November 19, 2013MSN Money: How to rescue your retirement at 55Since this is a mainstream article one can probably assume that there are a lot of people interested in rescuing their retirement at age 55 or at the very least there are a great many people interested in how the retirement rescue advice might apply to them.
I have rearranged the order of the advice to maximize the dramatic effect.
1.
Reduce your consumptionThis works for everyone. If everyone does it, then we can expect the economy to crash again.
2.
Don't plan for retirement; plan to keep workingThis works for everyone. If everyone does it, then we can expect many of the younger among us to be stuck in low paying jobs and/or
the unemployment lines. As an added bonus, since many are already straddled with student debt they won't be able to afford new homes. And without the ability to afford new homes, we can expect another housing crash.
3.
Tap your house as an asset sooner rather than laterThis works for everyone. If everyone does it, then we'd expect to see another housing crash. Selling your house and moving into a smaller less expensive one is net selling on average (by dollar amount). A crash is especially likely if everyone is consuming less and delaying retirement. See steps #1 and #2.
4.
Stay in equities longer than you may think 'safeYou can increase the chance that you'll earn a higher return by staying in equities for longer and in a greater proportion.
Desperate people feel the need to do unsafe things. Increasing the chance implies that there is still a chance you could earn a lower return by staying in equities for longer and in greater proportion. This would make sense since stocks are considered "risk assets" and each one of the previous 3 steps in could be considered crash worthy on their own. Further, the wicked combination of all three steps at the same time could prove to be very crash worthy indeed.
In the post–World War II era, when interest rates rose after a long period of artificially low rates, bondholders lost money.
This is opposed to the pre-World War II era, when interest rates did not rise after a long period of artificially low rates. That era was in the aftermath of the Great Depression. Some sort of housing bust was eventually followed by a world war but let's not go into that now. Desperate people should not be reminded of Great Depressions and world wars, especially world wars
removing global industrial capacity to the USA's manufacturing and industrial benefit. That could be greatly depressing, especially if we have no intention of successfully removing
excess global industrial capacity any time soon.
Since you will probably live to about 85, do not go into bonds until you are about 70, and then only gradually," said Charley Ellis, a consultant to governments and large institutions and a former board member of Malvern, Pa.–based Vanguard Group.
Wait until the last possible moment on the off chance that the
long-term trend actually reverses and that very few will be buying bonds when you are age 70. How many other 55 year-olds are desperately attempting to rescue their retirement? Do what they do! Postpone and pray! It's not like we could be stuck with
ZIRP for 20+ years like the Japanese were after their housing bust in the 1990s! Right?
Stick with stocks like the Japanese did if you want to have a sporting chance!
October 24, 2013BBC Sport: Gambling footballers take out payday loans - Sporting Chance"I was going to the dogs more regularly and that's when it became a problem. I started going to the bookies during the day. It just snowballed to a point where I was frequently spending a month's wages and then borrowing money off loan sharks.
"Towards the end it got very, very bad. There was a point where I was clearing 30 to 40 grand a month and within a week or two that was gone.
"When there was no money left there, I was getting it from elsewhere to fund my habit."
This is not gambling advice. You know this to be true because if it was gambling advice then I'd be mentioning
record margin debt and I have no intention of bringing that up in polite conversation.
