The results are in...
The results are in… --long term investors continue to hold their ground.
Most of you plan on paying debts as your number one New Years Financial resolution. How are you doing so far?
I was glad to see only one of you planned on burying your money in a coffee can in the yard...
And so far, the great majority of our clients have resisted the urge to sell everything and go to all cash, which brings a similar outcome to the coffee can approach. –It’s nearly impossible to beat inflation long term with this approach. CDs are paying less than 2% currently and inflation has averaged around 3.1% long term; and we haven’t even mentioned taxes. That means with compounding, your nest egg actually looses significant purchasing power over time. And it’s almost as difficult to beat the overall market by trying to time it long term. Fortunately, most you (60%) are opting to reassess your retirement investments and reallocating to position yourselves to take advantage of a market recovery over the next several years.
You are also spending less, to allow a higher level of retirement savings. 30% of you even plan on riding a bike to work. My friend Doug, the bike commuting attorney will be pleased. I must say however, to the person out there that plans on biking from Pataskala to downtown Columbus, I only hope that by bike, you mean a motorcycle. That would be a long haul, even for the most seasoned cyclist!
Several of you made the distinction between saving & budget goals and investment return goals. This is an excellent point, as I think it is safe to say few if any met their investment return goals. If we throw out the investment return goals, about half of you did meet your savings and budget goals. Not bad, but we can do better. Only 40% stated they have their goals written down. Now, you know we’ll ask how you did again at the end of the year, so I encourage the other 60% of you to go ahead and commit them to writing and keep them close, so you can check your progress. If you need help putting them in writing, call me.
We did get some great responses for cost savings ideas, but one astute male replied “Stay married, the divorce would break the bank, and hookers charge too much.” Unfortunately, a good friend of mine found this out first hand this past year, (the divorce part, not the hookers) and even though it was fairly amicable, his retirement suffered even more from the divorce than it did from the stock market declines the past year. [To the winner: your gift certificate is on the way. Take your wife to dinner…]
To summarize:
1. Use a budget to keep spending under control
2. Saving even small amounts when you can will add up
3. If you haven’t done so already, now is a good time to assess and reallocate
4. Write it down
5. Making your spouse happy will significantly enhance your retirement.
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Most of you plan on paying debts as your number one New Years Financial resolution. How are you doing so far?
I was glad to see only one of you planned on burying your money in a coffee can in the yard...
And so far, the great majority of our clients have resisted the urge to sell everything and go to all cash, which brings a similar outcome to the coffee can approach. –It’s nearly impossible to beat inflation long term with this approach. CDs are paying less than 2% currently and inflation has averaged around 3.1% long term; and we haven’t even mentioned taxes. That means with compounding, your nest egg actually looses significant purchasing power over time. And it’s almost as difficult to beat the overall market by trying to time it long term. Fortunately, most you (60%) are opting to reassess your retirement investments and reallocating to position yourselves to take advantage of a market recovery over the next several years.
You are also spending less, to allow a higher level of retirement savings. 30% of you even plan on riding a bike to work. My friend Doug, the bike commuting attorney will be pleased. I must say however, to the person out there that plans on biking from Pataskala to downtown Columbus, I only hope that by bike, you mean a motorcycle. That would be a long haul, even for the most seasoned cyclist!
Several of you made the distinction between saving & budget goals and investment return goals. This is an excellent point, as I think it is safe to say few if any met their investment return goals. If we throw out the investment return goals, about half of you did meet your savings and budget goals. Not bad, but we can do better. Only 40% stated they have their goals written down. Now, you know we’ll ask how you did again at the end of the year, so I encourage the other 60% of you to go ahead and commit them to writing and keep them close, so you can check your progress. If you need help putting them in writing, call me.
We did get some great responses for cost savings ideas, but one astute male replied “Stay married, the divorce would break the bank, and hookers charge too much.” Unfortunately, a good friend of mine found this out first hand this past year, (the divorce part, not the hookers) and even though it was fairly amicable, his retirement suffered even more from the divorce than it did from the stock market declines the past year. [To the winner: your gift certificate is on the way. Take your wife to dinner…]
To summarize:
1. Use a budget to keep spending under control
2. Saving even small amounts when you can will add up
3. If you haven’t done so already, now is a good time to assess and reallocate
4. Write it down
5. Making your spouse happy will significantly enhance your retirement.
Return to News Home