This month, our founder Steve takes us on his walk to work, to demonstrate how growth will always continue in the long term.
Why do we grow? The answer to that, for me, is because I am a gluttonous little git. 6 ft 4 inches and 18 and a bit stone of pure effeminate man. My parents and 3 brothers take up two-thirds of a family photo and I’m covering the rest. I grew because I did what I was told. I ate my greens. I ate my dinner, my pudding, and most of my brothers’ dinner too. And I loved it!
I want to explore this a little today. The beneficial effects of doing what you’re told, which in effect is learning from the experience of others. But also, sometimes there are dangers in doing so. I did what I was told, because the people that told me to (parents and grandparents) were brought up in a depression era and the rationing of the War. Food was hard to come by and expensive, so you had to eat it all. Look at me blame shifting! It’s actually because when it comes to food, I am greedy!
My parents and grandparents who taught me to clean my plate, their experience went back to their own experience of not having a lot of food available. Watercress and fat sandwiches are my Dad’s favourite thing to recall. That was what was in their memory and their experience only. Generations previous to theirs, may have had more abundant food sources. In the early 1900s food was aplenty (I’ve not researched this; it is based on a vague recollection of ‘Supersizers Go Edwardian’ With Sue Perkins and Giles Coren). Although, I doubt that was the case for my family; having done the family tree, it appears we were largely matchstick makers living in doss houses in Shoreditch in the 1800s or sent to Australia…
So, one generation’s experience may not be necessarily what happens more often, that may have been the aberration. Looking back further is important to truly understand.
Whose experience do you trust and is that enough experience? Here at Lucent Financial Planning, we trust the experience of world stock markets to come through every geo-political, economic, disease-driven or other crisis us humans can throw at it.
Shares in companies earn money because people want to go to work to improve their lot and the lot of their loved ones. This is all you need to understand. That intrinsic human motivation called ‘love’ drives people to earn profits in the companies they work for. Because people want a better life, they spend their days working out how to do things more efficiently so they can earn more money and go home earlier.
“Bloody hell, Steve”, I hear you sigh! “Work is a nightmare!” Or if you’re retired, you may recall the bad days at work, but hopefully they are outweighed by happy memories.
I am lucky enough to be able to walk to work most days. On my way, I pass a nursery, where parents are dropping off their toddlers, who sometimes fall and burst out laughing or start to cry. Their parents are depositing them there to learn to make friends and so they can go to work to earn money to give them a better life. Those parents would probably much rather hang around with them all day. I also walk past a school, full of teenagers messing about and laughing. Ever noticed how much more kids laugh than you do? Where’s that joy been bashed out to? We need to get that back, people! When in class, they are learning useful skills for work and for life. School days are supposed to be the happiest days of your life, is that because you are learning and surrounded by people you can call friends? Isn’t this what we should all strive for, throughout the rest of our life? Learning surrounded by friends? There’s your ‘purpose’ for retirement. Learn new things amongst new or old friends.
Through all this, I am surrounded by traffic, people dropping their kids off (that’s love right there) then going off to work to afford the great things they want to give those children a better life. By now, I have started to saunter rather than walk, enjoying the love that is all around. Although once, in my dream-like state, I dropped my lunch box, tried to pick it up and accidentally kicked it further along the road. Looked up and saw my nephew walking towards me to school, mockingly laughing at me. Not much love there at that point!!
I also walk past 2 retirement / care homes. The residents’ children, whom they no doubt once dropped off at the school, are now stopping by to see them, to take care of their parents.
That is all on one street, in one town on one pedestrian’s walk to work. But it is every working day, over and over. And this has happened for thousands of years. Do you know, one of the signs of ‘humanity’s’ evolution is finding bones of people with severe bone breakages that have been healed? That person would have died if they weren’t taken care of by a family member or friend. There are few examples in the animal kingdom of this. It is that same motivation that drives us today.
