When I was a kid, we took a lot of trips to Disney World, and when we were there, we stayed at Fort Wilderness. One day, a day off from the parks, my dad and I rented a canoe. Floating near the shore, we noticed these little animals digging in the dirt with what looked like a shell as hard as armor. “Those are armadillos,” my dad said. “They’re harmless.”
They didn’t look harmless to me, and I was sure I didn’t need to see them up close, but he thought we should. As we got closer, I said, “Dad, that’s close enough.”
“OK,” he said, “I’ll turn us around.”
Easier said than done, as navigating a canoe isn’t like turning and walking the other way.
Instead of turning, we kept moving forward. I repeated, “Dad, I don’t like them.” I didn’t want to get any closer, but we beached. I panicked, ran to the stern like a cartoon character trying to get away and walk on water, and my dad wondered what had gotten into me. I don’t know, I was scared.
My family reminds me of that story more than I care to admit.
Years later, you can imagine my surprise when I saw the title of my father-in-law’s book: Richard C. Young’s Financial Armadillo Strategy: “A tried and tested system for investing that lets you pursue profits while enjoying extraordinary safety of your principal.”
Through the years, my mom has gifted one share of Disney to my children and my sister’s children for their birthdays. A gift that has added up as my kids are in their twenties. She’s shown them through action what it looks like to have a system for investing.
But prices can be brutal as my kids are learning. Even though they’ll get more bang for their buck, Mr. Market can be tough. Prices can stay down for a long time. But if you focus on the income, you might just have something to show for it, as reinvested dividends buy more shares when prices are down.
Which leads me to my 6th investing habit of the fairly wealthy. They protect what they make, like an armadillo’s shell protects it. And rather than live or die on prices, they enjoy a peaceful existence, rooting around in the sun all day.
A life I’ve learned to appreciate after all these years.
Action Line: When you’re ready to talk about the armadillo strategy and what it means for your future, I’m here.
Read about all of the Top 10 Investing Habits of the Fairly Wealthy here.
E.J. Smith - Your Survival Guy
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