Your Survival Guy

Preparing your investments and family for when disaster strikes.

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“Good Golly Miss Molly!” You Own a Bank?

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Coronavirus Infects Stock Market: Part XLIV

When you visit me in Newport, R.I. you’ll need your GPS. Our office is at 98 William Street, but you’ll never find a number on our building. We like it that way. The privacy.

The building? It’s beautiful. It’s brick with ivy climbing up the side, manicured trees in front, protected by a black wrought iron fence. Welcoming? Perhaps, that is, if you can get beyond the startling “No Parking” sign.

Once inside the gates, you’ll see a solid wood door protecting the foyer, with an American flag, and a security phone setting the tone. Once you dial-in, someone will greet you at the door, make visual contact and, voilà, let you in. Simple.

You’ll immediately see pictures of Chuck Berry and Little Richard playing the Newport Jazz Festival.

Walking back to my office, you’ll notice a big, working, bank vault to your right. Welcome to what used to be known as the Old Stone Bank.

It’s good to work in a bank.

Back when Becky and I first started dating, close to twenty-five years ago, her Jeep was full of three ring binders. They weren’t school books, they were books (and books) of paint colors, tiles, and carpet samples. I asked her why she had all of these books and she said she was in the middle of a renovation. Her dad bought a bank (the Old Stone Bank building).

When Becky and I closed on the home we’re living in now, we met the mortgage broker at 98 William, the old, Old Stone Bank building after the renovation, in Becky’s office. I’ll never forget what the broker said to me: “E.J. the bank would love to have another home on Rhode Island Ave.”

Now he wasn’t implying that we would default on our loan and be foreclosed upon. He was just being smug, letting me know who was in charge, saying to himself: Hey kid, you don’t own this home. We do.

You can see that one stayed with me.

When you think about your retirement life, I want you to think about that phrase. Do you own your home, or does the bank own it? Because it’s times like these when things can get uglier. All of a sudden, you’re forced to deal with a smug banker with his own problems to worry about.

Still not convinced to retire your mortgage? Consider what the bank makes off of you in interest alone each year. Now consider how much you’d need to invest in CDs to make the same amount in dollars. Trust me banks aren’t suffering.

One more thing. If you’re thinking about retiring in the next few years perhaps you shelve that idea. If you’re retired, perhaps you consider working part-time, when things settle down.

When you consider how much you need to invest in CDs to make your equivalent current salary, or a part-time job, the math is so compelling that the thought of you being your own bank makes you want to just get up and sing.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com