Here's some proof… inflation rising and S&P 500 (500 biggest companies in America) dividends and growth - from 1960 to the end of 2020 this happened:
Consumer Price Index rose:
9 Times
Cash Dividend from these companies rose:
30 Times
Source: S&P 500 Earnings History: 1960-Current, NYU Stern School of Business, Aswath Damodaran. Raw data from Bloomberg and S&P
And, by the way, the Capital Value of these companies rose:
70 Times
Source: S&P 500 Earnings History: 1960-Current, NYU Stern School of Business, Aswath Damodaran. Raw data from Bloomberg and S&P
Stock market growth and earnings go back way longer than 1960. It is a fairly relentless growth rate in corporate earnings that, if you own shares of those companies, you are able to benefit from. In the short term, you may experience some knockbacks. But wait. Wait, my friend, and you will be rewarded, as the power of love will come through. When things go wrong on a national or international stage, what do you do? In Covid Lockdown, what did you do? You didn’t sit back and say “stuff it, it’s over” did you? Well, I didn’t. I gave what I now call my ‘Braveheart speech’ to all the staff at Lucent, that we were not packing it in and that no one would lose their jobs because of this. Furlough was unheard of at that point. I hung up the Teams call then, got scared and started calling people. Markets had declined by 30% in March and now was a GREAT time to invest. So, I started spreading that message to people I knew had cash to invest. I proactively went after that as it was good for those clients to get invested when there was such a huge sale on! A massive discount in the purchase price of the great companies of the world. Those clients earned more money because of that. We earned more money because of that. The people we love (My Lucent Staff! I didn’t want them in the doodoo) didn’t have to be laid off, they could carry on doing their great work and with money from that help themselves and the people they love. There were no furloughs, there were no bounceback loans or any other loan taken.
Not every business was fortunate enough to be able to do this. But no doubt they all tried, and on average, we all got through it somehow to be where we are now. This endeavour, driven by love and human ingenuity is what drives stock market growth and why you should invest.
While there's life, there's hope. Live as brave men; and if fortune is adverse, front its blows with brave hearts. Marcus Tullius Cicero (Roman Statesman and Philosopher)
The year ahead, 2024, has the most elections in any one year than ever before. Around 49% of the world will be voting in 2024 on the future of the government of their country. Many, of the remaining 51% do not have that right at all. We will vote in the UK (studies show that altruism is what brings wealth, vote accordingly!), so will the US and India.
We have had some questions recently about whether the General Election or any other election will affect stock markets. I recall this from before Trump got voted in last time. The consensus was that it would cause a massive decline in stock market values. What happened? The complete reverse. Whoever is in power, this does not affect the basic motivation of ‘love’ being the reason people go to work. Whatever happens, we think “this is my one life, I need to make it as good as possible, I need to work out a way to get over these head winds”. In short, people and markets ultimately will get over whatever trouble or assistance a government is giving them.
You can see that in the chart below; relentless growth, whoever is in power:
Whatever is happening in the world, NOW is always the best time to invest. Take a look at the chart below. People worry about the ‘Bear Markets’ which are so small and insignificant compared to the massive ‘Bull Markets’ that have been experienced. You worry about a potential loss if you buy in at the wrong time, I worry about the massive loss of what you could have earned by not investing. Take heed… listen to the years of experience the market has and grow your wealth.
You can see these charts in clearer detail, along with many others by downloading the PDF below:
Lucent Financial Planning Are Growing too.
Nope, not because I, being massive, find it attractive and am a ‘feeder’! We are growing for you.
Lucent Financial Planning has grown to 18 people, including those that have bravely volunteered to come and work with us but are yet to start. Why are we growing? It’s because our service is in demand from people looking for something better from their financial adviser. We want to help as many people as possible so that they can get the life they deserve. Hopefully then, other financial advice groups will follow our lead, and everyone will be better off. Also, ‘early adopters’ will not face a drop-off in service if we have a team in place to deal with everything the world throws at us.
Since winning ‘Lifestyle Financial Planner of the Year 2023’ in September, we have had increasing numbers of people approaching us to work with us. But also, wanting us to work for them! We have taken on multiple clients who were dissatisfied with their existing adviser and wanted:
To actually see someone! It’s amazing how many people are being charged but do not have access or see their financial adviser.
