I write a commentary each week on the portfolios I build at Motif Investing, based on the best picks from each week’s edition of Barron’s Financial News. Barron’s consistently beats the market with it’s picks, and scouring Barron’s each weekend has become a core component to my diversified portfolio. I publish the article (and the portfolio at Motif Investing) each Monday morning before the market open, and I distribute it on Medium, Twitter, Facebook, LinkedIn, and straight to your inbox with our free Money Companion LITE edition. I invest in every portfolio I create around noon each Monday.
I usually invest around $500 – $1,000 in each portfolio, as well as $500 – $1,000 for various special portfolios that are built based on specially themed analysis by Barron’s. This happens usually two – three times each month. I’ll let you know what I’m doing, and I always give you the chance to do it before I do it. It’s just that simple, and it’s the way it ought to be.
If you’re following along and doing the math, this means that I’m investing about $35,000 – $50,000 each year in portfolios at Motif, built on the picks I dig up each week in the 100+ pages of Barron’s Financial News.
Here is 7 Great Benefits to Piggy Backing of My Hard Work
- Flexibility. You don’t have to invest in every portfolio we create. You pick and choose. When a portfolio makes sense to your situation, you can invest. Or when you have the cash, you can invest. The variant to this is when you don’t have the cash, or when the portfolios don’t make sense to you, you don’t have to invest.
- Liquidity. You can sell on any market day. That sale will become cash in your account in 4 days (T+3 is industry standard, which means Trade Date + 3 days). As simple as that. Of course what you invested in might be less when you need to sell it, and there may be tax implications. But the lesson here is if you need to go to cash, you can. Easily.
- Access to your Cash. You can transfer cash easily between your checking account, your Motif Investing account, and any other account (other brokerage accounts) you link to your Motif Investing account. This has come in handy more than once for us both to make investments on Motif as well as to get cash into my checking account.
- Investing Flexibility. You directly own the stocks in any portfolio at Motif. Like the portfolio but not one of the stocks in it? Cool. Delete that stock out the of the portfolio. Want to add a stock to the portfolio? Cool. You can do that too. Most people don’t go to these lengths, but you can if you want.
- Direct Stock Ownership. Owning the individual stocks in each of the portfolios at Motif allows you to control your taxes better. Long term capital gains are great – and you can optimize those in your portfolio by the choice of when to sell and when to hold. More on that later. But it’s a huge benefit.
- Transparency. Owning the individual stocks also creates something every experienced investor wants desperately – transparency. You can see every stock in the portfolio. If I rebalance the portfolio you can see what I did and choose to rebalance if you want. More transparency here than any other diversified strategy this side of complicated strategies built for very high net worth investors.
- Easy Minimum Investment. The minimum investments are only $250. Do the math here. If you invested in every weekly portfolio you’d invest $13,000/year. Don’t have that? Get a side hustle. Or pick and choose the week’s you invest. Or link another brokerage account and transfer some to Motif when you’re running short. You have a bunch of options.
Thirteen Thousand Dollars. Did I Lose You?
$13,000 isn’t such a bad number to shoot for. But I understand it may trigger stock shock. I get it. It may seem pretty aggressive to some of you. You’ll get there. And for those that are already there, then let’s figure out the best way to save that money. But when it comes to your long term goals, here’s why it makes a whole lotta sense.
Let’s diverge from Barron’s and Motif Investing and all that jazz. Let’s just talk about numbers. What if your portfolio did so well that you are able to achieve a 12.00% return over the long haul. This is aggressive. Some financial experts will give me a hella hard time even hinting this number. The thing is, after three decades of investing, and some hard work, I think it’s possible.
I wouldn’t be doing all of this, and working my butt off each weekend, if I wasn’t trying to hit the same type number for my portfolio returns.
Disclosure Section #1
Yes, disclosure is needed here. The closer you are to retirement, or needing this money, the less aggressive you should be and the less exposure to the stock market you should have. Second disclosure? No projections or results are guaranteed, ever. And I’m not making any specific investment recommendations here. In fact, part of the hard work and getting serious is consulting a financial or investment advisor. That’s not me.
Now back to the fun. Or hard work. However you take it.
How old are you? Invest $13,000/year, and depending on how old you are, 12.00% per year returns (after taxes and fees) will provide you this by the age of 65 (Source, Investment Goal Calculator at Bankrate.com):
There are a lot of lessons to take from the table above.
