The student threw his hands up in frustration.
"Professor," he said, "I just don't get it." He slumped in his chair totally defeated.
In a last desperate attempt, I asked him to show me his textbook. I wanted to see if he had actually spent any time studying the material. If he had, I would expect to see highlighted sentences and notes jotted down in the margins.
And that's exactly what I saw. But I noticed something else, too. Everywhere the book dealt with some technical formula or idea, he'd write "YBH" in the margin. He had highlighted and underlined the letters in a different color.
I asked him about these. He told me that YBH stood for "yes, but how." Once he told me that, I instantly understood his dilemma. He wasn't confused about the financial concepts. He just didn't see how to apply the knowledge to solve real-world problems. But that was his mistake.
You see, we weren't trying to solve financial problems. Rather, we were identifying them. And identifying problems comes before the solutions. It's an important lesson that applies to investors as much as to students.
The Problem Today
Last week, I wrote an article for StreetAuthority about the future of Social Security. The article explained that the unfunded liabilities of Social Security have grown so large that our children face impossible headwinds to their retirement.
These include significantly higher taxes -- both federal and FICA -- along with reduced benefits and higher retirement ages for Social Security. In short, our kids' retirements will look nothing like our own.
Sadly, our kids didn't do anything to deserve this. They're just the unwitting victims of decades of disastrous fiscal and monetary policies by Washington politicians and bureaucrats.
So if our kids have any real hope of retiring, they must learn to invest on their own -- no easy task considering that 67% of millennials have never bought a single stock. But the alternative is almost unthinkable.
While there are different techniques for retirement planning, one of the best is the buy-and-hold method used by investing icon Warren Buffet.
But we're not just talking about a strategy of buying and holding blue-chip stocks (although that works, too). Rather, millennials should use the technique of buying stocks with tremendous growth potential.
It's a strategy many used to buy Microsoft (Nasdaq: MSFT) in 1986. Three decades later the stock has grown almost 70,000%.
The strategy also worked with Apple (Nasdaq: AAPL), Celgene (Nasdaq: CELG), Biogen (Nasdaq: BIIB) and dozens of other stocks. In each case, these stocks grew by 15,000% to 25,000%. The strategy successfully created millionaires out of ordinary people worried about retirement.
Now, you may think gains like this are impossible today. That's absolutely untrue. We're in the most exciting time in history. Technology will change more in the next 20 years than in all of recorded history.
That's not just hyperbole, either…
The technological advances of the coming decades make the invention of the automobile, airplane, computer -- and even the Internet -- seem as mundane to our grandchildren and great-grandchildren as the invention of the wheel is to us.
Yes, But How?
Several companies have the potential to disrupt their industries in the same way Microsoft and Apple have. Buying stock in these revolutionary companies will help millennials find financial security in their lifetimes.
One such company is Energous (Nasdaq: WATT). The company's first generation devices provide wireless electricity to virtually any battery-powered device in your home. The wireless power can be used on a variety of electronic devices. This includes cell phones, tablets, wearables, cameras, wireless headsets, sensors, LED lights, and remote controls.
Now, if you're anything like me, wireless electricity sounds fundamentally impossible. So let me explain how it works…
A Radio Frequency (RF) system, similar to Wi-Fi, delivers wireless electricity to a distance of approximately 15 feet. The receiving device, like a mobile phone, is then charged without wires. By employing multiple transmitters the system can cover an entire household. And because the system is software-controlled, it's intelligent, customizable, and can work invisibly in the background.
But this is just the beginning…
Second and third generation transmitters will send higher wattages greater distances --fundamentally changing how people use electricity -- most notably for the 1.2 billion people who have never used electricity to light a room or refrigerate food.
As you can see from the chart below, WATT stock is up more than 128% since January 2016.
But don't let that scare you off. WATT is a long-term investment that will take another decade to experience the kind of exponential growth capable of solving millennials' retirement needs.
While we can't promise it's the next Apple, it has a good chance to be. Buy the stock and hold it forever. It will make the chaos of Social Security irrelevant.
Risks To Consider: The first generation transmitters work well over short distances. There are no guarantees that the technology will work over greater distances and at wattages necessary to power cities and remote villages. But the research is promising.
Action To Take: Buy shares of WATT up to $25. Commit no more than 1-2% of your portfolio to Energous. Expect to see periods of high volatility inherent in new technologies. But don't use a stop-loss due to the long-term nature of the investment. The holding period is forever.
Editor's Note: Tech companies have a history of turning stockholders, secretaries and even janitors into "overnight" millionaires. In 2017, innovations in virtual reality will do the same for owners of these 2 stocks...