Learn from others

Sometimes I write posts to edu­cate. Others, I write to share my obser­va­tions — a small nugget that catch­es my atten­tion and why it’s done so can help you get com­fort­able with invest­ing, with mon­ey. (It took me a very long time to get com­fort­able with mon­ey, for so long it was all about safe­ty and if I let even $1 go I was less safe. But, I digress…)

Some of you know that I’m a mar­tial artist. Have been since 1980 (coin­ci­den­tal­ly, the same year I start­ed invest­ing in stocks, though it would be until the next year that my life changed when I got my first div­i­dend). When stu­dents have an injury, they’re encour­aged to come to prac­tice just like every oth­er stu­dent. But their prac­tice is dif­fer­ent. They may just sit and watch, if that’s all they’re capa­ble of with their injury. We’ll even pull a chair onto the dojo floor so they can watch com­fort­ably (though they are required to sit prop­er­ly — which is itself a prac­tice). They learn to watch oth­ers, and train their obser­va­tion­al skills & their men­tal train­ing.

I like to watch

I watch and observe a lot. I’m a syn­the­siz­er. That means that I’m a big pic­ture per­son, one who needs a lot of inputs to inform how I learn.

In any case, all of that leads me to this arti­cle, ‘For smarter retire­ment plan­ning opt for life­time income’. I’d have writ­ten it with a slight­ly dif­fer­ent style — per­haps a few head­ings to make it eas­i­er to read. That said, if you can work  your way through it, it’s short and makes a lot of good points. Including:

…accord­ing to recent stud­ies, over 50% of Americans will live longer than their mon­ey

and

Would you rather have a large nest egg you siphon mon­ey from, or a life­time stream of income you can’t out­live?

I have found that the old­er a client is, the more they wish they had planned for month­ly income. AARP pre­dicts near­ly 40% of retired Americans will be forced back to work because of insuf­fi­cient income.

But what if you can’t go back to work? Or don’t want to?

My grand­fa­ther worked until into his 80’s, and lit­er­al­ly had to be kicked out because they knew it was too much for him (even part time).

The future of work

I believe “work” is chang­ing, and we’re mov­ing away from this idea that we have a peri­od in life where we “work” and a peri­od where we “retire”. That said, like my grand­fa­ther who loved being a tai­lor and work­ing with peo­ple, I hope we can all “work” at some­thing we love in a way that sat­is­fies us, rather than the drudgery of a 9–5 that we keep for the pay­check.

Put your money to work so you can be free… to work (but on your passions)

In any case, invest­ing for income is impor­tant, but… as we live longer, it’s also impor­tant to accept some risk so that we have the oppor­tu­ni­ty for more reward (they go togeth­er when invest­ing). That often means more invest­ing in the stock mar­ket, and less in bonds and trea­suries (where income is usu­al­ly found).

Investing in div­i­dend pay­ing stocks has a his­to­ry of real­ly good returns. It’s a great way to build an invest­ing port­fo­lio that will allow you to plan your finan­cial retire­ment based on income. On the oth­er hand, you won’t be as like­ly to run out of mon­ey because you’re less depen­dent on the prin­ci­ple that you’ve stashed away.

It’s bet­ter to learn these mis­takes from oth­ers by watch­ing while we’re still young enough to change our behav­ior, than to learn them first hand once it’s too late.

Why not get start­ed?

You can do it.