10 Tips about Retirement Investing

transcript

Presented by

Olderhood.com

The fastest growing website

for the fastest growing segment of our community.

First the commercial message !!

Olderhood.com

is a Blogsite

& Facebook & Pinterest & SlideShare,

providing quality articles, reports, surveys, information and humor for the “Oldster” community.

Olderhood.com is owned and published by Oldsters themselves.

Tip #1

Prepare a Budget

• Work out your monthly income from pensions, investment income, etc.

• Work out your normal monthly expenses

• Add in a “fudge” factor for expenses and divide equally by 12 to get monthly

• Include an annual travel amount and divide equally by 12 to get monthly

• Be aware of unexpected expenses (you can’t budget unexpected)

• Monitor this budget every week/month and adjust accordingly.

Tip #2

Analyse your pension fund statement.

• Make sure your pension provider sends you a statement monthly/quarterly

• Get to understand what all the lines and boxes and numbers mean

• If you don’t understand … ask. There are no dumb questions.

• Fully understand the difference between value increases and income.

• Compare this statement to last month’s, and last year’s same month

• Do NOT throw them away, use a file/folder, and hold on to them.

Tip #3

Understand your Pension Fund Portfolio Mix.

• The Portfolio Mix is the make-up of your shares, mutual funds, bonds, etc.

• Clearly understand what each asset class (above) is doing for you.

• Be clear on which asset class provides (cash) income and value increase

• As your needs change (check your Budget), change the Portfolio Mix.

• As you get older, the typical Portfolio Mix is to increase more Fixed Income.

• Fixed Income means income from a Bond for example which doesn’t fluctuate.

Tip #4

Self-Managed Pension Funds

• This simply means that you do not use an outside, or professional, manager.

• If you know what you are doing, this is a much more personal approach.

• This will more easily help you correlate your Budget and your Portfolio Mix.

• But this is not for the faint-hearted, or “know-it-alls”

• Be constantly watching your Portfolio and Financial News for change

• Be constantly updating your income/value projections.

Tip #5

The name is Bond

• Companies, Governments, etc issue Bonds.

• They are investments which pay a set interest rate (“Fixed Income “)

• If market interest rates go up, Bond Values go down, and vice versa

• Bonds will normally have a Call Date when the Borrower can call them in.

• Find out the difference between Coupon Rate, Yield to Maturity, Yield to Call

• Generally, Bonds pay better interest rates than Savings accounts etc..

Tip #6

Ordinary Shares (“Equities”)

• These are shares issued by companies on the NYSE for example.

• Shares have a Buy Price and a Sell Price - values fluctuate.

• Shares usually, but not always, pay an annual dividend (usually quarterly)

• Ordinary Shares are deemed higher Risk than Bonds - be aware

• Ordinary Share Prices are influenced by the company’s performance, and the economy

• Ordinary Shares are potentially high overall return investments - but NOT always.

Tip #7

Preference Shares

• Preference Shares are typically issued by companies.

• They will usually be quoted on the Stock Exchange e.g. NYSE.

• Preference shares typically have a fairly stable dividend payment plan.

• Generally speaking Preference Shares do not wildly fluctuate in value.

• Preference Shares typically rank higher than Ordinary Shares in terms of (less) Risk.

• Preference Shares from a quality company are usually good investments.

Tip #8

Mutual Funds.

• This a great way to manage your Pension Fund/Investment Portfolio.

• Mutual Funds come in all sorts of shapes and sizes… shares, bonds, cash, etc

• Mutual Fund Managers also come in all shapes … the good, the bad, and the ugly

• Track Record is a good indication of performance - but should not be THE sole driver

• Monitor the Fund and the Manager regularly.

• Mutual Funds, if chosen appropriately, are deemed to be lower Risk

Tip #9

Cash Flow versus Value Increase.

• Cash Flow means cash flowing into your bank account (or reinvested)

• Value increase means the portfolio goes up, but no cash inflows.

• If you don’t need the cash for living purposes then consider value increase.

• If you do need the cash for living purposes then seek Cash Flow.

• If you intend to leave money to the kids, balance between Cash and Value.

• If you expect to live long (hope so) then be cautious about that balance.

Tip #10

Drive carefully.

• It’s easy to Buy, but not so easy to Sell

• When someone tells you it’s too good to miss, it’s probably worth a miss.

• Watch all trading costs, including mutual fund fees

• If it’s a dud, cut and run

• Never be oversold by an enthusiastic manager, especially if he’s young

• And Remember … It’s YOUR MONEY – Got it...?? ……… YOURS !!!!!

Meet the Olderhood Team

Bill Storie, Founder

Robin Trimingham, Co-Founder and Editor

Roger Crombie, Lead Contributor

10 Tips about your Retirement Investments

Olderhood.com

From Childhood,

through Adulthood,

to Olderhood.

Come join us.

10 Tips about your Retirement Investments

10 Tips about Retirement Investing

Economy & Finance