I was recently in London. Whenever I, or any American, travels to Europe, it's easy to marvel at just how old everything is. The Tower of London is more than 900 years old, and the British Royal Family traces its lineage back over 1,200 years. Tower of London - Wikipedia The Lineage Of The British Royal Family
In America, we have relatively few ancient structures beyond those built by Native Americans, and our nation's history spans less than 250 years. Compared to many civilizations, we're still the new kid on the block. (Some might argue we're currently experiencing the growing pains that often accompany youth.)
The United States is not the first democracy in history, but it’s widely regarded as the world's oldest continuous modern constitutional democracy. And for such a young nation, we've accomplished an extraordinary amount. We've landed astronauts on the moon. Built the world's largest economy. Developed life-saving medicines. Created the internet, GPS, and countless technologies that have transformed everyday life. Our universities continue to attract many of the brightest minds from around the globe. American entrepreneurs have founded companies that connect billions of people, decode the human genome, revolutionize artificial intelligence, and explore space once again.
None of this happened because our path was smooth. Quite the opposite. Over the past 250 years, we've fought wars, endured depressions and financial panics, experienced political divisions, weathered pandemics, and overcome countless challenges that, at the time, felt insurmountable. Every generation has wondered whether the country was headed in the wrong direction. Every generation has also found new ways to solve problems, innovate, and move forward. Perhaps that's America's greatest competitive advantage is its remarkable ability to reinvent itself.
As investors, we often say that successful investing requires patience, optimism, and faith in human ingenuity. In many ways, those same qualities have defined America since 1776. This weekend marks our nation's 250th birthday. It isn't simply an opportunity to celebrate our history; it's an opportunity to think about what comes next. The next generation of entrepreneurs. The next medical breakthrough. The next transformative technology. The next great American company that hasn't even been founded yet.
The future will undoubtedly bring new challenges, just as the past always has. But history suggests something worth remembering: betting against American innovation has rarely been a winning strategy. There's still a great deal to look forward to.
The Builders of America: It's easy to think of the Founding Fathers simply as politicians. In reality, many were entrepreneurs, investors, inventors, scientists, and business leaders whose ideas shaped not only our government, but also our economy.
Benjamin Franklin was far more than a statesman. He was a printer, inventor, scientist, entrepreneur, and prolific investor in new businesses. He helped establish the nation's first subscription library, volunteer fire department, and insurance company, while his inventions, including bifocals and the lightning rod, changed everyday life. Benjamin Franklin | Constitution Center
Additionally, Ben could also be called the Founding Father of Compounding. In his will, he left £1,000 each to his hometown of Boston and his adopted home of Philadelphia. He directed that the money be invested and allowed to compound for 200 years before being fully distributed. By 1990, the two trusts had grown into the millions of dollars, funding scholarships, trade schools, and civic improvements. He truly understood the value of time and compounding! Benjamin Franklin's Donor Story | The Franklin Institute
Alexander Hamilton is often called the architect of America's financial system. As the nation's first Secretary of the Treasury, he established the First Bank of the United States, championed a national debt backed by the federal government, and laid the foundation for the country's capital markets, institutions that continue to underpin American economic growth today. U.S. Department of the Treasury – Alexander Hamilton
George Washington was not only a military leader and our first president, but also an innovative farmer, landowner, and businessman. At Mount Vernon, he experimented with crop rotation, commercial agriculture, and operated one of the largest whiskey distilleries in early America. The Unexplored Life of George Washington, Entrepreneur
Robert Morris is less well known today, yet he was indispensable to the Revolution. Often called the "Financier of the Revolution," he used his own credit and financial expertise to keep the Continental Army supplied when Congress had little money left. Without his efforts, the outcome of the Revolutionary War may have been very different. American Battlefield Trust – Robert Morris: Financier of the Revolution
John Adams, a successful attorney before entering politics, believed that the rule of law, secure property rights, and stable institutions were essential to both liberty and long-term prosperity. Those principles remain among the reasons the United States continues to enjoy the world's deepest and most trusted capital markets. During the Second Continental Congress, he sat on ninety committees, chairing twenty-five of them! John Adams - Architect of American Government | Mass.gov
Different personalities. Different talents. But they shared the conviction that free people, protected by strong institutions and the rule of law, could build extraordinary things.
