Understanding Good Investment Strategies

Retirement Philosophies

Unlike Educational responsibilities, retirement planning is something every individual MUST address…And the earlier the better. Thirty years ago, most executive were company people. The vast majority knowing that their future was located within this one entity. Within the past fifteen years, most executives, whom miss promotion, or feel that opportunities for advancement are restricted, move to other companies. If they are lucky enough to have contributed to in-house retirement programmes, these normally can move with them, however, often much diminished in value by opt-out and opt-in fees. Many unsuspecting expatriates, spending twenty years of their working lives overseas, often retire and find that their retirement benefits were based on their "Homeland" basic salary and took no account of overseas allowances, bonuses and commissions. Thereby ensuring that the lifestyle they had become accustomed too, had no possibility of being sustained.

In over thirty years, nothing has saddened the writer more than meeting individuals expecting the fruits of a lifetimes work to sustain the quality of life they imagined their retirement would bring…Only to find that procrastination, lack of realism, genuine mistakes or events beyond their control… combine to dash that optimism. THERE IS ABSOLUTELY NO EXCUSE FOR AN INDIVIDUAL NOT TO PROTECT THEIR FUTURE, if some simple research indicates that projections will not meet future needs. It is the one time that the individual can fully control events and equally the one time that the individual is solely responsible to themselves.

As we have discussed earlier, quality of life and dignity is not something that one can be arbitrary and address with impunity. I have met many business people whom have told me over the years, that their business will sustain them during their retirement. Most times they do. However, there are quite a large minority, which couldn't, and the best description of their plight is via Mr. Micawber a character in Charles Dickens' novel David Copperfield whom states with clarity " Income one pound, expenditure nineteen shillings and sixpence… Happiness!. Income one pound, expenditure one pound and sixpence… Purgatory"!

A business established for more that five years, that cannot provide to its owners, the same, ongoing benefit package, as that necessary to attract a successful professional to do the same job. IE car, high enough income to sustain a quality of life and a sufficient surplus to facilitate the short and long term, independent personal financial security, is not a successful company and is unlikely to be strong enough to withstand the vagaries of outside negative influences beyond the control of the owners. I have heard too often the tragic stories of those too old, to correct mistakes, looking ahead to a dismal future.

IF WE GET IT WRONG, AN INVESTOR ENDS UP WITH A FEW HUNDRED THOUSAND DOLLARS MORE THAN THEY NEED. IF AN INVESTOR GETS IT WRONG… PURGATORY.

The above cannot be understated.

Next: An Exercise in Analysis