Radical Retirement for the Kids

Retire early and fly away

Last time we saw Christy Shen and her husband, Bryce, living one version of a radical retirement: they retired in 2014 (Christy was 31 years old) after only a few years of work. Each year while working they saved more than half of their earnings. Can anyone do that, or were they just lucky to invest when returns were high? Continue reading

Passive Investing: Seniors Near the Edge of Change

New England 2011_001 With Text

I recently taught a course to retirees on passive investing at the University of Georgia’s Osher Lifelong Learning Institute (OLLI). Many in the class had portfolios with various brokers or financial planners, some local, some far away, and the portfolios were complicated and laden with high-cost mutual funds as well as individual stocks and bonds. They were not making much money, and they wanted to hear about a different approach. Continue reading

Wrestling Unknown Knowns: Better Investing

Department of Defense photo

Department of Defense photo

Remember Donald Rumsfeld, Defense Secretary from 2001 to 2006? In response to a reporter’s question about weapons of mass destruction, he offered us valuable epistemological insight into known knowns, known unknowns, and unknown unknowns. Here’s a link if you have 35 seconds to enjoy a little history.

Mr. Rumsfeld never mention unknown knowns, with which investors often wrestle. Continue reading

Winning the Loser’s Game

Securities markets depend on markets for goods and services

Securities markets depend on markets for goods and services

Most of us enjoy movies, and there is a new one freely available on the Internet entitled, “How to Win the Loser’s Game.” If you have or want investments, this video is an excellent way to learn the essentials of investing. Fix some popcorn, open a soft drink and settle in front of your TV or computer. You will hear clear explanations of key ideas along with good interviews of people involved in creating modern investing.

Viewers can watch the film in one showing of 80 minutes, or in ten parts of varying length. The film comes from Britain, and the narrator has a pleasant British accent, adding perhaps a touch of class.

Continue reading

A Winner: Passive Investing in 2014


With the end of 2014, year-end investment returns are coming in, and two noteworthy results are these:

  • Passive investing, especially with Vanguard Group, continues to gain momentum
  • Passive investing, according to preliminary results, produced higher returns than many competing styles of investing.

Continue reading

What the Big Guys Say about Risk at Retirement


What should your stock allocation be at your retirement date, or in different words, how much risk (variability) should you tolerate near and at retirement? I discussed this issue in a series of posts earlier this year (see links at end), and recently the Wall Street Journal (WSJ) published an article (paywall) about it.  Continue reading

Make Money by Managing Investment Risks in Retirement

Managing your trip in a risky environment

Managing your trip in a risky environment

Risk is sometimes the elephant in the investing room, especially for retirees. People understand stocks as ownership and bonds as debt, but risk is hard to grasp and instinctively dangerous.

Later Living has recently published four posts on risk. Risk and high returns go together, so retirees who want high returns must deal with risk. Here are the four earlier posts knit together into one risk story: Continue reading

Killer Moves Can Help Wrestle Lumpy Retirement Spending

Afternoon at a long-term care facility

Afternoon at a long-term care facility

Retirement might be easier if spending needs stayed nearly constant from year-to-year, but they don’t. Long-term care, motor homes, family members in need, and other special plans require lumps of cash at particular times. Continue reading

Retirees Can Wrestle Investment Risk and Win

Peru 2010_0308

Investment risk is good in that it accompanies greater long-term wealth but it is bad if investors sell during a downdraft. Stocks are riskier (more volatile) than bonds yet offer more long-term gain.

Should retirees dial back their risk exposure to, say, 30% stocks, as is sometimes recommended, or can they carry much more risk, perhaps up to 70% stocks? The answer follows their goals and plans. Continue reading

Managing the Danger of Investment Risk at Retirement Time

Risk in stocks and bonds--Seventeen years of returns

Risk in stocks and bonds–Seventeen years of returns

When should someone retire? The answer may be fraught with danger if the retirement portfolio is overly weighted to stocks or other risky investments. There is one small window of time surrounding the retirement date in which sharp declines in stock values can ruin retirement. Continue reading