Investment tips from CEO dads

While money doesn’t grow on trees, it can grow when you invest wisely. Knowing how to secure your financial well-being is one of the most critical lifelong skill sets you will ever need in life as a father.

And you don’t need to be a genius to do it. You just need to know how to properly invest and develop a plan tailored to your needs and future goals.

So how do fathers build generational wealth for future generations?

In a sit-down with the online learning platform, EduFocal’s CEO/founder and new dad Gordon Swaby and CEO and president of the wealth management firm, Sterling Asset Management, father of two and new grandfather, Charles Ross, both CEOs shared insights into what Jamaican dads should be investing in to secure their children’s future.

What was one of the first investment tips that you gave to your children?

Charles Ross (CR): With regard to investments, the first thing that I did with my children was to buy shares for them in some blue-chip Jamaican companies. The purchases were part of their birthday and Christmas gifts. They might not have been too impressed at the time, but it provided an opportunity to talk about investments and create some long-term savings for them.

Gordon Swaby (GS): The first investment tip I will share with my son when he gets older is to go deep, not wide. Don’t try and focus on too many things at the same time. Find your niche and develop expertise in it.

How do you think men are investing today with the disruption of COVID-19?

CR: During COVID-19, there was a lot of retail investing activity in the US stock market, and good returns were earned as the market recovered and reached new highs. There were also attractive opportunities in the US dollar fixed income market. However, 2022 has seen a significant fall in the US stock market as the Federal Reserve has started to raise interest rates in an effort to reduce inflation. For the time being, accumulating cash would be a good strategy with a view to entering the market later in the year when prices may be hitting bottom.

GS: That’s a hard question to answer, but I believe that men should be investing in themselves. Developing new skills and exploring new ways to earn. Don’t just rely on your 9-5.

The economy is continuing to recover from the disruption of the COVID-19 pandemic; how can men protect themselves and their assets against inflation?

CR: Inflation has been rising internationally as well as in Jamaica, and this is posing a significant challenge for investors. At the same time, the stock and bond markets have fallen and may fall further as interest rates continue to rise. To protect against inflation, investors will need to earn a return that is higher than the rate of inflation. This will mean earning a return of over 12 per cent on Jamaican dollar investments and over 8.6 per cent on US dollar investments.

GS: Inflation, in its simplest terms, is a function of supply and demand. I’d say ensure that you’re more on the supply side and less on the demand. To be more specific, manage personal consumption and ensure that you’re maximising your earning potential.

What investment instruments are available to men with low disposable income?

CR: Mutual funds, ETFs, or unit trusts are probably the most attractive investments for those who do not have a lot of money to invest or who are starting out on their investment journey. Before selecting a particular fund or unit trust, one would have to do some research on the assets in the fund, the fees that are charged, and the track record of the fund over the last one, three, five, and ten years.

GS: Equities. The only barrier to equities is spending time to understand the basics, but it takes very little cash to start.

What are your top personal investments for 2022?

CR: There are some relatively short-term US dollar investments with yields of over 9 per cent that I am considering, and later in the year, I will be looking at US equities or ETFs. Sterling also has a mutual fund which I think will offer significant upside over the next year or two.

GS: EduFocal released a $130 million IPO in February 2022. We’ve been around for ten years, so the goal is to continue to grow as Jamaica’s number one online learning platform.

What are your investment tips for dads?

CR: Start investing early and consistently for yourself, and also start investment funds for each of your children. They don’t have to be large at the outset, but if they are invested wisely, they will grow over time and will give your children a jump start in life.

GS: The same advice I’ll give to my son; go deep, not wide. Be consistent and disciplined.

What are your Father’s Day plans – any special plans?

CR: Spending some quality time with my granddaughter Alia is at the top of my list!

GS: No special plans! Spending time with my son and my wife is all I need.