Be an Owner Rather Than a Loaner in Retirement

June 26, 2014

One of the most common pieces of investment wisdom is that you should invest more in conservative “loan” investments like cash and bonds and less in more aggressive “own” investments like stocks and real estate as you get closer to retirement. This may have made sense when bonds were paying 6% or more but with long term bonds rates now closer to 3%, this could actually make it harder to retire comfortably or more likely you could run out of money in retirement. Cash is paying less than inflation. Rather than to low-interest bonds and cash, why not shift towards high-yielding dividend stocks and real estate? Here are some advantages of this approach: Continue reading “Be an Owner Rather Than a Loaner in Retirement”

The Risk of Not Taking Risk

April 17, 2014

Back in college in the late 90’s, I learned a valuable lesson about managing risk when I got caught up investing in the dot com bubble. It was so easy to put up two thousand dollars and see it double or triple overnight. But the bubble burst a few years later and I was left with less money in my account than when I started. I cashed out of day trading, fortunately realizing before I had lost too much that this was not a viable long term strategy. Continue reading “The Risk of Not Taking Risk”