Take Five: Jonathan Murray
Part One: Exclusive investment advice from financial guru, Jonathan Murray, including the top five things to look for in a broker. (Click here to read Part One with Jonathan Murray.)
Jonathan Murray and his twin brother, David, may be the most personable, invigorating investment gurus in America, appearing on the “Today” show and MSNBC with their financial advice. And their popular book, “Two for the Money: Financial Success for the Sandwich Generation” (Da Capo Press), is now out in paperback.
When Style asked Baltimorean Jonathan (David lives in Michigan) how to weather these harsh economic times, he offered a meaty answer: “More than ever, it’s important to step back and try to ignore the day-to-day volatility of the market and remember why it is that you’re investing. If you’re not going to touch your money until you’re 60 to 65 years old and you’re still in the accumulation part of your life, then why would you want your money to be anything other than low today? Where you want investments to be high is the day you retire,” he says. “For the older investor, we would recommend more bonds, CDs, municipals— the biggest risk is that their retirement nest egg gets cut in half. So be conservative.”
Murraynever planned to get into the money business— he was the assistant dean of admissions at Dickinson College for several years. In his spare time, he and his brother took their acoustic act to the local pubs (David played the guitar, and Jonathan played the piano and sang lead). We asked Murray if he wore spandex pants during his band days in the ‘80s, to which he replied, “No. I rocked it out in a suit.”
Let’s say you’re talking to someone who’s 50 years old and only has a few bucks a month to invest, and for the most part, they’re not interested in investing. What do you tell them?
I’m going to say, get going now, it’s not too late. We’re all living so much longer now. It’s amazing how much your assets can grow in five years, 10 years, 15 years. The No. 1 thing to do is to get it started now and automate it. Before you even see that paycheck, before you pay your bills, you should have socked away at least 10 percent of that paycheck into your savings and investment account. And if someone comes to me and says, ‘Hey, I work at McDonalds by day, and by night I’m pulling a shift at Chick-fil-A, and I barely have enough money to put food on the table,’ I’m going to say, ‘I’m so sorry for your struggles. I’m so proud of how hard you’re working. Let me ask you one question. Do you think you could survive on 90 percent of what you made last year?’ Very few people will say no. Well, guess what? That’s the exact same thing as saving 10 percent. It’s just a question of perspective and commitment.
What’s one of your most exciting investment discoveries?
I love teaching kids about money. I think financial literacy is a huge thing for kids today— the power of compounding, the evil of credit card debt, etc., teaching them to invest in things they know. I started my boys off early. In fact, they were playing this thing called ‘Guitar Hero.’ I had no clue what it was, but they loved it. So I asked them to tell me about it. Then we researched the company that put it out. Then we bought stock in it, followed it, made a little chart, the thing tripled in value… they just sold half of their stock to buy a surfboard! That was a lesson that taught them the benefit of something they discovered, and a lesson about money. Most of my kids’ investments are in mutual funds. But it’s always nice to get them excited. Find out what they’re wearing, what products they’re using, what food they’re eating, what drinks they’re drinking, what games they’re playing, what sportswear they utilize. In most instances, those products are produced by companies that trade on the stock exchange.
Is it true that many female baby boomers need smart investment advice, fast?
Whenever we can, we try to help women who aren’t comfortable investing. Our book has chapters targeted to these women and the financial trifecta they face— preparing for retirement, taking care of aging parents, and paying for their kids’ education. Many of these women have a separate set of investment issues. Many widows, for example, had their husbands handling the investment. And I can’t tell you the number of divorced women I’ve met that haven’t a clue about their investment portfolios. It’s been really rewarding to take these women in a relatively short amount of time from being totally ignorant about investing, and converting them to stock junkies.
We hear so much today about how buying local is important for our economy. Can the same be said for investing?
We are blessed in Baltimore to have great businesses that make wonderful investments. In fact, if we wanted to, we could even start our own mutual fund and call it the Baltimore Fund. Companies like T.Rowe Price, McCormick, Legg Mason, Procter & Gamble, Black and Decker, Northrop Grumman— all have significant, thriving businesses here. So whether you’re looking for employment or investment opportunity, they’re in our own backyard. The job of investing is to make money, so you don’t want to handcuff yourself. I don’t think that folks should limit their search solely to Baltimore… that would be like going to Eddie’s and only shopping in one aisle. There are so many incredible opportunities around the world. However, to the extent that it helps you get comfortable with investing, local investing has its advantages— going to an annual shareholder meeting, reading the local press to see what’s truly happening to a local company, can be much more satisfying than reading annual reports.
Baltimoreans. They have their own way of doing things. Can the same be said for the way they invest?
Having spent the first part of my professional career in New York City with Kidder, Peabody & Co., I did have a New York perspective prior to coming to Baltimore. And I think that in the old days, Baltimoreans tended to do business with people that they went to elementary school with. When I first moved to Baltimore, I couldn’t believe how, when they asked you where you went to school, they meant high school, not college. As a result, with regard to money, nobody left Baltimore. They just stayed in Baltimore and only did business with people they’d known from the womb. That has changed dramatically. And even though people still love their hometown, and I do— it’s my hometown and I’ll stay here forever— when it comes to serious money management, the trend now is to have the best, most sophisticated advisers, regardless of where they’re located. Financially, Baltimore has become less provincial.