The other day, we found out that the child that my wife and I are expecting is going to be a girl. She is our first child so you can imagine the excitement. A little girl. Wow.
When I heard the news, my focus immediately went to learning how to raise a little girl and learning how to provide for a little girl. One of the many aspects of these questions is how to provide financially for her. My little girl is still not even born yet, but being a financial minded person, I am already asking the question: Where should I put my little girl’s money?
My little girl’s money is long term focused. It might help her pay for college or it may even help her pay for retirement. Either way, we’re talking a long term time horizon. Where should such long term money be placed?
The Good News
Fortunately, one of my favorite investors, Jim Rogers, also has a little girl and he is making plans to provide financially for her as well. In a recent speech in Vancouver, Rogers talked about his little girls.
In his speech, Jim Rogers mentioned three things about his girls. First, they are learning Chinese. They are learning Chinese because Rogers believes the next century pretty much belongs to China. Second, his little girls are getting our of the US Dollar. This is because the U.S. government is broke and refuses to change its ways (can you say Freddie/Fannie bailout?). Lastly, his girls are buying commodities. Despite the recent correction in commodities, Rogers is fully convinced that we are in the middle of a long commodities bull market. Since he was one of the few who correctly called the approaching bull market years ago, I think he has earned your ear.
The Point
What is the point of talking about little girls and their money? Well, the point is a little girl has a long term focus. A little girl looks to the future with no record of the past. The reality is that today’s economic environment is different from the past.
Jim Rogers says you should put your money in China and in commodities (still). You should also get your money out of US Dollars because of the fiscal policy in the United States. It’s a shame that our government has a six month view of the economy and they are trashing the currency of the world (for now) while they do it.
It will be very interesting to see if the commodities bounce from the recent correction and take off even higher as Rogers predicts. I’m heavy in natural gas so I’ll profit handsomely if it happens. I’m sticking with Rogers today even though most of the CNBC “experts” will tell you oil is heading south of $100. Nevermind that they predicted $150 oil just weeks before. If I’m wrong, hey, I’ll still have my little girl to look at!
Good luck and happy investing.
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Living off dividends & passive income | 28-Aug-08 at 6:55 pm | Permalink
congrats on the baby girl. must be exciting!
Matt Peer | 28-Aug-08 at 11:24 pm | Permalink
Kev, Congrats on the child. Many blessings to you and your wife. Get those beating sticks ready for those teenage boys
I do have a question for you about these “experts” on CNBC. Who are they? I have been following the very intelligent experts on Kudlow (less Shilling) and most of them had been calling oil to collapse around May, when it was really ratcheting up. Are “they” Goldman Sachs? Or others?
The point is, and I am a rookie at investing, but I have always subscribed to the idea that commodities are extremely volatile, and are to be used as a hedging tool for staving off inflation only.
The American economy is diverse, resilient and flexible. China is fledgling and corrupt, as I have said on this blog before. Are you willing to bet your new daughter’s education fund on it? Rogers runs a blog called “Living off dividends and passive income”. American companies are great at this. Again though, congratulations!
Sean | 28-Aug-08 at 11:53 pm | Permalink
Congrats on on being a soon-to-be dad! Investing in China and commodities is something I strongly support as well. I’m considering trying to learn some Chinese one of these days…
kevin duffey | 29-Aug-08 at 8:06 am | Permalink
Typically, when i say “experts” i’m referring to the collective investment analysts and tv folks whether on cnbc or an online journalism site. My point is they are rarely right and usually just predict the current trend to continue. Right now the trend is lower so people are predicting lower oil prices. In May, just about everyone was predicting a correction because of the parabolic nature of the increase in oil prices.
I like some of the things Kudlow says and I like some of the other people on CNBC as well some of the time.
Living off dividends and passive income is another finance blog that talks about Jim Rogers. Jim Rogers doesn’t run it, he is much bigger than that.
I’m not putting all of my eggs in the China basket, but I think looking forward 10, 20, 30 years, China has to be a part of your investment strategy. Sure, there is corruption and other issues but America had issues also over the last 100 years.
Thanks for the comments!
sbf | 29-Aug-08 at 10:43 am | Permalink
Kevin, congrats on the little girl. How exciting!
China – They might be the future, but not anytime soon. I mean…like not with in the next 50 years soon. So I think.
Kevin, you know I’m a huge O&G guy. I know NatGas and oil will be back up, and in a big way. I am betting most of my retirement on it! Most traders wouldn’t advise it, but most traders only make 5-10% returns. I’m in my 20’s and have some money to invest and this is the best time of my life to go big. When I’m in my 40’s I wont be able to take these kinds of risks. If I’m going to lose money, now needs to be the time b/c I have the rest of my life to work. If you know anything about Warren Buffet, you know he has the same plan-of-attack I do.
I bought XTO, CHK, and GDP about 2 weeks ago. Still holding UPL, SWN, and XOM. On radar – WLL, RRC, CLR, BEXP, KWK, CRZO, ECA, HK.
T. Boone Pickens – Pres. ‘08!!
hank | 02-Sep-08 at 4:13 pm | Permalink
I’ve got 2 daughters (3 and 4 years old) and they’re really going to keep me on my feet in another 10 years I’m sure (as if they’re not now).
As far as where I’m putting their money currently I’ve just got a couple 529 plans for the both of them.