Investing for Retirement
This page contains links to websites that are very useful in formulating an investment plan for retirement. The links are organized by category and are among the best I've run across over the years. Most get right to the point and don't overwhelm you with ads or products they are trying to sell. I have also thrown in a few tips, as well as a worksheet or two. Please note, the content of this page is strictly my opinion, take it for what it's worth. I am not a Financial Planner nor am I a Certified Financial Advisor.
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Tip!
If you don't think you're smart enough to plan for your own retirement, save yourself some money and hire a chimp to do it for you.
Chimpanzees routinely out perform most Wall Street money managers by throwing darts at a list of stocks.
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Investing . . .
Investing can be a lot like gambling - if you're not careful! Knowing when you've crossed the line is extremely important. You are gambling when capital preservation is no longer your primary focus. Because the return on any investment is ultimately a function of how much you have invested, it's critical to protect yourself from taking losses of more 5 to 7% for any given investment. Gamblers are use to all or nothing deals. They get away with it because they only bet amounts of their total holdings at any given time. Investors, on the other hand, typically have everything on the table. As a result, it's critical that investors immediately protect themselves from investments that are losing money. One of the best ways to do this is to use what's called a stop-loss order. I seriously suggest you learn how to use them.
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Tip!
Don't fall for the myth: "You haven't lost any money until you sell". Trust me, if you own a stock that's headed south, you're losing money! Think of it this way, if you lose 50% of your money, you're going to have to double what's left - just to break even!
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Start Investing Online
Investing in Stocks and Bonds
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Tip!
One of the best ways to lose money in the Stock Market is to follow the advise you get from TV or financial publications. Keep in mind, when you get one of those hot tips, so do tens of thousands of other people. If brokerage firms or fund managers can predict the public's reaction (and they usually can), they stand to make a lot of money. And, you will lose a lot of money, if you're part of that herd. Just remember, Wall Street knows how to make money whether a stock goes up or down!
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Investing in CDs (Certificates of Deposit)
Investing in ETFs (Exchange Traded Funds)
Investing in Gold and Silver
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Tip!
Knowing when to sell an investment is always difficult. There are no set rules, however, if all of the following are TRUE, you should consider selling: 1) The equity has fallen below it's 200 Day Moving Average; 2) You would NOT add additional shares to your current position; 3) You know of other investments that are more likely to increase in value.
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Investment Tools
Distribution strategies . . .
As you approach retirement, your focus will change from how to grow your money to how to distribute it. In many ways, this phase is more challenging than the accumulation phase. In addition to the deciding on the size and number of withdraws, a good plan should factor in such things as taxes, inflation, and fluctuating interest rates.
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Tip!
Don't neglect the distribution phase of your retirement plan. Many strategies require years of lead time, before you make your first withdraw.
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Distribution Strategies
Annuities
More stuff to think about:
Spreadsheets & Calculators
Spreadsheets make quick work out of what would otherwise be a laborious task. They allow you to quickly narrow down your options by applying different sets of conditions to a variety of scenarios. It's always amazing to see what even the slightest change to the monthly contribution or to the expected rate of return can have on an investment over time.
Worksheets
Calculators
Good Luck!
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