment comes in the last few years.

If you invest $500/mo. at a 7% return, you will have:

    • $86,000 after 10 years
    • $1.3 million after 40 years

 

Compare those results to the contributions you would have made:

    • $60,000 of contributions after 10 years
    • $240,000 of contributions after 40 years

 

Think about that – after a decade of contributing $500/mo., you would have deposited $60,000 and only earned $26,000 of return, or investment gain.  After ten years of diligent saving!  Only 30% of your account balance is earnings.  The rest is money you put in (and, just as importantly, didn’t take out).  That doesn’t feel like a lot of progress after ten years.

But if you stick with it for 40 years, you would have deposited $240,000 and would have earned $1,060,000 in return.  82% of your account balance is growth on the money you’ve deposited!  Only 18% of the account balance is from your deposits!  And all of this assumes you never got a raise or increased your savings rate in any way, which isn’t likely over the course of 40 years.

These results are possible, but only if you stick with saving and investing year after year and decade after decade.  They are only possible if you avoid the fads and irrational fears so many people fall victim to.

Successful investors are patient investors.  Are you one of them?

We explore the topic of patience and more in our new 9-Email Course: Foundations of Financial Success.  Sign up here for free!

CUT THROUGH THE NOISE. LEARN WHAT REALLY MATTERS IN YOUR FINANCIAL LIFE.

Sign up for our 9-day, Foundations of Financial Success Email Course.

Learn more

ARE YOU A CURRENT CLIENT?

Access Your Accounts

TUMWATER CLIENT LOGIN CHARLES SCHWAB LOGIN