retirement – Personal Finance

March 4, 2024

Book Review-Your Money, Your Future

Written by R. A. Stewart

There are a number of books on personal finance on the market and one of these is “Your Money, Your Future by New Zealand financial advisor Frances Cook. In this book Frances provides practical advice and tips on managing your finances and how to formulate a strategy for achieving financial independence. There is no size fits all when it comes to designing a life and Frances makes allowances for that. Here are some interesting points from the book which I want to share in this article.

To calculate what percentage of your money should be invested in shares, deduct your age from 100. For example; if your age is 65 then 35% of your money should be in shares. I think that the majority of investors probably have a higher percentage of their money in shares than this formula suggests. It is really a case of your timeline as far as when you are going to use the money.
Putting your money into a savings account may feel safe to some people but over a period of time that money is losing it’s value because of inflation. Your money has to outpace inflation and it won’t do that in a savings account. Only your emergency cash fund should be kept in a savings account and money used for utilities and everyday living costs.
The rule of 72 explains how quickly you can double your money. It goes like this; simply divide 72 by the average rate of return on any investment. If the average return is 7% then it will take you 10 years to double your money (72 divide by 7).

This is the magic of compounding interest. This is all assuming that you do not take your profits but rather allow them to be added to the principal so that you are earning interest on interest.

You cannot beat the market so buy the whole thing! Frances talks about diversification here and explains how this approach beats trying to time the market every time. There is a saying, “Its time and not timing which is the key to making money on the share market.”
Retire to something not from something. Frances points out that life needs to have a purpose otherwise it will be meaningless. You have to have an end goal in sight for when you finish work. Your retirement plan does not have to involve spending, it could be spending more time with the family or gardening.

You may be able to find the book, “Your Money, Your Future” by Frances Cook on Ebay or Amazon if you live outside of New Zealand. In New Zealand, the Trademe auction site may have copies.

I have read a lot of books on investing and this one is one of the best. It contains several gems of advice relating to personal finance. Whatever your personal circumstances are, you will find this book helpful in pointing you in the right direction.

www.robertastewart.com

December 18, 2022

Investing for seniors

Investing for seniors

Written by R. A. Stewart

Your age is a crucial factor in establishing your savings and investing strategy. Your 20s, 30s, 40s, and 50s are your savings years. It is these years when you build up your assets.

Your 60s and 70s can be considered your spending years. It is when you tick off items on your bucket list while you are able to.

That does not mean that you do not have to work, a lot of older people are taking this option, not because they cannot make ends meet on their pension, but because they enjoy what they are doing.

In New Zealand, retirees will have access to their kiwisaver account once they reach the age of 65. Money invested in kiwisaver will be in growth, balanced, or conservative funds. Most people during their working life opt for growth or balanced funds.

It is time to decide whether to stay with the status quo or invest in more conservative funds.

Your age and your health are the two most important factors in deciding which fund to invest your money in.

Older people do not have time on their side to overcome financial setbacks such share market falls and so forth, therefore if you are 60+ it is a good idea to lean toward more conservative investments but still retain some exposure to risk.

It is worth mentioning at this point that New Zealand financial advisor and writer Frances Cook has a formula for calculating how much exposure you should have based on your age, and it is this…

Subtract your age from 100.

If for example you are aged 60 then only 40% of your portfolio should be invested in the share market.

I do not necessarily agree with this formula and my exposure to the share market is more than her formula suggests I have.

However, that is a personal choice; one that I do not necessarily recommend to you because your circumstances will be different as they are for different people.

If you are connected to the internet and you have a lot of spare cash in your account then I suggest that you place most of your money into an account that is not connected to internet banking. This is to reduce your chances of becoming a victim of internet scammers.

With internet banking being the norm, this could be difficult in the future though.

In any case I still believe that it will pay to arrange your finances so that if you fall victim to a scammer then not all of your money will be lost.

Don’t leave all of your money in the one account for goodness sake as some victims of scammers have.

If you are traveling then make sure you don’t have access to your life savings because if you do then so will be a scammer if they manage to get hold of your login details.

Scammers have all kinds of ways to trick people into handing over their login details.

Anyone can be a victim so don’t be proud by saying “I am not that stupid.”

As you get older you will have to invest more conservatively; that does not necessarily mean transferring from growth to conservative funds but investing some of your current savings into low risk accounts. The deciding factor is your timeline. How soon you need the money and funds which are going to be used within 12 months are best invested conservatively.

www.robertastewart.com

ABOUT THIS ARTICLE

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April 7, 2022

Dating dangers of older men

Dating dangers of older men

The internet provides older people who may be single for one reason or another to connect with others without leaving their home. However, there are traps which older people need to be aware of. The main being scammers, people who try to separate you from your money.

So, what are the tell tale signs of a scammer?

First and foremost, if you are a man then gold diggers are waiting to get their hooks into you and your money, but that is not the only thing you should be concerned about if you are using any of the dating sites on the internet. Scammers are using dating sites, however, it is not romance that they are after but your money.

There are several red flags to beware of with the most obvious one being that you, as an older gentleman will be contacted by a young lady half your age. It is easy for some men to be taken in by the sweet talk of a young lady. It feeds the ego and what man does not feel good about a much younger lady showing interest in him.

Discernment and commonsense are soon ignored and in a short time the talk of a relationship soon develops.

So what are the red flags to look out for?

The first and most obvious one is the huge age difference.

Lets face it, do you honestly believe that someone half your age will contact you in the hope of beginning a romantic relationship with you without having their own agenda?

Older people are seen as easy targets by scammers because by the time they have reach 50+ they have built up plenty of assets which includes savings.

So what are the tell tale signs of an internet scammer?

1 You are contacted by someone half your age who claims that age is no barrier.

2 She comes from an African country (but not necessarily)

3 There is always a reason why she cannot meet you down for a coffee.

4 She attempts to hasten the relationship before you have ever met

5 Make note of any giveaways to her location.

For example if she ends the conversation with, “I must have some dinner now.” and it is 10 PM your time then you need to ask, “What timezone is she at?”

6 She asks for money

If she asks for money then you are definitely dealing with a scammer.

What should you do or not do?

1 DO NOT send her any money.

2 DO NOT give out your phone number

3 DO NOT give out personal details about yourself.

4 Use a separate email address for signing up to a dating site, not your main one.

It has often been said, “If something is too good to be true then you can almost guarantee that it is.”

As has been said earlier, if you are an older man who is using internet dating services then you are going to be a target for internet scammers so you need to be careful what information you give out and to whom.