Successful investors know successful investing occurs over decades and across generations.

With the height, stability and longevity of a doctor’s income comes the opportunity to plan for the next generation. Most doctors, once they are through the peak cost years connected to raising a family, enjoy a period of relative abundance when they can work at a more comfortable pace, have great tax planning, live well and lay down a significant base for the future. Not just enough for their retirement but enough for their children as well.

This idea goes down well with most doctors. They love their kids and they like the idea they can set them up financially, or at least offer some financial assistance, down the track.

Recent meetings have taken this ideas to new lengths. Many clients are GPs in their late fifties or early sixties, expecting to work on a reducing basis, at a comfortable pace and place for another 15 or so years. They first implemented our strategies over 20 years ago. Sensible and low risk investments in residential property and shares, owned through tax effective and asset protected companies, trusts and SMSFs, with a judicious use of deductible debt as a growth accelerator. The strategy has worked very well.

The Russell ASX 2018 Long Term Investment Report tells us property averaged 10.2% and Australian shares averaged 8.8% since 1997. The 100 year averages are not far behind.

Russell ASX 2018 Long Term Investment Report

These clients are in the top 1% of the population in terms of wealth, enjoying their work, and still adding to their stock of capital every year. They are in a state of abundance. Financially they are fine, with all realistic financial needs covered for life, for them and for their kids too.

It was not that hard to achieve: own a home in a good suburb of Melbourne or Sydney, pay maximum super every year to an industry super fund or a SMSF, negatively gear a property or even a small portfolio of properties, and possibly inherit a bit from their own parents.

It’s not uncommon for these clients to be sitting on between $5,000,000 and $10,000,000 of net assets. You cannot tell by looking at them. They are too smart to flaunt it. They know it’s just money anyway, and they are more focused on doing a good job by their next patient, planning their next holiday, staying healthy and playing with the grandkids again next Wednesday afternoon.

Extrapolate $5,000,000 to $10,000,000 of net assets out for another 15 growth years… the amounts become somewhere between $15,000,000 and $30,000,000 by ultimate retirement at age 75.

That is significant wealth.

If your child is age 25 now, and has their own child at say age 35, in 2029, your grandchild will probably be alive 100 years from now.

Think about it: your grandchild will still be alive in 2119. Think about the changes the world has seen since 1919, just recovering from the tumult of the Great War, and still some twenty years before the outbreak of WW2 in Europe. Then try to imagine what changes the world will see by 2119.

That’s how long you should be investing for. That’s the time frame for your next property acquisition, and your next share purchase. 100 years. Until 2119. The expected lifespan of your yet to be born grandchild.

Curve Investing in the next 100 years generations

Filter out the static. Think clearly, and for the very long term. What should you invest in now for the lifespan of your grandchildren? The answer is well located properties, particularly in Melbourne and Sydney, on their own bit of dirt (ie not most apartments). And well diversified low cost exchange traded funds.

Think about what structure you should use. These assets should not be in personal names, because persons die, and should not be in super because super has to be paid out in your life. Tax efficiency is critical, as is asset protection.

Over 100 years everything bad that can happen will happen. There will be wars, deaths, divorces, depressions, climate changes, and everything under the sun.

Do you love your grandchildren?