Daily Gains Letter

Retirement Income

To make sure you’re on track for a secure retirement it’s important to understand your retirement plans and set goals.  Retirement income comes from three different sources: Social Security, pension plans, and investments.

The average American will receive an annual Social Security benefit of less than $15,000 a year; or roughly $1,230 a month.  At present, only 50 percent of the U.S. work force is covered by an employer-sponsored pension plan; unchanged over the last three decades.

If retirees want to live on more than Social Security and pensions, they will need to find creative ways to increase their investment.  That’s why a sound, diversified,  investment strategy that encompasses stocks, bonds, mutual funds, real estate etc., are essential for ensuring you are more than prepared for retirement.

Four Tips for Retiring Wealthy

DL_Sasha_8When it comes to creating an investment strategy, there are many things to consider. Getting back to the basics, there are four points that everyone must accomplish to get the biggest bang for their buck. 1. Reduce Credit Card Debt While many might not consider reducing credit card debt as an investment strategy, it clearly is., the reason being that you are paying a very high interest rate on that debt. It is not easy to generate massive returns in the stock market, so if one’s credit card interest payment were 20%, one would need to generate a bigger return than that in the stock market to justify not paying off that debt. Reducing or eliminating unnecessary credit card debt is an easy initial step to ge ... Read More

Three Steps to Overcoming Losses in a Declining Market

Overcoming Losses in a Declining Market“What should you do when the house isn’t in order?” A good friend of mine asked this question back in 2011. At that time, key stock indices were plunging lower due to issues regarding the U.S. debt ceiling. There was uncertainty, and many wondered what would happen next. I remember this question now because the key stock indices nowadays are falling due to troubles in the emerging markets and there seems to be panic—similar to what we were experiencing when I first heard this question. When key stock indices are declining, instead of panicking and selling ... Read More

How Low Interest Rates Are Holding 144 Million U.S. Workers Hostage

144 Million U.S. Workers HostageAre the long-term retirement plans of working Americans being held hostage by the Federal Reserve? If the point of quantitative easing was to stave off a recession and spur jobs growth, I think it’s fair to say the Federal Reserve’s $85.0-billion-per-month money-printing scheme has been a failure. At the very least, I’m not so sure the money was well spent, and that the end does not justify the means. I enter as evidence almost $4.0 tril ... Read More

What You Can Learn from Missed Investment Opportunities

Missed Investment OpportunitiesOne of the basic rules that investors should follow when it comes to portfolio management is to not have a bias. What biases eventually do is either hinder investors from making better decisions or cause investors to not even recognize an opportunity that can take their portfolio to new heights. For example, take the Affordable Care Act, more commonly referred to as “Obamacare.” A friend of mine, who is saving for his retirement, has a bias when it comes to this topic. He says it’s not worth it for Americans, and it’s just another expense to add to the budg ... Read More

Three Easy Ways to Save for Retirement if You’re Self-Employed

DL_John_310113Many dream about being self-employed; being their own boss, and making their own hours. But, being self-employed also means being responsible for your own retirement savings. Unfortunately, many self-employed Americans seem to have forgotten this or have maybe simply chosen to ignore it until a later date. That could be a costly mistake. At present, only 50% of the U.S. workforce is covered by an employer-sponsored pension plan, unchanged over the last three decades. Furthermore, 71% of small businesses with fewer than 25 workers do not sponsor a retirement plan. (Source: Lichtenstein, J., “Financial Viability and Retirement Assets: A Look at Small Business Owners and Private Sector Workers,” U.S. Small Bu ... Read More

Five Inconvenient Truths About Retirement

DL_John_290113-150x88Even at the best of times, saving for retirement is not an easy task. Throw in economic uncertainty and low savings rates, and the idea of a well-fortified retirement plan can simmer away on the backburner, undisturbed for years. This may be a taste of things to come when you consider that Americans are retiring earlier, living longer, and saving less. A recent report shows that the confidence of Americans in their ability to retire comfortable is at historic lows. Just 14% are “very confident” they will have enough money to live comfortably when they retire; on the other end of the scale, 23% say they are “not at all” confident. (Source: “The 2012 Retirement Confidence Survey; Job Insecurity, Debt W ... Read More

Retirement Post Recession: Why It’s No Longer the Golden Years

Retirement Post RecessionWill your retirement mantra be, “save, save, save,” or “work, work, work?” That depends on how close to retirement you are—at least, according to a recent study published by The Pew Charitable Trusts. (Source: “Are Americans Prepared for their Golden Years?,” The Pew Charitable Trusts web site, May 16, 2013, last accessed June 13, 2013.) When the Great Recession hit in 2007, the oldest baby boomers were just a few short years away from retirement. And, after a lifetime of economic expansion and planning for retirement, they faced the rea ... Read More

How to Profit from Aging Baby Boomers and Real Estate

220213_DL_whitefootA REIT (real estate investment trust) is a company that owns and, for the most part, operates income-producing real estate. REITs are a great way for individuals to invest in real estate without actually having to own real estate. It’s also a great way to generate income from guaranteed dividends. To be a REIT, a company must by law distribute at least 90% of its taxable income to shareholders annually in the form of dividends. REITs pay out almost all of their taxable income to shareholders, so investors have historically looked to REITs for reliable and significant dividends—which are typically four-times higher than those of other stocks, on average. Because REITs pay out at least 100% of t ... Read More

Why You May Want to Increase Your Exposure to Stocks After Retirement

210213_DL_whitefootLife doesn’t stop at retirement; neither should your investment strategies. Retirement planning isn’t just about tucking money away for retirement and hoping it lasts. It’s about replacing your main source of income once you retire, with other sources of income; preferably with those that continue to generate income. In the old days (during the 70s and 80s), the retirement rule of thumb suggested that the portion of a portfolio be weighted toward bonds is equal to the investor’s age. This means that if you were 40, 40% would be in bonds and 60% in stocks. When you hit 70, bonds would make up 70% of your portfolio—stocks, just 30%. The older you get, the more you want to have in bonds, becau ... Read More