A more prompt response to their queries
Proactive action and suggestions from their adviser
A more rounded service to also help with their wellbeing. I read (but can’t remember where! Sorry to the researcher that I am unable to cite you) that 51% of arguments between couples are financially related. We want to take them away and have a crack at some of the other 49% too!
Full, holistic advice on all of their assets
The total cost of advice and investment at around 30% lower than average (Next Wealth Report, September 2023)
And…. Access to great events like this:
Frank Bruno MBE in an interview with our very own Hannah Knight in April!
Having been at the end of a punch or two from Hannah, I fear for Frank! Let’s hope he will be ok. That Teddy Bear Cardy is pretty awesome, Frank! Looks like something I would wear…
If you’re a client, we hope you can come! If you’re not, this is the sort of thing you are missing out on; great advice wrapped in great fun.
Lucent Lovers, if you have any close friends or family that you want to get the great help you receive, then we can make space for them to come and meet us in an informal environment before Hannah gets her gloves on, at an ‘Evening with Frank Bruno’.
We spend the majority of our marketing budget on these events so we can meet a few potential new people at the same time as having a great time with you. That way, everyone benefits.
End of tax year… it’s the final chance to:
Make the massive income tax savings that pension contributions allow.
Make ISA contributions so that your money can grow in a tax efficient environment.
Benefit from 30% income tax refunds in VCTs.
Sell assets with capital gains tax and invest tax efficiently and use your £6,000 capital gains tax exemption.
We hope you have enjoyed this month’s newsletter, and we would welcome the chance to become your adviser, your counsel.
If you already have an adviser or want to experience true lifestyle financial planning from the ‘Lifestyle Financial Planner of the Year 2023’ then why not come and see for yourself!
We offer two meetings at potentially no cost to you. In the first, we will see how we get on and whether we are a good fit to work together. After all, we will be working together for a long time.
At the second meeting, we will show you exactly what we would do for you and how we would work together. There is a charge for this as most people think it is absolutely awesome.
However, if you don’t and think it’s a load of rubbish, we have a ‘satisfaction guarantee’ so you don’t have to pay. If you think it’s rubbish, I don’t want your money as that would make me feel ashamed of myself.
If...
Your adviser is from a large national firm, or a small local one that never replies to you, I fully expect we could be more cost-effective and also have a more rounded and enhanced service. Or
You have no idea what your financial plan is Or
You want to see what award-winning Lifestyle Financial Planning is like
...then get in touch on:
0121 705 1000 or info@lucentfinancialplanning.co.uk
Or visit our website, and check out our advisers: www.lucentfinancialplanning.co.uk
Interested in finding out more about investments? – email us on: info@lucentfinancialplanning.co.uk saying: Give me Ubuntu!
Don't take our word for it... read client testimonials received from some of our clients.
A financial planning company with a difference! The team at Lucent really put your financial wishes, aspirations and dreams at the forefront and they do everything possible to help you achieve this. They have a friendly, very knowledgeable and fun way of helping you through financial matters. Who would ever have thought that sorting your finances could be a fun and interesting experience!Lucent have helped me with my pension planning, how to understand investments and potential implications, but most importantly have given me peace of mind as well as a good long term retirement plan, which also gives me the means to enjoy myself now.Thanks to you all at Lucent and I look forward to many more years of working together with you. M Smith
Excellent company and fantastic experience in terms of financial planning. Steve provides a straightforward analysis of financing for the future including lifestyle planning, and gives assurance that, regardless of how much is invested, this will be done so in the right way and your money will be looked after. Refreshing change from some of the larger providers in the market who are more keen to tie you to their products rather than assess the global view. S Mitchell
A word on our reviews:
In the last year we have had a financial advice marketing company state that:
I read financial advisers' reviews all the time. Some will have one or two like yours, many do not. But every one of your is amazing. These are the best, most personal reviews of IFA service I have ever read.
Just this week a financial advice company approached us about how we get such great Google reviews. Was there a trick we could share to help them get similar reviews?
No trick, we just aim to do a great job, fill it with fun and then say, if you liked it, leave us a Google review. The rest speaks for itself.