Yesterday I invited a client along to spend some time at Marriott’s head office with two of their investment managers. We debated various things around the investments and funds that Marriott manage locally plus together with their Isle of Man partners. All sorts of concepts and funny technical terms got thrown around and spoken about. It was very worthwhile.
But the conversations around value and income, reminded me of one of these newsletters that I sent out years ago – probably around 9 or 10 years ago, or more. Long enough ago to write about it again. Most of you have heard me go on and on about once you’re invested into income bearing funds, stop worrying about the value because value doesn’t determine the income. Many years ago, when spending time alone one day with the late and ex-CEO of Marriott, Simon Pearse, he related a story about his mother and her income.
His mother lived on the dividends from a share portfolio that Simon’s father had accumulated over time back in the day in the 50s and 60s and 70s. One day, when Simon noticed one of her unopened share portfolio statements that had arrived in the post, (for the 20-something year olds, this is when a piece of paper comes in an envelope delivered by a man on a bicycle that someone else had put in a red box somewhere else in the world) he asked his mother if she wanted to know how much her share portfolio was worth.
Her response to him was, “Why do I need to know that? It gives me plenty of dividends every year and I’m not selling anything.”
A simple statement, but one that I’ve always thought says so much about understanding income.