The best investments take a long time to pay off. Investing is not an immediate gratification game. It’s a long-term, slow and steady (and sometimes painfully agonizing). The best investments that I ever made took a long time to pay off. Take emotions out of investing. The markets and investing do not care about your emotions, only you do. When we mix the two it almost always leads to poor decisions.
As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Andrew Rosen.
Andrew Rosen, CFP, CEP is the President and Partner at Diversified Lifelong Advisors, a financial planning and investment advisory firm serving executives, professionals and retirees in Delaware and Pennsylvania. To learn more, please visit www.lifelongadvisors.com. Follow Andrew on Twitter at @rosen318.
Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
I always had an interest in business and finance. In high school, I took business classes as electives, and when I entered college at the University of Delaware, I knew that I wanted to major in finance. My original plan was to one day be able to take over my father’s business. Unfortunately, during my Freshman year of college, my dad got sick with cancer, and the company folded when he had to go on permanent disability.
Upon graduating from college, I had a choice to make when it came to my future. What had been impactful to me was there had been good financial planning done in my family. This allowed me and my brothers to go to college. We were able to make sure my mom was going to be okay when my father got sick. Seeing how a good, comprehensive financial planner really helped my family, it made me realize financial planning was what I wanted to do. I wanted to be able to give back to others.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
My first job working in the financial sector was at an insurance company. I had one of my first training appointments with my mentor who instructed me to meet him at an address I was given. I kept driving back and forth on the street but couldn’t find it. Keep in mind, this was in the days of MapQuest, so I kept driving back and forth past a trailer park community. Finally, I realized that the location was actually in that community.
When I got to the address, I knocked on the door and heard “one minute please.” Ten minutes later, a man opened the door. I asked him about his existing insurance policies, and if there were any others that I could help. The man’s response was, “just ask my wife.” This was a one room trailer and there was no woman in sight, so I told the man I would call back later when she was home. He said she was home, but bed ridden and led me to the bedroom. She bonded with me for 15 minutes, and when I asked her for others in her family I could help, she named aunts, uncles, nieces, nephews, and every person she could think of.
I learned two lessons from that experience. The first being that, despite my comfort level, I always wanted to overcome obstacles. The second, I always had a yearning for helping others and those that they care about, no matter their socio-economic status. Where others would have walked away, I really give my all in trying to help.
Are you working on any exciting new projects now? How do you think that will help people?
I’ve recently started an exciting new project where I promote my mission of wealth, health, and happiness. I have started a vlog series where I interview experts on topics that will benefit my clients. I’m really energized about this project. It has come to my realization that a lot of people can do financial planning, but I really want people to achieve more than their goals. Through finances and our other resources, I want to provide people with a happier quality of life. We find that when people are wealthy, healthy, and we can help optimize their happiness, then we’ve done a fulfilling job for them. Through my new vlog series, I’m really excited to keep driving that movement.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
There are two important people that helped get me where I am. I am grateful for my mother and my father, for different reasons.
Ever since I was young, my dad taught me the importance of work ethic. I saw how he handled his employees and really put in the hard work. I always turned to him for business and career advice ever since I was a kid. The story that sticks out to me most was during the economic crisis of 2009, when financial planning was the worst business to be in. I was looking to switch jobs because I was unhappy, and I had two options. The first option was a job with my current firm, Diversified Lifelong Advisors, where I am now the President and partner. The other option was a job that paid at least 30–40% more. That was the job I actually thought I wanted. After talking to my dad, he told me to take the job with Diversified because it had ownership and real potential, whereas I just wanted to get paid as much as possible at the time. My dad’s advice was to grow and bet on myself, so I did. I could not be happier with his advice. It has led me to my passion, and I don’t think that it would have happened otherwise.
In my first few years in business, I didn’t make a lot of money and I couldn’t see a long-term future here. My mom had always reminded me that I have what it takes and that my time will come. She really believed in me when I didn’t believe in me, because of that I stuck the course. She was right.
Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?
When thinking about the dramatic jolts of the news cycles, it’s important to remember this is what happens every time there is a crisis. Every black swan event it is just that; something unforeseen, that we never could have imagined happening. We’re in this together, and not just as individuals. This too shall pass; we will get through it and prevail.
I think taking the long view helps. When you focus on tomorrow, and take life day-by-day, it can be hard to see the forest through the trees. When you take the long view and rationalize that you won’t be stuck at home for the next 40 years, you start making smart decisions. I also like to remember that if you were to throw all your problems into a bucket with everyone else’s, you would be quick to dive in after yours. Having that perspective is really helpful; some people have it a lot worse than you do. These are all things that help bring me comfort and peace of mind.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long-term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing 500 dollars every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?
