INSIDE FINANCE
Youth Must Be Served

By Robert M. Jaffe, MBA, AAMS
October 28, 2005

A young friend of mine, in discussing subject matter for this column suggested that I address the needs of persons, like him, early in their careers, seeking ways to build substantial wealth in order to support or enable a desired lifestyle. He pointed out that his generation, mid-twenties, is bombarded with "retirement talk" but little advice as to "making it" now.

We've lived through the dot com era and watched the peach-fuzz crowd grow rich beyond imagination. We have also witnessed dot coms turn into dot bombs and a fortunate few holding fast to the wealth they accumulated.

The future is sure to hold new opportunities to get rich quick as history has proven…..the industrial revolution and all that it spawned, the gold rush, the automobile and the airplane, motion pictures, radio, television, the computer….all having created billions of dollars for savvy investors. Right place, right time and luck.

OK, Generation-Xers, here are a few salient thoughts you ought to consider. Unless you have the time and expertise to research individual companies or know someone intimately involved in one, it's not likely you're going to hit a home run by betting on a single investment. Then there's the specter of risk. You're young and time's on your side, so you have the option of taking greater risks than, say, the author of this column. That, of course, is not only a matter of age but your psyche.

As an investment advisor and asset management specialist, I am fortunate to deal with individuals of all ages and, to some degree, levels of wealth. My charge is to design a plan that should provide a lifestyle that my clients require knowing their needs and dreams. It's no different for you, except that you can be more resilient to the ups and downs of global markets, political and economic realities. Today's energy crunch will no doubt be solved and replaced by some other upheaval, but long-term, markets will provide the opportunity to build wealth.

Back to the question of my young friend; history, risk tolerance, time horizon, sure…..but how to make it NOW? Invest NOW as you are able. Be broadly diversified so that you're protected. Don't own only that with which you're comfortable; youth is on your side. Presuming you're not sitting on a bankroll, mutual funds, in my opinion, are your best bet. They will enable you to own shares in the stocks and bonds of a multitude of corporations, large and small, domestic and foreign, and you can pick the level of risk as well as the asset classes that you sense make sense for you.

Ask yourself what you're looking to accomplish in what time frame and how much can you afford to invest for your "NOW" goals. Make a plan and follow it. Oh yes, about that retirement talk. It may be a long way away but take advantage of the opportunities available to you, an IRA, a 401(k) or 403(b) and start investing as much as you are able there as well. Making it NOW will provide for NOW, but THEN will be sooner than you may think. Let me tell you…it goes faster every day!

Please Email bob@cfsias.com with your questions.

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INSIDE FINANCE will appear regularly, addressing financial matters of interest to our readers. Any questions? Email bob@cfsias.com

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member NASD/SIPC. Cambridge and CFS are not affiliated.

The preceding article is for informational purposes only and should not be used as the primary basis for an investment decision. Indices mentioned are unmanaged and cannot be invested into directly. Past performance does not guarantee future results. All examples given are hypothetical and do not reflect actual investments. The views expressed in this article are those of the author and are not necessarily those of Cambridge. Bob Jaffe is Managing Director of CFS Investment Advisory Services, LLC in Totowa and has been a Clifton resident since 1984. Active in community affairs, Bob is Past Board Chairman of the North Jersey Regional Chamber of Commerce and a member of its foundation board. He serves as a commissioner on the Clifton Rent Leveling Board and the Committee for Individuals with Disabilities. He is Vice President of the Clifton Rotary Club. Representatives of Cambridge do not offer tax or legal advice. Consult a professional for your personal situation.