Tag Archives: People
The Secret to Making More Money That Most People Don’t Know
I’ve found what really works when it comes to income investing. It’s a secret that could help you earn returns nearly triple most “regular” income stocks
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Young People Better at Retirement Planning
NEW YORK (MainStreet) — When it comes to socking away money for retirement, young Americans are putting their parents and grandparents to shame.
That’s the conclusion of a survey by brokerage firm TD Ameritrade, which asked Americans young and old what they are doing to fund their retirement. The good news is that most of us are at least saving something for retirement: A solid 85% of Americans have either a 401(k) or an IRA, and 36% have both.
A survey finds that the offspring of baby boomers are better at saving money for retirement than their elders.
But when it comes to actually taking advantage of the full range of retirement options out there, there’s a big generational divide at work — and for once it’s young Americans who are proving to be more responsible than their elders. Just 16% of working baby boomers are funding both an IRA and a 401(k), compared with 25% of members of Generation Y and 23% of Gen Xers. “Mature” Americans (defined as those born between 1930 and 1945) fared even worse, with just 9% saying they funded both accounts.
When People Talk About Retirement Saving, What They Are Really Talking About Is Converting Your Human Capital to Financial Capital
It isn’t unusual for the financial press to make retirement saving more complicated than it really is. At its core, all retirement saving represents is the process of converting your human capital into financial capital so that you can collect dividends, interest income, and rents from stocks, bonds, and real estate in lieu of a paycheck from an employer once you are unable or unwilling to show up to the office.
How comfortable your retirement is comes down to a handful of very important factors:
1. How much financial capital you have,
2. The after-tax, net-of-inflation risk-adjusted return you earn on that financial capital, and
3. The surplus or deficiency of that income relative to your household income during the peak earning years of your career.
When you understand this, it becomes much easier to gauge your progress and calculate whether you are on path for a sound, enjoyable, golden sunset or a nail-biting, hair-pulling, stress-inducing maelstrom caused by a constant fear of lack.
