Once again we’re ‘back to the future’. Another cliff looms ahead of us in March. Whether created or imagined, it is the news event de jour. Feeling like James Dean? For good reason. The ride is great fun – as long as you can jump out of the car before it flies over the cliff.
Homes are cheaper, as are mortgages. Getting a loan to buy a home is a real challenge today. Employment is rising – getting a job is the hard part. Renting is easy and inexpensive, so far. Why not just rent during retirement? Good questions. It can make sense in your situation, certainly. Publicly traded companies have cash in the bank. They can afford to expand, as demand returns. They can afford capex, as they see an optimistic future. They can afford dividends – what better way to reward shareholders?
Tweedle Dumb and Tweedle Dee. DC and Main St. The latter have more horse sense, the former can trade a horse for a mule. DC doesn’t care a whit about Main St., other than at vote buying season. Inside the Beltway is a wonderland of nonsense, as least from this perspective. Lucy will always hold the football, Linus will always run up to it and she will always pull it away. The cartoon has become reality.
Dividends from good firms that have little debt and a strong history of increasing shareholder income make sense in a retirement portfolio. Investment grade bonds from firms with strong cash flow and the ability to service their debt will continue to make sense for the retirement portfolio. Fears of inflation and an increase in interest rates will eventually come true, that is certain. Bond mutual funds will be destroyed as this occurs. They have too many bonds across too wide a margin of investments. The entire ship will sink under the waves of inflation to come. Individual bonds will survive to maturity. As they do, you will buy new, higher yield bonds of shorter duration as you manage your portfolio.
Stocks will do quite well as inflation returns. Dividend paying stocks will lead the pack, as their net income increases with greater sales at higher margins, allowing them to pay better dividends.
How to Invest in 2018 With Retirement Looming?
Life is no doubt a rat race, but again you need to take a break and lead a life of harmony and freedom. That is why retirement days are often called the golden days of a person’s life. One of the most vital things that you can do for your peace of mind is to plan for your retirement days. The stock market fall and the lingering economic depression in the first ten years of the 21st century landed many individuals in economic stress and debt. When your debt is quite overwhelming, it’s quite obvious to get confused between bankruptcy vs debt consolidation. Above anything else, fiscally planning for your wiser, older years will make sure that you don’t land into problems after you retire from your work. Retirement needs a lot of careful planning, but only few people give it the attention that it actually deserves. Following are a few simple ways to plan for your retirement days while you pay off your debt.
According to some financial advisers, the greatest mistake that a person makes is to wait for a longer time before they start saving for their retirement days. People who start saving in their early twenties will have considerably more cash than those who begin saving in their thirties. If you’re thinking of savings, investment and IRAs, do it in your 20s. This is the ideal time to invest aggressively and undertake risks. Also look for opportunities that’ll provide you with the maximum return in the long run.
Repay your debts
Before you retire, make a proper plan to repay all your debts. Your goal should be to enter your retirement with zero outstanding credit card debt. Once your payable amount starts reducing, your monthly expenditures also get lowered. It’s not really a good idea to step into retirement while you’re still making payments for your credit cards or mortgage. Once you pay off your debts, you’ll be able to enjoy a more comfortable post-retirement life.
Keep your savings out of your reach
When a person starts saving for his retirement days, he faces countless difficulties in successfully accomplishing it. To be exact, an individual saves a certain amount but mostly finds himself with a minimum balance on his savings account. The reason behind this is that, he spends the entire cash even before it reaches a particular level to provide him with any achievable income. Remember that you are the principal danger to your own money and the single way to avoid it is to keep your savings in a savings account. Look for an account that’s not liquid and shall indict a penalty for taking out cash. This will help you in saving higher amounts of cash for your retirement.
You might also take the help of a financial planner in order to build a high-quality investment and savings plan. This is mostly important for those who possess little knowledge on finances, or are thinking of investing large amount of money and require the assistance of a professional.