Financial Planning/Investment Strategy Corner:
The Freedoms of Wealth: Independence Day naturally causes us to think about freedom. As investors and planners, we also get to see the parallel between political independence and financial independence daily. Wealth is rarely about owning an ever larger portfolio, but is more about what that portfolio can do for the owner, and that often is represented by the ability to have options and choices. So, on this weekend celebrating freedom, let’s focus on some financial freedoms good savers and investors earn:
Freedom of Time: Retire when you choose or work because you enjoy it, not because of necessity. The ability to spend more time with friends and family, especially those who are far away and incur costs to see them. Being able to spend more time on hobbies, travel, learning, or volunteering.
Freedom of Choice: Live where you want or in what type of place you want. The ability to change careers, start a business, or take a sabbatical. Choosing which schools your kids go to, or what type of healthcare or healthy activities you want.
Freedom from Financial Worry: Unexpected home repairs, market downturns, job loss, or unexpected medical expenses, or helping aging parents or children who need help. Not having financial worries in these cases won’t eliminate all your worries about them, but it is one less thing to worry about.
Freedom to Be Patient: Ignoring daily market fluctuations, holding investments during downturns, waiting for attractive opportunities, or negotiating without desperation. This can be a competitive advantage.
Freedom to Say No: To a toxic job, a bad client, unnecessary overtime, to investments that don’t fit your goals, or to keeping up with others. You get the opportunity to walk away.
Freedom to Be Generous: Support family members, friends, and causes that are meaningful to you. Such as scholarships, charities, or investing in your community. Some find this much more rewarding than spending.
Freedom to Take Intelligent Risks: Start a company, write a book, try a hobby, go back to school, invest in a company, accept a meaningful job paying less.
Freedom of Relationships: More family vacations and dinners, caring for elderly parents, and being present for grandchildren.
Freedom to Think Long-Term: Scarcity may force someone to think short-term, such as trying to pay an urgent bill. Wealth allows you to focus on what you want to accomplish in the coming years or decades. Whether that’s long-term financial goals or maximizing your healthy lifespan.
Freedom of Legacy: The ability to ensure that the values, experiences, and resources accumulated can create positive outcomes for future generations.
Maybe the biggest freedom wealth brings is peace of mind, knowing you are OK, your family is OK, and you have a decent amount of control over your future. Temporary setbacks won’t derail your plans or your life, and you can focus on what matters most to you.
One of the ironies of investing and planning is that many successful savers spend decades focusing on accumulating wealth and much less focusing on the freedoms they are accumulating along the way and that await them later. So, when you’re at the 4th of July picnic this weekend, biting into a hot dog, maybe spend a moment or two to celebrate the financial freedoms we are enjoying.
250 Years in 250 Seconds:
- The first U.S. public debt was incurred in 1775 to finance the Revolutionary War. The Colonies borrowed money from France and the Netherlands to fund the war: U.S. Treasury
- President Andrew Jackson was suspicious of banks and paper money. He liquidated the Second Bank of the U.S., which resulted in some profits and a huge government surplus of funds, which paid off all the U.S. debt. 1835 was the first and only time the U.S. government had zero debt! savingsbonds.gov
- The New York Stock Exchange traces its roots (literally) back to May 17, 1792, when 24 brokers signed an agreement under a buttonwood tree. The Buttonwood Agreement established rules, structure, and ultimately, trust, for securities trading: Wikipedia
- The Wall Street Journal was started in 1889. The WSJ looked back at how they covered the 150th and 200th U.S. birthday celebrations: WSJ
- The U.S. has roughly 4.1% of the world’s population, but the U.S. stock market represents 60% of the global stock market value: Census.gov Reuters
- How to stay cool during this very hot weekend: Tempest
- Last-minute Fourth of July party foods: What the Fab
As we gather with family and friends this weekend, it’s worth reflecting on how fortunate we are to participate in a system that has created extraordinary opportunities for generations of Americans. The founders couldn’t have imagined space travel, artificial intelligence, biotechnology, or even modern capital markets. But they did envision innovation, entrepreneurship, and free enterprise to flourish, which it has for 250 years. Regardless of political views or market outlooks, that long-term record of accomplishment is something worth celebrating. Have a wonderful Independence Day weekend, stay safe, and enjoy the weekend. Happy Fourth of July!
Quotes:
“Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America.” Warren Buffett
“Success stories abound throughout America. Since our country’s birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their wildest dreams by creating something new or by improving the customer’s experience with something old.” Warren Buffett CNBC
Thank you for reading RSWA Financial Advisor Insights! We welcome feedback, and please forward this to a friend! Be well, take care, and stay safe!