I would tell them to keep doing what they’re doing. I would ask them, has the plan worked this far with investing in this way? The answer would be yes, whether that be 10, 20, or 30 years. Don’t change your plans if they’ve been working. We create plans to take advantage of the good times, and to account for the bad.
Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?
During the height of the pandemic, we generally favored growth sectors like health care and technology. We thought they were more durable given the parameters of what the pandemic was creating. Last month, however, we balanced our growth value blend to add more areas, such as financial materials, given how much they were beaten down since March. There’s an opportunity in those more mature value sectors when markets continue to rebound, economic activity picks up, and the virus is predominately behind us. We like having that balance today as we continue to believe there will be some market rotation away from some of the expensive tech names.
Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?
There tends to be two ways to look at this. The first being looking at some of the down areas in the market for rebound within economic recovery. Areas like travel, hospitality, financials, and energy have been hit pretty hard with lockdowns and slowdown in economic activity. Getting it back to normal can really propel these areas in the future. Another way that we look at it are areas of future growth with technology here to stay. Things like 5G internet and the growth of technology globally are in our sights. We’re trying to think through how to access those ideas. We like sectors like semiconductors and geographic areas like emerging markets, especially in China.
Are there alternative investments that you think more people should look more deeply at?
When looking at alternative investments, private markets offer some intrigue for investors if you have a longer time horizon and you can handle some volatility. Both private real estate and private equity offer some long-term potential growth. Investors need to understand those investments in detail before jumping in.
If a person in their thirties and forties came to you today and said that they have 10,000 dollars that they want to put away today for a long-term investment what would you advise them to do with it?
I would tell them to buy equities. It doesn’t matter what equities, funds, or indexes. Just buy them and don’t look back. Pick your head up in 20, 30, or 40 years and history will tell you that 10,000 dollars should be worth a lot more than it is today. The equity markets are the single greatest and easiest way to grow your wealth.
Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
- Start with the why and invest in yourself. It’s important to start with the why and figure out what brings you joy and happiness. This will help you discover what you want out of life. Once you figure out what your goals are, invest to keep those goals. Investing is not to beat your neighbor or an index, or to buy the hottest trend. Investing is a tool, a resource to make what’s really important (your goals and your happiness) happen. Whether that’s education, buying businesses, or just improving your skillset. The best investment that you can make in life is in yourself.
- Start early. Make it a habit. Once you start working, or even if you’re still in school, create good habits. These habits will be what you fall back on in good times and bad. A good starting foundation will make it a lot easier to continue. Just like a workout regimen, it’s much easier to continue if you’ve always had one, rather than starting one at age 50.
- Investing is both a sprint and a marathon. With the magic of compounding, it’s a sprint. If I had known in advance this year was going to be a 20% appreciation year in the equity markets, I would have tried to get everything I could into the markets. With the power of compounding, if I went and put 100 dollars in the markets this year, that’s a 20 dollars increase. If I was able to put 100,000 dollars in there, then that’s a 20,000 dollars increase. Getting money in the market as fast as possible is the sprint. The marathon is, you have to stay consistent. The magic of compounding is that over the long-term when you keep adding, it makes a massive difference.
- Save first, spend second. You will always spend what you have to spend, that’s just how we work as people. If you teach yourself that you have to save first and then spend what you have left over, you’ll l find a way to budget and work within those means.
- The best investments take a long time to pay off. Investing is not an immediate gratification game. It’s a long-term, slow and steady (and sometimes painfully agonizing). The best investments that I ever made took a long time to pay off. Take emotions out of investing. The markets and investing do not care about your emotions, only you do. When we mix the two it almost always leads to poor decisions.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
When thinking about life lesson quotes that stick out to me and my life, two come to mind.
“People don’t care what you know, until they know that you care.”
There’s no shortcut or faking it. If you’re in the business of working with people and you want to stay in that business, you better care about the people you’re working with. Once people know that you care, they’ll care about you, your service, and what you know.
“Successful people do the things that unsuccessful people are unwilling to do.”
I firmly believe in this. Make the extra call, have the extra meeting, go in a few minutes early each morning. If you’re willing to take the extra step that your competition is not, then you’ll rise to the top.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger.
I would want people to re-prioritize their lives. I want people to focus on truly understanding what makes them happy, and then building their life around that happiness. I think a lot of people build a life that is propped up on things that don’t make them happy, and then they’re just chasing happiness. A lot of people spend all their efforts getting new cars, joining new country clubs, trying to get raises or promotions, rather than focusing on what actually makes them happy. At the end of the day, we have one trip through this Earth, and we should make more of an effort to maximize our happiness.
Thank you for the interview. We wish you only continued success!