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The Five Rules of Investing For Retirement Income July 20, 2009

Posted by shaferfinancial in Finance.
Tags: ,

Over the years I have found myself moving far away from the mainstream advice on investing for Retirement Income.  Here are five rules I have found useful:

1. There is no perfect system that can be adhered too.  And its corollary, you need to have your head in the game at all times.  You need to adjust to the financial environment as it is, not as it was.  What might have worked yesterday, is not always going to work today.  Make adjustments, sometimes radical adjustments using your best judgement and experience.

2.  You get better at investing, the more you do it.  Like most things, there is a learning curve which must be dealt with early on as you start to invest.  People who won’t get into the investing game or depend upon someone else to do their thinking or fail to take responsibility for their investing never get over that learning curve and subsequently fail.

3.  Never assume the things being told you are absolutely true.  For example, that stocks always give you better long term results than bonds.  Or mutual funds reduce risk of loss.  Challenge the herd or end up with the herd.

4.  Find an asset class you are comfortable with.  It might be one that is out of favor at the time.  But the more comfortable you are with it, the more you will pay attention and become an active investor.

5.  Adhere to the basics.  Which means avoid transfers [especially taxes], do your own research [use commonly found metrics], have a reserve fund,  don’t be  afraid to say yes,   manage risk rather than avoid risk.  *A little discussion on the ability to “say yes” is needed.  You will never find the perfect investment nor the perfect adviser.  Many people are constantly afraid of making a mistake, therefore always saying no.  This will keep you from getting involved in bad deals, but also will keep you from getting involved in good deals.  You will not learn to see the good from the bad.  You will ultimately fail.  Life is about living and taking risks.

If you follow these rules, you will set yourself up for success in investing for retirement income.



1. fencingclassics - September 29, 2010

Good points, all!

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