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Introduction

The way my dad remembers, it was a cold morning, even by the Saskatchewan standards of his youth. The 12th of January, 1978. Minus 33 degrees. “So cold I could barely get the car to start,” he tells me. A little smile spreads across his face, as it often does when he re-calls a particularly strong memory.

I shuffle through my own memories of Prairie mornings: little things—being bundled up in a thick winter coat, furiously scraping the windshield, trying not to inhale the frigid air too deeply. But it’s been three decades since I’ve seen a full Prairie winter, and my memories of those days are all fuzzy and romantic, much like the broad strokes used by those Impressionist painters.

On that particular morning my father, Rankin Hodgins, was standing in the driveway, stamping his feet to warm them as he scraped the windshield and coaxed his car to life. He had kissed my mother, Daphne, for good luck as he headed out the door.

“Yes sir, it was a miserably cold day,” Dad says. “But I had an appointment. And I wasn’t going to be late for that.” Dad parked in front of the local CIBC branch in Claresholm, Alberta, with ten minutes to spare. He left his car running and cranked up the heater as he sat flipping through the pages in the folder he had brought along. One last look over the numbers, just to be sure everything adds up, he told himself.

At 9:00 a.m. sharp, the window sign flipped over. OPEN FOR BUSINESS. Dad cracked the door and got out. A frigid blast of wind hit him as he hustled inside, taking his breath away.

That meeting would change my dad’s life. He went into that bank as a fifty-seven-year-old man nearing retirement. He came out with a loan for $18,000. Nothing particularly special about that, you might think. People borrow money all the time. But isn’t borrowed money supposed to be for a family vacation or a home renovation? This was a loan for investment purposes.

Dad added the loan proceeds to $200,000 of his own money to begin a program of what we in the financial world call leveraged investing. Over the next three decades, this leveraged investing program would create more than $9 million of wealth, far exceeding his wildest expectations.

The way I see it, it’s a good thing Dad kept that appointment.

My dad wasn’t a financial whiz when he started investing. He wasn’t a no-holds-barred risk-taker either. I tell his story to let you know that you don’t have to be a genius or a gambler to be successful in the world of investing. What Dad did have—the most important characteristic any investor can have—was the right outlook.

Dad grew up on a farm in Saskatchewan in the 1930s, during the depths of the Great Depression. He watched his parents struggle to put food on the table, but never once did he hear them complain. The way Dad sees it, his folks knew enough about farming to know there are some things in life you can’t control, no matter how hard you try. The only thing you can  control is how you respond.

Farmers face many variables that determine the bounty of the harvest. Will the warm spring rains arrive in time to nurture the first soft shoots? Will August bring the long hot days that mature a crop, turning swaths of summer green into fields of autumn gold? Or will an early frost wipe out everything you’ve worked so hard to create?

In the “Dirty Thirties,” Prairie farmers watched helplessly as their fields turned to dustbowls, the shifting winds blowing their fragile soil skyward . . . and, along with it, their hopes and dreams for the future. Dad says that living through those times taught him the most important lesson of his whole life: when times are tough, don’t give up. Be patient. Keep on getting things done . . . and always hope next year will be better. I tend to think the same way.

You may question wisdom like this from a guy who wears a suit and works in an office, but there are a lot of similarities between farming and investing. Just like farmers, good investors realize they can’t control all the variables that determine whether they end up in the red or in the black. You can do your “due  diligence,” but wild market fluctuations can come out of no-where, defying all logic. Companies once deemed solid, steady and well-positioned can be hammered by unrelated events half a world away. Instead of giving in to panic and fear, skilled investors have learned that the best way to respond to market  turmoil is to stay calm and collected—and stick to their original  investment principles.

Dad has been through a lot over the years. In 1978, when he started investing, a 6% interest rate was pretty standard. But four years later, rates had skyrocketed to 22%. How many of us could handle that? In 1987, Dad lost 20% of his gross portfolio over-night when the market crashed. In 2001, Dad lost $750,000 during the turmoil that followed the terrorist attacks of September 11. And in 2008 and early 2009, he lost more than $6 million during the banking meltdown and subsequent global economic cri-sis. Dad has been tested by every type of market condition that exists in the investment world.

What got him through the tough times wasn’t necessarily his financial aptitude. It was his investment attitude. Each time he faced a market in free fall, he drew on those life skills he’d learned as a young boy on the family farm during the Great Depression: patience, persistence and discipline. And you know what? This outlook has worked for him, each and every time.

I believe a lot of people can benefit from hearing my dad’s story. Regular people. People who don’t have a financial or in-vesting background. People with average incomes who might not read the Financial Post or the Globe and Mail, who might be frightened by the thought of putting their hard-earned money at risk—money they’ve carefully saved over the years.

If this sounds like you, then you’ll want to read on. After all, when it comes right down to it, my father is just like thou-sands of other people right across this country. He believes in the value of hard work and in getting value for a dollar. At the age of ninety-one, he still gets up every day at 6:00 a.m. and spends his day reading and keeping active. The things that motivate him— becoming better at whatever he does, making sure he always has enough for a rainy day, showing concern for his family and his friends—are probably the same things that motivate you.

Of course, any financial book written by a son about his father will do more than just crunch the numbers. You’ll find plenty of other investment books out there already, filled with cheerful charts and graphs illustrating the power of percentages and compound interest. This isn’t a book about abstract financial concepts or a spreadsheet analysis of the market behaviour of a successful investor. This is a story written by a son about his father: a modest, dignified and determined man, a real Canadian Prairie boy who made real decisions that had real outcomes, both positive and negative, for both himself and his family.

Watching my dad manage his portfolio over the decades has taught me a lot about risks and rewards. The relationship  between these two basic concepts is something every investor—whether seasoned or just starting out—should know about and under-stand. But most importantly, I’ve learned invaluable investment lessons from my dad—lessons I’ve used to help my clients achieve their retirement dreams. Whether or not you share his investment philosophy, I think you’ll want to know how he’s achieved his success. Hopefully you’ll pick up a few ideas that are useful for you.

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Thanks for your continued support.

To your success,

Douglas R. Hodgins

P.S. Curious about the book? Click here to read more about Millionaire Down the Road: Secrets of the Ultimate Tax Efficient Investor

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Showing 2 comments
  • wg.muirhead@shaw.ca
    Reply

    Hey Doug,
    Really enjoyed the intro. Never had the pleasure of meeting your dad, but it’s obvious you have a deep respect for him on several levels. Looking fwd. to reading the book and hooking up with you in the future. Cheers!

  • Ramon Melhado
    Reply

    I find the introduction very interesting. It is well written.The ideas and facts are also well organized. In fact, it is entertaining…and I would like to read more.

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