For some people, investing financial capital is as much a game as it is a life strategy. Tracking national and international data; scanning trends in industries, continents and technologies, and watching market indexes rise and fall are titillating adventures that unfold in the money pages every day.
For most people, however, investing in financial assets is an investment in their own future. Without careful, methodical financial practices, they may have no other financial options when they reach retirement age except to keep working. (Other than perhaps moving into the room over their son’s garage – not a glamorous outcome for a dedicated, reliable employee who’s put their life energy into doing good work for a good wage). And for people who want more than to subsist on a (potentially very limited) social security benefit, investing – successful investing – is the only option for a truly happy and comfortable “golden age”.
Global Markets Are Volatile and Connected:
Today’s global economic whirl poses a challenge to every investor, gamblers and conservatives alike. In the US, the dollar continues to gain strength against other currencies, as that country finds its feet again after the 2007-2009 Recession. The Euro, on the other hand, is mired in its Greek controversy, and Italy may yet still flounder amid low growth and high debt. China has announced plans for an overhaul of its manufacturing sector over the next decade, although it has yet to demonstrate full compliance with its own standards regarding international manufacturing processes. Because of the lightning fast advance of technology, all these disparate economies are now intrinsically linked together. Investing in any one area is bound to influence, and be influenced by, factors in the other areas.
These economic realities make it understandable why some people would rather opt for the garage room than tackle any financial decision-making challenges by themselves.
Basic Steps Still Matter:
No matter where you are in your retirement planning journey, there are some basic steps that can be taken now that will at least get you moving in the right direction.
Save your Money:
Optimally, saving a certain percentage of your income every month has been your habit since you started working. For most people, though, that’s not been a possibility. Children, home ownership, health issues, etc., can all conspire to prevent significant saving at any time of life.
Strategize Social Security:
Although for younger Americans Social Security may not look all that enticing, for those significantly invested in that system, choosing when to access this resource can mean the difference between a “getting by” monthly payment, and a “fairly comfortable” monthly payment.
Create a Diverse Portfolio:
A skilled financial adviser can offer advice and direction through each of these decision points. There are thousands of investment options available, each of which offers high and low risks, high and low returns, and everything in between. Stocks, bonds, annuities, real estate and the myriad of options coming from across borders make this an exciting but confusing market to enter or in which to participate.
Understand Your Preferences:
Before beginning (or continuing) any financial planning conversation, contemplate your personal motivations and objectives for expanding your retirement funding opportunity. You’ll want to be clear about when you want to retire, where, and under what circumstances. Understand your tax situation – it may change as your investment strategy succeeds. Be especially attuned to your tolerance for risk. There are always options with potential for great returns or the possibility of great losses. Be comfortable with the choices you’re about to make.