The Lost Years Club
“If you don’t know where you’re going, chances are you’ll wind up somewhere else.” – A Wise Pooh Bear
If you aren’t clear about where you are, and where you are going—financially-speaking, we get it. We understand what it’s like to be foggy about such things; we see it every day. People spend years—decades even!—lost in this fog. They are members of what Lee Eisenberg in his book, The Number, calls the Lost Years Club.
How Should You Invest?
The questions are always quick. It’s the answers that take some time.
Quick question: How much do you need to earn on your savings to get “there?” If you’re like a lot a folks, the quick answer is, “lots”.
Let’s say with a little more work you figure you’ll need around 8% annually to provide the lifestyle you seek.
Ok, follow-up question: How much can you afford to lose?
Quick answer, “None”.
Risk vs Reward
Have you ever stopped to think about investing and all the decisions that face you as an investor? If so, you’ve probably come to understand that investment decisions — past, present and future — are in many cases driven by one core set of criteria: How much return is appropriate for the amount of risk you are taking?
There are many factors to consider when investing, but the core theme of maximizing return for the lowest possible risk is pretty important, no?
How do you know h…