Estimating your retirement nest egg

For most Americans, retirement planning is ultimately focused on accumulating a “nest egg” of savings and investments to generate enough income to pay for a comfortable lifestyle.

To find out how large a nest egg you will need you must first estimate your “retirement income gap”. This is the difference between how much you’ll need each year to enjoy the lifestyle that you want and the amount of income that you expect to receive from sources including Read more

Striking the right balance with asset allocation

Harry Markowitz, Nobel laureate in economics and a pioneer in investment theory suggested that a fundamental responsibility of any investor is to manage the risk of their portfolio. The risk he was referring to is volatility: the ups and downs of stock prices during the year and from year to year. Investors who ignore risk in pursuit of returns expose themselves to intolerable portfolio declines prompting them to abandon their plan thereby converting temporary losses into permanent ones. Conversely, those who choose to minimize or avoid volatility entirely must be willing to accept returns that may prove insufficient to fund their future goals. Read more

Beware of “expert” financial advice – Part Two

In my last post, I talked about the newest book written by self-help coach Tony Robbins, “Money: Master The Game.” A portion of the book is dedicated to his human performance and achievement philosophy as it relates to financial success. In the next section of the book, he offers some useful information including common sense principles like spending less than you earn, starting a savings program early and allowing compound growth to work its magic. Read more