They say, "The one thing you can count on in life is change." The industrial revolution, which lasted from about 1760 to sometime between 1820 and 1840 was the transition to new manufacturing processes, iron production usage, improved efficiency of water-power, the development of machine tools and began the change from wood to coal and other bio-fuels. It is still talked about as if it were a mere few decades ago, although there are some issues as to its use in today's living- that's progress, whether we all agree or not. Nowadays, with lightning speed we move forward with technology for one present year compared to at least 20 in the past. The things I see done by computer are staggering and unthinkable int eh past. While we are seeing the word change and do amazing things right before our eyes at a speed hard to comprehend, the fact is that the needs of investors are relatively the same as they were a hundred years ago. Consider this:
Growth: While the vehicles used for investors have changed, the simple primary goal has not: to grow your assets to have more money. Some invested, some panned for gold: all did it to grow their assets and net worth in their own way.
Durable Income: Need I say more? Without income, we have no food, clothing, housing, and all the basics since the cave man. Durable meaning that it will outlast you. The worst thing that can happen to anyone is to outlive their money.Healthcare issues:
With age comes healthcare issues (like it or not), and with healthcare issues comes expense. Money comes in really handy when you need to fill this very real need and added cost of living at a stage in life where income usually is decreasing.
Kids: My favorite saying about kids is "they move out, but they never leave." We all love our kids, but the expense of helping them at inopportune times can either put a dent in your lifestyle or cause you to make drastic decisions between helping your kids and paying for your food and medication. Yes, we love them, and it does create quite a dichotomy sometimes.
Aging parents: An issue that can be talked about for a lot longer than the length of this article, many boomers are finding themselves in this role reversal predicament.
The drive to do better than the last generation: Most parents want the best for their children and hope and help teach them to be more successful than we were- it comes from love and caring.
Preparing for retirement: Sooner or later, either by choice or necessity, retirement looms. If you didn't prepare, you will work until the day you die, or it will actually kill you.
Taking care of family: Need I elaborate?
Now, take a moment to look at the above again and pretend for a moment you were Pa Ingalls on Little House on the Prairie: nothing has changed. The time may be different, but the needs are the same. Average life expectancy is now in the upper 80's and living into the 90's and beyond is not uncommon- even longer for females than males. (There's a joke in there somewhere about men dying before women, but I have to go home tonight, and Elizabeth reads everything I write, so let's just let this one pass!) Durable income has become more important than ever, with a lifespan in retirement of 30 years or so. One of life's greatest tragedies is to find yourself in a place of outliving your money and income: so, if it happens to you or your spouse the next questions are what will you sell first, and which child will you move in with?
Why has mortality gotten higher and we are living longer? Clean water, advances in medicinal procedures and medications, safer work environments, better personal safety (seatbelts, airbags, alarms, safer travel etc.), technology of course, and the collective wisdom of global collaboration on everything from medical research to well, just about everything. What do all the above items have in common, you ask? The answer is planning.
You don't leave for vacation without planning it down to the last restaurant, you don't go to the supermarket without a list, and you call the doctor for an appointment when you don't feel well: it's all about planning. The sad thing is most people spend more time planning for their vacation than their retirement. The difference is you get a chance to re-do your vacation or go out to eat at another restaurant tomorrow- you don't get another chance at retirement: it is what you plan. In my mind, the most important point in the retirement conversation is creating durable income: income that you can't outlive. It takes planning, it takes time, and it takes professional help. If you don't have a plan for retirement, it's time to start. If you do, make sure you see your Certified Financial Planner™ for annual reviews to make sure you are on track. Review your 401(k) investment choices- don't leave it on auto-pilot. Then, just sit back and let the good times roll!!!
HAPPY THANKSGIVING TO ALL- MAY YOU BE SURROUNDED BY THE BIGGEST, FATTEST TURKEY KNOWN TO MAN (AND WOMEN!) ALONG WITH ALL OF THOSE YOU LOVE... ENJOY!