Friday the 13th

Bill Parrott |

The Friday the 13th movie series has, so far, produced twelve scary movies. In 1984 it was Friday the 13th: The Final Chapter, followed by Friday the 13th: A New Beginning one year later. The Final Friday movie appeared in 1993, but three more films followed it, so I don't believe Jason will ever die.

The movie franchise has been highly profitable. The budget for the series cost $80.9 million, and the films generated more than $468 million worldwide —a value play.[1]

In honor of this frightening movie series, here are thirteen terrifying thoughts that can derail your financial success.

  1. You don't have a plan. If you don't know where you're going, how will you know when you've arrived? The plots for the Friday the 13th movies are simple, but the directors and actors still followed a script.
  2. You don't have a budget. Do you know how you're spending your money? Do you track your expenses? It's difficult to create wealth if you spend more than you earn. A budget can help you avoid unpleasant surprises.
  3. You're not contributing to your company 401(k) plan. A company retirement plan is an efficient way to create wealth because your contributions are automated. Every pay period allows you to invest in a diversified portfolio of stocks regardless if the market is up, down, or flat.
  4. You're not matching the match. If your company offers to match your contribution up to 3%, you should at least contribute 3% to your retirement plan.
  5. You don't own stocks. Stocks create wealth. Since 1926, they have generated an average annual return of 10% per year. It is startling when stocks fall, but they typically recover quickly. In fact, the three major indices are trading at all-time highs despite decades of volatility and corrections.
  6. You're cash-rich. A significant cash position can be an anchor for the growth of your portfolio. After establishing an emergency fund, invest the remainder of your cash into stocks. The US T-Bill is a proxy for cash, and since 1926 it has averaged 3% per year, but so has inflation, so your net return is zero.
  7. You're an active trader. Trading aggressively is a fast way to get killed in the market. In addition to rapidly moving from one stock to another, you might incur significant fees or taxes.
  8. You try to time the market. Somebody, somewhere, is saying the market will crash. I started my career in 1989, and a senior broker at a prestigious investment firm told me to buy silver because stocks would crash. The Dow Jones was 2,500 at the time, and it has since soared 1,333%, while silver increased 387%.[2] Trying to time the market is pointless.
  9. You procrastinate. The best time to start investing was yesterday, and the second-best time is today. Don't wait! For example, if you start investing $500 per month at age twenty-five, it may be worth $3.16 million at age sixty-five. If you waited ten years, it would be worth $1.13 million, a difference of $2 million!
  10. You worry about politics. Since 1789, the stock market has returned 9.1% per year. When a Democrat controls the White House, the market has returned 8.8% per year. When a Republican occupies the White House, the return has been 8.6% - a difference of 0.20%.[3]
  11. You take advice from talking heads.  Commentators and financial experts do an excellent job of reporting the news, analyzing stocks, updating economic conditions, but they're not talking to you directly. They aren't familiar with your financial situation, nor do they know your hopes, dreams, or fears. Do your homework before reacting to a news story.
  12. You try to keep up with the Joneses. If you try to spend like your neighbors, you could end up in a poor house. Your neighbor will not support you in retirement, so don't worry about the size of his boat.
  13. You die with millions of dollars in the bank. Of course, no one wants to run out of money, but if you pass away with millions of dollars in your bank account, then you've short-changed yourself and others. If your wealth exceeds your wildest dreams, consider helping others like your church, favorite charity, or loved ones. You can't take your wealth with you, so if you donate it to others while you're alive, you'll have the opportunity to experience the joy of giving.

As I mentioned earlier, stocks are trading at all-time highs. The long-term trend for stocks is up, so don't fear a correction. If you follow your plan, invest often, start early, buy stocks, then good things could happen.

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Happy Friday, the 13th!

"Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. ~ Matthew 6:19-21


August 13, 2021

Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM's custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.

Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren't suitable for every investor.




[2] Ycharts – June 1, 1989 to August 13, 2021

[3] Fidelity Investments Stock Returns and Elections by Jurrien Timmer, Director of Global Macro, Fidelity Management & Research Company. Report accessed, July 24, 2020