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Basically, we're all fucked and I don't understand how anyone retires.

by phillmv 13y ago

microcolonel 13y ago
Things aren't that hopeless. The point is that you invest in something which has greater growth and dividends, as well as something secure. Right now I'm very young, so I just put a certain amount away into Canadian bank stocks and other stocks with a history of ever-improving dividends. I think there's one particular guy somewhere here in Canada which retired at 30-something on a fairly plain job by investing in solid stocks for the long term.
mathattack 13y ago
I think the real lesson is we don't know how long or how much we'll need to save. We do know that we'll live longer than the people for whom the original pension systems were defined. We also know that returns may not be as good as they have been in the past. What can we do? 1 - Invest reasonable amounts in aggressive enough well diversified tax friendly financial assets with low fees. (Low fee index funds in 401Ks, and 529s for folks with kids) 1.5 - Delink your financial investments from your human capital. If your salary (& options) are very tied to the success of silicon valley, don't invest in the NASDAQ. If you are working for a mining company, avoid commodities funds because you don't want your investments to lose value the same time you lose your job. 2 - Avoid high cost debt. (Credit cards, unsecured bank loans, etc) 3 - Invest time (and if needed, money too) in your professional education continuously. Assume your skills (and salary) will degrade on a trendline of 5-10% each year that you don't invest. 4 - Plan on working a long time. (75? Note - this isn't as hard as previous generations, because less of the work is manual) 5 - Invest in your health, since you'll be working and living longer. 6 - Invest your time in a happy and healthy home life. This sets you up for a pleasant surprise of retiring at 55 if the situation allows, or 75 if it doesn't.

Basically, we're all fucked and I don't understand how anyone retires.

by phillmv 13y ago

Basically, we're all fucked and I don't understand how anyone retires.

Things aren't that hopeless. The point is that you invest in something which has greater growth and dividends, as well as something secure. Right now I'm very young, so I just put a certain amount away into Canadian bank stocks and other stocks with a history of ever-improving dividends. I think there's one particular guy somewhere here in Canada which retired at 30-something on a fairly plain job by investing in solid stocks for the long term.

mathattack 13y ago

I think the real lesson is we don't know how long or how much we'll need to save. We do know that we'll live longer than the people for whom the original pension systems were defined. We also know that returns may not be as good as they have been in the past. What can we do? 1 - Invest reasonable amounts in aggressive enough well diversified tax friendly financial assets with low fees. (Low fee index funds in 401Ks, and 529s for folks with kids) 1.5 - Delink your financial investments from your human capital. If your salary (& options) are very tied to the success of silicon valley, don't invest in the NASDAQ. If you are working for a mining company, avoid commodities funds because you don't want your investments to lose value the same time you lose your job. 2 - Avoid high cost debt. (Credit cards, unsecured bank loans, etc) 3 - Invest time (and if needed, money too) in your professional education continuously. Assume your skills (and salary) will degrade on a trendline of 5-10% each year that you don't invest. 4 - Plan on working a long time. (75? Note - this isn't as hard as previous generations, because less of the work is manual) 5 - Invest in your health, since you'll be working and living longer. 6 - Invest your time in a happy and healthy home life. This sets you up for a pleasant surprise of retiring at 55 if the situation allows, or 75 if it doesn't.