I had a great conversation with a client yesterday who told me he has finally decided to retire. He could have retired years ago but continued working because working is what he knew how to do. He said it’s scary thinking about retirement not only from a financial point of view but from a personal point of view it’s just as hard. Retirement and the thought of retirement can be filled with doubt and uncertainty. In other words, answering the question “What am I going to do?” can be a challenge. I have found in speaking with clients who are in or nearing retirement that this is a common … [Read more...]
What Should You Buy?
Even after a mini-correction in the S&P 500, most stocks still aren’t cheap. So what should you buy? In 1991 I wrote that utilities offered outstanding relative value compared to other securities. Utilities Offer Outstanding Relative Value Three industry groups should be emphasized for new purchases in your portfolio over the next few quarters: electric, gas and telephone utilities. My number one mutual fund portfolio manager (this month’s spotlight), Vanguard Equity Income Fund’s Roger Newell told me recently that electric utilities are now his top industry choice with 18% of his … [Read more...]
Are You a Baby Boomer with a Retirement Income Problem?
Originally posted October 23, 2017. You need income in retirement. It’s that simple. But to many, retirement income, and the lack thereof, is a problem that will never be solved. Over the weekend I read an article in the local paper about how dreadfully ill-prepared the Baby Boomer generation is when it comes to retirement income. And it’s a subject that comes up quite often in my conversations with prospective clients. They ask me, “How will I get income from my investments?” After I explain how we construct portfolios, I tell them that a good rule of thumb is to draw no more than … [Read more...]
A Difficult Phrase to Say: “Enough Already, I’m Retiring”
When a client of mine called it quits from a successful career working for start-up companies in California, he was young enough to keep working, but old enough to realize the cost was too high. He was stressed out, out of shape, out of the country at times, and plain old tired of the endless hours it takes to get a company off the ground. But not having something to do every day can be terrifying and not having a steady paycheck even more so. Sometimes it’s hard to say, “enough already, I’m retiring.” But he did it. He retired. We talked about part-time work and nothing came of … [Read more...]
Amazon’s Nomadic Retiree Army
Every year, Amazon needs thousands of extra workers to meet the holiday crush, explains Jessica Bruder in “Meet the Camperforce, Amazon’s Nomadic Retiree Army,” Wired’s adaptation from Bruder’s book Nomadland: Surviving America in the Twenty-First Century. Many of them are nomadic retirees living in RVs. In Amazon CEO Jeff Bezos’s estimation, a quarter of all nomadic retirees in RVs will have worked for CamperForce by 2020. Their reasons for working are not necessarily good ones and the story illustrates how quickly one’s retirement plans can be turned upside down—requiring part-time … [Read more...]
You’ve Read the Last Intelligence Report Now What? Part II
Being on the front lines every day talking with investors just like you, it never ceases to amaze me how much you appreciate Dick Young and how he has made you a more comfortable and successful investor. He made you self-reliant. He helped you beat inertia. How? You basically had no choice. You needed to know what he was thinking every month. He got your attention, which reminds me of an interchange we had when I first started working with him back in 1998. My job was to talk with prospective clients, learn about their situations and see if there was a way we could help. Prospects would … [Read more...]
What Investors Tell Me in 17 Seconds Without Saying a Word
You may be surprised by this, but one of the most common things I hear from prospective clients of Richard C. Young’s investment firm is this: “I’ve been reading him for years and I have no debt.” I have no debt. And with that I know I’ve found someone I can work with. Over the past 19 years of talking with thousands of prospective clients, it often takes me about 17 seconds to know if we’re going to have a happy relationship. It’s simply something I’ve figured out over the years. It’s not scientific. It’s not an algorithm. It’s more a feeling. I guess it’s more about one’s … [Read more...]
Can Money Buy Happiness?
A new study from Harvard Business School says it's possible money can buy happiness. More specifically using money to buy free time can make people happier. The researchers surveyed people in the U.S., Canada, Denmark and The Netherlands to find out "whether—and how much—money they spent each month to increase their free time by paying someone else to complete unenjoyable daily tasks." Then those surveyed responded to another questionnaire about "time stress." Karen Kaplan summarized the results at the LA Times, writing: Survey-takers were asked whether they paid other people to do … [Read more...]
Where to Live to Save for Retirement. It’s Not Where You Think
I’ve spent some time lately discussing states with booming economies like South Carolina, and states that are near bankruptcy, like Illinois. Depending on a state’s fiscal strength, or lack thereof, your earnings could be targeted to fill the gaps. And some states have a cost of living so high, no matter what you’re making, it’s nearly impossible to save. Maximizing your savings early on is the most important thing you can do to jumpstart the power of compounding in your retirement portfolio. But many Americans aren’t making very much money until their peak earning years, from say 45 to 65. … [Read more...]
Massachusetts MBTA Pension Problems
The $1.5 billion pension fund has 5,786 bus and train divers, track workers, and other employee members, reports the Boston Globe. And there are 6,685 retirees participating in the fund. Those numbers aren’t sustainable. Apart from numbers that look hard to reconcile, the fund is now embroiled in a bit of a scandal. Beth Healy reports at the Globe: Michael Mulhern took home $2.2 million in compensation as chief of the MBTA Retirement Fund in the eight years after the financial crisis, including $216,329 in 2016, when he worked just seven months. The compensation, released in response to a … [Read more...]
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