Well, How Do You Think About Your Retirement Income?

One of my favorite analogies for explaining retirement income is comparing it to taking water from a well. I realize that we’re fortunate and don’t need to do that much in this country, but let’s pretend that every day you go to a well to get your drinking water.  Of course, you need to rely on it for providing you with water for a very, very long time. In order for the ability to quench your thirst for decades, you want to be sure you have enough of a supply of water at all times.  But, you cannot control how much this particular well gets replenished with rain, so you would be careful to only take out the necessary amount to meet your needs, while not taking too much out and running a high risk of drying out the well.  The level of the water, in the meantime, will rise and fall depending on the season you’re in – those rainy, plentiful seasons, and those dry and arid times when there isn’t any replenishment.  Your job is to take what you need from the well, while having confidence in the ability to drink water even during those dry times.  Through rainy seasons and dry ones, you need to be able to rely on a steady source of drinking water.

Retirement income is similar to this, isn’t it?  > SEE MORE
Pete Dixon, CFP®

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Pete Dixon, CFP®

Partner and Advisor

What’s THE Most Important Thing You Can Do To Prepare For Retirement?

I was thinking about this question while reading an article a client sent to me.  You can find the write-up here, and it’s a helpful “countdown to retirement” with many tips to consider as you approach retirement.  As I looked through the list and thought about covering these issues with our own clients over the years, the question came to mind: what is the most important financial planning step you can take to feel great about your retirement plan?

It’s really a tough question since there are a lot of important issues to consider when “taking the leap” away from a career that you’ve had for so many years.  Topics such as health insurance, do you have enough saved, are you invested properly, Social Security timing and others are obviously important to explore.  There’s also the softer part of the equation: how will you spend and enjoy your time?  Should you still work?  How will you miss the social aspect of working and contributing?

But if I were forced to answer, what would I say is the most important question?  That’s when I realized it’s the one that I have been recommending most lately when helping someone plan for retirement.  It’s this simple question: how much do you need to live on (and how sure are you of that?)?    > SEE MORE

Pete Dixon, CFP®

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Pete Dixon, CFP®

Partner and Advisor

Would You Pay For Your Doctor’s Trip To The Bahamas?

What if you knew that your doctor was more highly trained to sell you a specific drug that paid him much more money than any other suggestions he could make for you, even if it wasn’t in your best interest?  On top of that, what if you knew that this doctor had sales targets where his income would increase drastically for selling enough of this medicine each month?  He could provide you with advice and receive his standard fee, or he could suggest that you take this drug and he would receive $70,000.  In addition, if he sold enough of this in a certain time period, the drug company would send him and his family to an all-expense paid, posh trip to the Bahamas.  Does he maintain his ongoing education as a doctor?  Sure, he does—enough to maintain his license.  But more of his training these days is put toward attracting ‘customers’ into his office to convince them to buy this drug.  I mean, why wouldn’t he?  The opportunity is to make millions more per year, so he’d prefer to hone his skills with talking you into buying more of this drug, and getting to know your friends and family so he can sell it to them too.

 

Here’s a question for you:  would you work with this doctor?

You might say “of course not!”  And I certainly wouldn’t either.  But what if I told you that this is exactly what is going on in the investment industry? > SEE MORE

Pete Dixon, CFP®

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Pete Dixon, CFP®

Partner and Advisor

Thinking Differently About Investing

I can remember having that “light bulb moment” early in my career.  It was the late 90’s, and I was eager to find out what the “secret sauce” was that gave investors an edge.  I can remember analyzing the past performance of many, many money managers and continually discovering a common theme.  Those managers with better long-term track records proudly admitted that they paid less attention to shorter time frames.  They didn’t care what the stock market was going to do in any one, three, or even five year period.  Those who ended up with better returns than most of the other managers cared more about holding onto the stocks of businesses for longer periods of time and didn’t allow short-term volatility to get under their skin.

 

 

This is how it began to dawn on me: maybe it wasn’t important to try and figure out what the market was going to do, in order to be a successful investor.   > SEE MORE

Pete Dixon, CFP®

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Pete Dixon, CFP®

Partner and Advisor

How Should We Rank The World?

Maybe you wonder as you peruse the global news headlines with your morning coffee:  “What really IS inside my international investments, anyway?”  Or “Did Turkey’s stock market really go up by 252% in 1999?” Okay, maybe that’s a stretch and you’re not wondering about that.  While we certainly hope that’s not on your mind, we do think it’s interesting to peek into the world of our investments and point out the messy truths of international diversification–especially with this area of portfolios doing very well as we head to the end of the first half of the year.

Let’s expand on last month’s post (here), where we reviewed the size (market cap) of markets worldwide.  What if we could see the last 20 years’ annual performance, in order, for 41 various countries across the globe?  More importantly, what can we learn from it?  The picture below ranks the annual stock market performance for developed global markets (from highest to lowest) over the last 20 years:

Click here to view an enlarged image

What can we take away from an image like this, to help us to be better investors?   > SEE MORE

Pete Dixon, CFP®

Posted by:

Pete Dixon, CFP®

Partner and Advisor