“There comes a time in everyone’s life when
they realize they have to plan for their
financial future. Those who realize this at
an early age are well set for a life of
stability and financial freedom.”
* Mark W. Miller *
Someone sent me this quote today. I like the first part that basically says the time will come for everyone to realize the need to plan for their financial future, but just because you start early, it doesn’t mean you will be set for financial stability or financial freedom. Why? There are plenty of examples to show. Let’s forget about rock stars, actors and professional sportsmen that earned big bucks and then lose it all. They might not be the best educated about their finances, and sometimes have bad advisors around them. Even those in business have their share of bad luck.
Look at Charles Michael Schwab. Started out as a stake driver for Andrew Carnegie’s steelworks and eventually ran the second largest steel company. Together with JP Morgan, he arranged one of the biggest business deal ever at that time. A company worth US 1 billion in the early 1900s. A multimillionaire industrialist, Charles Schwab died a bankrupt. His high living and the stock market crash of 1929 eventually wipe him out his fortune. At his death, he was over US$ 300,000 in debt. But had he lived a few more years, his fortune might have been restored. A case of bad timing?
On the other hand, financier JP Morgan did well. Starting of as an accountant, along the way he build his personal wealth. Along the way, he acquired and/or financed many interest including shipping interests, coal mines, insurance, and communications industries. JP Morgan even provided financial backing for the U.S. government itself! Imagine backing an 1895 government bond issue of $62 million dollars, and in 1901 he secured a $50 million dollar American issue for the British war loan. He remain America’s foremost financier throughout his life. Today, his name is recognized as one of the top and most powerful financial institutions around the world.
Perhaps the quote have some truth in it.
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