I have been obsessing over my pension and my son’s savings account. Why? Well all the adverts to use the tax allowances before the end of the tax year is one reason, but also because I’ve been lucky in my life to have some huge opportunities to make fortunes. And some opportunities I’ve missed and other’s I’ve taken.
A big miss was staying in the US in the mid-90s when working in Congress and investing in Silicon Valley stocks. But I want to use my expertise for my son, because I know when people talk about wealth, it’s two main sources (excluding inheritance and business, the former is out of your hands and the latter results in many failures and chance).
Those sources are property and stocks. In the UK it was largely property investments. My wife would tell me about people in Hounslow and Southall in West London, barely able to speak English who would be wealthier from their investments in property with their minimum wage work at Heathrow airport, than most professionals she knew at Deutsche Bank. High income poverty is a real thing in London; as people earn more, they spend more.
In America, the story of shares would often be the reason for ridiculous wealth. I am no property guru but I am a world authority on investing (don’t mean to brag, but international bestsellers and TV programmes and Oxford fellowships don’t go to clueless people).
So I want to use this for my son. And this is what I did for his first birthday. Firstly, I used a tax efficient savings account. In the UK that is an ISA and a SIPP (there are junior versions of both).
I then, using my know-how researched using online tools and software I’ve created companies which have performed well over good and bad economic cycles and weighing more heavily performance over the past few years. I wanted companies preferably paying a dividend, as they would always have shareholders who would prop up the demand for those shares and so the share price for that reason alone. And I wanted the value of the companies, despite good performance to remain cheap compared to other counties.
To me this means, when I am buying a share, I am buying future income streams and so I wanted to pay as little as possible for that. And the best measure of future income, is profits. So I want to pay no more than 20 times for each $ of profit.
The names I came down on, to add to my previous holdings in Google, Facebook, Amazon, Apple were: AES, Globant, Veeva Systems, HCA, Waters, Autozone, Chegg, Intuit, Cisco, Yum China.
I want my son to have these for 18 more years. So they had to be good. From all my research they are.