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Do your investing choices let you sleep at night?

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Being different, being unique is great. We have been brought up differently, had our own experiences, and some of us had an education in handling money and some have not. Our parents may have been role

models when it came to money and paying the bills, and even taught us about budgets and putting money aside for upcoming expenses like the car registration or the electric light bill. As workers receiving a wage these things are important.

When we hit retirement, it changes and our income has to come from other sources. It depends on the number of money stools that you have built up. It could be that we are eligible for a government pension, we may have money in a retirement savings scheme like superannuation or from a 401K fund, and we may have savings.  It can be very tempting to go on a spending spree and buy all of those long desired luxuries. However, as we are living longer, well into our 80’s and beyond, our money has to last us a long time. It needs to be invested and drip fed back to us on a regular basis.

When we get to over 50 years of age then the sums of money we may have to handle can become larger, and this is when we need to learn and know about investing options for our nest egg.  We may choose to have a Financial Planner make the investing suggestions for us but I think it is important to have some knowledge of investing, expected returns, and the effects of inflation over time and how it effects our money’s buying power. We need to be able to ask our financial advisor some intelligent questions.

One thing that does need to be determined is what your risk factor is like. A Financial planner will want to know how risk adverse you are and will take into consideration your age, what you want to achieve and your ability to generate more income. There are many asset classes out there. These include: Property, Shares, Fixed Income, Precious Metals and now Cryptocurrencies.  Some investors are more comfortable with one type. Some have a combination and spread their investments between asset classes.  The 2007 Global financial crisis had repercussions around the world and those of us that had all our eggs in the property market took a big hit, some were wiped out.

Investing can be scary. There is an element of risk with any investments. For those that want investments that let them sleep at night then bonds are in an asset class to allow you to do that.   Elizabeth Moran is the  Director of Education for FIIG, the fixed income specialists, and will help demystify the bond market for us today. Listen to the episode here.

Until next time.

 

Ann

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Ann E Nelson is author, podcaster, retirement coach and blogger. Ann enjoys finding out about different investing options for those of us that are self directed investors. Ann also talking to people out how they are making their retirement savings last longer. Some have chosen to live overseas. It's always exciting catching up and seeing how people are enjoying their retirement.

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Guest Tuesday, 24 October 2017

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