Few people start thinking about saving for retirement when they’re just starting out in the workforce. But that might be the best place to begin. The earlier in life you start saving and investing, the better prepared you’ll be.
Retirement planning isn’t just about tucking money away for your golden years. It’s about replacing your main source of income once you retire, with another source of income.
Right now, almost 60% of middle-class retirees expect to run out of money if they maintain their pre-retirement lifestyle and don’t cut spending by at least 24%. The majority of Baby Boomers view retirement as a crisis—but only a small minority know how much money they’ll need for retirement.
A long-term approach to retirement investing produces income, wealth creation, and capital growth. As it stands, retirement savings comes from three different sources: social security; pension; and investments.
And some Americans will need to find investments with strong returns and wealth creation. A large number of Americans can look forward to spending 20 years, or more than 25% of their life, in retirement. At the same time, almost half of the population lives longer than the average life expectancy; and will need to have retirement savings that last a lot longer.
For nearly 100 years, U.S. inflation has increased approximately 3.21% a year. At that rate, prices double every 22 years. If you enter the workforce at age 20, you are likely to see prices double twice by the time you reach 65. As a result of compounding, that means an item you bought at 20 will be four times as expensive by the time you retire.
If you live longer than the average American, chances are you could see prices double again during your golden years. That’s why it’s important to remember that investing does not stop at retirement.
A lot of people do not have pensions to look forward to and, at just $1,200 a month, social security isn’t much to live on. That’s why a sound, diversified, investment strategy that encompasses stocks, bonds, mutual funds, real estate, etc., is essential for ensuring you are more than prepared for retirement.
No matter what your tolerance for risk is or your financial acumen, there is a wealth creation strategy out there to meet your needs.
Technology and growth stocks may not be looking that good at this time, but the same cannot be said for the oil sector, which is an investment opportunity.
We are seeing significant profits emerge in the oil patch, as the price of West Texas Intermediate (WTI) is holding above $100.00 per barrel.
The presence of the higher oil prices is driving energy companies, from the drillers to producers, both upstream and downstream, to report strong results.
Godzilla (2014) is running wild at the box office, as this classic B-movie remake has delivered a record opening weekend for specialized movie theater operator IMAX Corporation (NYSE/IMAX). If you have ever had the IMAX experience, you likely agree that Godzilla was probably as life-like as possible through the big-screen format of an IMAX theater, surrounded by about 12,000 watts of mind-blowing sound via a network of more than 40 speakers. The screening of major Hollywood blockbusters on IMAX screens has been a big winner for the company and an excellent Read More
The flow of capital into the stock market continues to be directed toward lower-beta large-cap stocks and blue chips, and far less into growth and technology stocks. The comparative performance of the large-cap versus smaller-cap stocks also exhibits a movement of capital into bigger companies as the stock market adopts a more defensive structure. The risk in growth stocks is continuing to grip the overall stock market. With the move to safety, we are also seeing some capital flow into the bond market as the yield on the 10-year bond approaches the critical three-percent threshold. The higher the yield, ... Read More
The retail sector can return some amazing gains as we have witnessed since the recession ended—but it can also provide periods of anxiety. How the retail sector performs is dependent on many variables, including the economy, jobs, housing, consumer confidence, interest rates, and even the weather, as we witnessed this winter. There is no tried-and-tested rule on what areas of the retail sector do well. For instance, if you think discount and big-box stores always fare the best, while high-end luxury-brand stocks underperform during times of economic uncertainty, then you are ... Read More
With a long-term portfolio, the goal is to earn a constant rate of return over a long period. Sadly, even with this in mind, investors end up making decisions that jeopardize their long-term objectives. They make mistakes, but luckily, the effects of these mistakes can be easily controlled, saving their portfolio from disaster—it all comes down to these three principles of smart long-term investing that every investor needs to know when building their long-term portfolio. When There’s Rising Optimism, Go into Protective Mode Too ... Read More
There’s a significant amount of pessimism towards the Chinese economy these days, and the reasons behind this are very understandable. The economic data suggests the country is headed toward an economic slowdown. In 2013, China’s gross domestic product (GDP) grew by 7.7%—barely better than the previous year and the estimates that were calling for the lowest growth rate since 1999. (Source: Yao, K. and Wang, A., “China’s 2013 economic growth dodges 14-year low but further slowing seen,” Reuters, January 20, 2014.) Keep in mind that despite beating the estimates, this GDP growth rate is much lowe ... Read More