3 Things 4-28-25

 Thing One

Investing Lessons From An Old Fisherman

Long before I developed the bad habit of spoiling a good walk by bringing along golf clubs, I had developed a fondness for what can be an equally frustrating hobby, fishing.  Early on, I was so obsessed with the sport that I would spend Saturday mornings watching fishing shows on TV and Saturday afternoons in bait and tackle shops buying what the pros were using.  Then I’d spend Saturday evenings on the bank of a pond somewhere.  Sometimes I was catching fish and sometimes I was getting shut out - no matter how highly priced and recommended my lures of choice had been.  As it turned out what I needed more than high priced lures, which was essentially what I was getting by watching all those commercially sponsored fishing shows, was an advisor.  And as luck would have it, I stumbled onto one.  Tim, a former coworker of mine, looked the part in every way.  He had the scraggly beard, the fishing hat with the lures attached, and the matching beat up pick-up truck and tiny fishing boat.

When I learned Tim was a fishing expert, I started peppering him with questions about lures, rods, reels, etc.  He always had a ready answer.  Then one day, hoping to hear him validate the stuff I thought I had learned about the science of fishing – you know, the moon phases, the tides, etc. - I asked Tim when he thought was the best time to go fishing.  Tim flatly replied with no elaboration, “Whenever you can”.  It was such a simple answer and it made so much sense.  I never forgot it.

I also never forgot the time I went fishing with Tim in his old rickety boat with the 12-horsepower motor that was only still in service because its owner happened to be as skilled a mechanic as he was a fisherman.  We were “putting in” at a dual boat ramp when a fisherman with one of the fanciest bass boats I’d ever seen was backing his boat down the ramp parallel to ours.  He looked over at us and kind of snickered.  That was all Tim needed to teach us both a lesson.  “Nice boat”, I recall Tim saying before continuing, “How fast will it go?”.  The fisherman, speaking about as pridefully as you could imagine, said, “She’ll get up to 65 mile-an- hour.”  And without skipping a beat, Tim replied, “How many fish you catch going that fast?”  The fancy fisherman didn’t respond.  We both finished putting in and went our separate ways.

Tim’s point was, fishing is not about how fast you get there, it’s about knowing where you’re going, knowing what to do when you get there, and having the patience a fisherman needs to have to be successful.

I shared that story as a lead-in to a conversation I had last week.  I was asked about whether now (given all the volatility) is a good time to invest. The person asking the question seemed to be in urgent mode, as if he needed be in a hurry about getting started. I gave a long, winding answer that finally got to the point.  But the next time I get asked I’ll tell the questioner, “The best time to invest is whenever you can but you need to understand investing is not about how fast you get there, it’s about knowing where you’re going and knowing what to do when you get there.  And it’s also about having the patience an investor needs to have to be successful.”

Thing Two

How Does Your Net Worth Compare?

The most recent data from the Federal Reserve’s 2022 Survey of Consumer Finances (SCF), released in October 2023, provides a comprehensive look at household wealth in the United States. According to this survey, the median household net worth in the U.S. is $192,900, meaning half of households have a net worth above this figure and half below. The average household net worth, however, is significantly higher at $1,063,700. This stark difference highlights the influence of high-net-worth households, which skew the average upward. From 2019 to 2022, median net worth rose by 37%, driven largely by increases in home equity and stock market gains, while the average grew by 23%.

Net worth varies significantly across demographics, particularly by age. For instance, households led by individuals aged 65–74 have the highest average net worth at $1,794,600, reflecting decades of asset accumulation, while those under 35 have the lowest at $183,500. The median net worth for younger households (under 35) is just $39,040, underscoring the challenges of early wealth-building in an era of student debt and high housing costs. Education also plays a role: households with a college degree have a median net worth over 11 times higher than those without a high school diploma.

The social-problems experts will tell you these disparities reflect structural factors like income inequality and access to asset-building opportunities.  But some of the more pragmatic among us, would suggest that knowledge is power when it comes to wealth building, assuming somebody has a job – even as “lowly” as a Walmart clerk.  That person could save a small fraction of their salary every two weeks, never receive a raise over the course of their lifetime, and still retire a millionaire.  And they wouldn’t need a four-year degree to understand how to do get that done.  Please pass that along to people think might benefit from it and point them in our direction if you think they need some specific guidance.

Thing Three

Just A Thought 

“There are tigers in the world.  And you can’t deal with a tiger by soliciting his perspective on his hunger.” – T.R. Fehrenbach