I think it’s fair to say that Father’s Day is the ultimate participation award. There are certainly exceptions, but I suspect most fathers would agree that the 3rd Sunday of June each year is really just our trophy for showing up to play. Ask my kids who’s in charge at our house and they’ll laugh at such a silly question. Ask who’s next in command behind mom, and I’m sure my daughter gets the nod…she’s only 3. It’s the smart choice, as it’s painfully obvious she’ll always pull rank on me as long as she’s armed with those eyes and her mother’s smile. At least I know I’m a solid third in the pecking order as long as I continue to dominate driveway basketball games versus my sons. Even though they’ve realized dad is just another kid mom needs to keep tabs on, both of them have no choice but to respect me as the king of the court for now. That’s how it works on the blacktop boys. Winner stays, loser walks!
Sure, knowing pick-up basketball protocol isn’t going to do much for my boys in the long run just like teaching them how to burp the ABC’s won’t be of much help past the fourth grade. Same goes for convincing my daughter that girls shouldn't kiss boys until they’re married. It’s my crowning achievement as a parent up to this point, although I fully expect it to backfire on me much sooner than I’d like to think! But isn’t this the kind of thing that endears us most to our fathers? The sharing of life lessons, advice, and street smarts that dad collects throughout his life that any number of teachers couldn't pass along? Things like learning how to ride a bike, how to throw a baseball, or the right way to shake someone’s hand to tougher lessons about hard work, integrity, and honesty. There's a lot of truth behind an old saying that one father is worth more than a hundred schoolmasters. A lot of jokes too, but hopefully mixed in among all of dad's "less useful" lessons are the more meaningful ones that will stick with us forever.
Much of what we learn about money is passed along in a similar fashion. I bet we've all heard these a time or two thanks to dad -
“Money doesn’t grow on trees.”
“Don’t spend money you don’t have.”
“Start saving early.”
Great tips to always keep in mind, but unfortunately that's as far as the conversation about money usually gets between parents and children. That's really nothing new. Talking about money has long been taboo right up there with chats about politics and religion. However, we're seeing that discussion go deeper in some families as more and more parents are encouraging their adult children to meet with us regarding their finances. These engagements often times come on the heels of major life events like a new job, getting married or starting a family that raise questions regarding financial planning. It seems people are deciding that as life gets a little more grown up, a conversation with a professional is better than just another "talk with dad." And for good reason. Today’s younger generation, the Millennials (and borderline Gen Xers like me), are facing a much different world than their parents. Gone are the days of company pensions and generous benefits packages. Social Security is a carrot on a string, dangling out in the distance to be devoured before it’s ever reached. Retirement prospects likely will rest entirely on one’s own shoulders. Couple those challenges with significant amounts of student-loan debt, stagnant wages, and longer expected life spans and simply relying on savings lessons from your childhood won’t help most individuals ever really feel comfortable with their money.
Generational tendencies aren’t helping matters either. Millennials and those often forgotten younger Gen Xers experienced pretty severe economic events during their formative years/early careers. The dot-com bubble and 9/11 attacks provided a solemn start to the century and within the same decade the 2008 great recession hit hard. Whether still in school or relatively new to the workforce, members of both generations felt the impacts as either they, their parents, friends, or co-workers lost jobs, homes, and life savings. That has left a wound that’s proven hard to heal. According to a survey done by bankrate.com last year, nearly 40% of Millennials prefer to keep their savings in cash rather than the stock market. Who can blame them? Plenty of seasoned investors have had trouble recovering from all of that market chaos. As a result, many comparisons have been made between these “kids” and their grandparents who either experienced or felt the aftermath of the Great Depression. Like Grandma and Grandpa, they are proving to have very good savings habits as a result, but the question is, can they afford to be just as risk averse?
We've previously written about helping people become fearless investors. That will be all the more important for young, cautious investors going forward. That doesn’t mean trying to convince them to blindly go all in on stocks while burying their heads in the sand. Instead, it’s helping investors understand their risk tolerance and demonstrating to them how that aligns with the goals they have set for their money. Today’s younger generation is not only saving for retirement, but also focusing on shorter term objectives like paying off debt, funding college savings accounts, establishing emergency funds, and saving for that increasingly expensive first home. Recognizing if their risk preferences will allow them to reach those goals will be critical in formulating a successful investment strategy. Risk will be necessary. It will be uncomfortable at times too. But knowing how much to take and what it will do for them in the long run can be the key to sticking with a plan.
Father’s Day is a great opportunity to reminisce and thank dad for all he's done for us but we should be sure to also appreciate those times he really didn't do anything at all. I like to think that the individuals we have the opportunity to work with will forever be much more grateful for dad's nudge to come see us than anything we actually do for them. And that’s how it should be. Like teaching us to ride our first bike, fathers are great at giving us that little push in the right direction before stepping back to watch us take off.
