Achieving Wealth the Right Way
From Tara Coates
There are four ways to achieve wealth, says AARP financial ambassador Jonathan Pond: marry it, inherit it, win the lottery...or live beneath your means.
"The real key to financial success is to save regularly and regularly increase the amount you save," Pond told an audience of several hundred Saturday at AARP's Vegas@50+ Member Event.
And don't stop investing, or become overly cautious, once you retire. Pond said that retirees often make the mistake of having too much money in cash or other investments that don't have a high rate of return. "You still need income and growth investments to meet the rising cost of living increases. Sure, you may be tapping into your retirement funds in four years, but that money will need you to last 20 or more years."
Pond also encouraged the audience not to forgo living the good life in order to pass along a "fat" inheritance to their children -- who, he said, "don't deserve an inheritance. They just don't. I tell that to everybody -- except my mother," Pond said as the audience laughed and clapped in agreement. Instead, he said, spend the money on yourself and enjoy your life. He closed the session by leading the crowd in a mock swearing-in session in which they all promised to "die destitute."
When it comes to housing, Pond encouraged the audience to downsize from a larger home, to a smaller, more manageable space. But what about having extra room so the kids and the grandkids can visit? "Take the money from selling the house and put them up at a hotel," he said. Plus, he said, there's what he calls "Pond's law of bedrooms": the more bedrooms you have, "the more likely your adult children will move back home."
Comments
R, S, says:
I agree you must live beneath your income. I do not believe in investing in the market. I will never go into the market ever. You are not investing but gambling. Would rather put my money in savings accounts and CD's in a bank or credit union that lends within the community. This has worked for my husband and I for 49 years. Have put 2 children thru college with advanced degrees. We have a comfortable income, and are building a new home with 2 bedrooms and will finish the basement with 2 more bedroom shortly. The children are welcome any time for as long as they want. My husband and I are not college graduates and my husband worked as a union plumber until he was disabled and I worked at service jobs thoughout our marriage.
If you compound a CD at 5% for 20 years it will compound out to an APY of over 8% with no downturns, no sleepless nights, just steady growth. I am happy and comfortable. This is about the same as being in the market.
11/15/09 4:54 PM
Gib Chase says:
What about index annuities that provide bonuses along with roll-up amounts and g'teeed income for life??? When would these be appropriate?
11/15/09 7:14 PM
Joseph L. Sexton says:
Although the market is stacked against the little guy it is the ONLY game in town for us to make any real money. The other comment on CD's, banks, credit unions is naivete, it does not take into consideration inflation. I started out buying dividend stocks and with G-D's help i am a millionaire, Have I lost money, absolutely but it was the lying & cheating by the officers of my own company ( Lucent Technologies) that caused that, not the market. They were warehousing equipment and stating it was sales. Our wonderful government overseers did nothing, no one was ever even charged, just as in Maddof, they really didn't bother. Of course in that scenario one lady did try and was told to drop it, seems her boss ended up marrying Maddof's niece, hmmm.
11/17/09 10:59 AM