If you’re 35 years old and haven’t started saving for retirement yet, is all lost? The table above would suggest not. But you’re going to have to get serious – with getting to work understanding investing, and getting to work in saving some cash.
Example One – Age 35
Let’s say your 35-years old and your household is making $100,000 each year. Isn’t saving 13%, or $13,000/year worth the security of $3,513,804 at age 65?
Here’s why it MUST be important for you. Whether it means allocating $13k out of your budget, or doing out and getting a side hustle that will provide you the money to stash away.
Most financial professionals would suggest you plan on 4% of your retirement savings if you retire at age 65, based on a variety of things that I’ll discuss in future articles. Accepting that number means you’ll be able to plan on $140,552 each year. Not a bad number. But given inflation is inevitable over the next thirty years, it’s probably right in line with what you’ll need.
Cant’ figure out how to start saving? Getting serious about it. Even making a choice to save a little more than your comfort level? Then I’d have to seriously ask you the question whether you’re serious about getting to where you want to be with your long-term goals. There’s no magic trick or hidden door here. It’s about getting to work.
Want to wait a year until you’re on better financial ground? I hear that a lot. And most often, one year turns into many years, even five years. After all, you probably were saying that when you were 25 and 30 – and here we are at 35 discussing it.
If you WERE saying it at age 35, the table above shows that waiting five years cost you dearly – to the tune of $2.77 million dollars. The 30-year-old would have $6,285,021 at retirement. You’d have to save a little over $23,000 each year to catch up.
And what if you wait another five years and start when you’re 40? Yikes. You’ll then have only a projected $1.9 million at retirement, or $76,000/year of income in retirement. There’s no time like the present.
Example Two – Age 70
Let’s flip the target market a little bit. Hey all you grandparents out there! Want to help out those grandkids? The question here is if you start passing on inheritance to them now, or later. And I’d suggest now, if you have it. But not just a check in the Easter basket.
There are some 20-year old savers that can manage stashing away $13,000/year. I know them. But likely your grandchild isn’t one of them, or they can’t be one of them. Yet.
So what can you do to help them get there? Certainly the obvious answer is to invest $13,000 in an account for them.
But what if you paid their rent, allowing them to save their own income? Or bought them groceries, guiding them to stash away what they would have paid for groceries? What if you bought them a condo and allowed them to invest the rent they got from roommates in their own investment account? Let’s get creative.
The lesson here may not be so obvious – when a person feels like they invested their OWN money, they take it way more serious than if they feel like “their” investments were gifted to them. Don’t believe me? Just google the average time it takes a recipient of an inheritance to spend down the entire thing. Spoiler alert – less than three years.
After all, big accounts down the road aren’t just about wealth. They are about hopes and dreams. And that’s something to take pretty damn seriously.
Why I Do This
Significant investment portfolios are about leaving the next generations better than we had it. About being able to support the causes and charities that we care most about. About investing in the communities in which we live. About experience and seeing a diversified world to realize that it’s not just about us. Money can sometimes be a curse, no doubt. But with the right grooming and education, it can be used as a force for good. And that gets me pretty excited.
It’s time to get to work. To start building that portfolio, or getting more intentional with the portfolio you’ve already started. I do it for my family, because the benefits of getting this right are significant. And the consequences of getting it wrong are all too real.
Choosing investing tools is a tedious and difficult process – there are hundreds and hundreds of options and even investing experts get a little overwhelmed in figuring out the best options. I’ve done a lot of hard work for you in this regard. And Motif Investing isn’t just a cool new trendy company that feels good. It is an evolution of investment platforms – with today’s technology it is just what an investment platform should be. And I’m sure it will help my family reach our goals better than other investment platforms.
Motif doesn’t pay me to be a big fan of theirs. They do provide me a month’s worth of premium services ($19.95 value) for each new account I refer to Motif. I guess that’s something. But there are investment platforms that would pay me upwards of $500 to bring them a new account. That’s not Motif.
It’s important to understand motivations. And believe me, $19.95 of services isn’t worth a recommendation if I didn’t believe it is a best of breed investment platform. I’m in good company. Fast Company, Forbes and CNBC have all issued awards to Motif Investing for being innovative and effective at providing a robust platform on which investors can invest.
Ready to get started? Open an account here.
Don’t let the amount of money you want to save be the barrier to saving your money. Do what you’re comfortable with to start. Believe me, before you know it, you’ll be more interested in watching your investment account grow than watching the money move from your checking account to your investment account.
Questions? Hit me up at email@example.com.