Were you the kid in kindergarten that secretly ate paste in the corner? Or were you the one solving all the math equations from the end of the book on your first day in class?No matter who you were, it’s unlikely that personal finance and investing came easily to you. Being a financial genius can actually be completely counterintuitive and there is a lot of misinformation available online and it can be really difficult knowing who to trust. So, why not listen to today’s true financial geniuses?
Bill Bernstein, Morgan Housel, Bob Merton, John Bogle, Warren Buffett, Jonathan Clements and many others are some of today’s brightest financial minds. And, in many cases they prove the point that great minds think alike. They agree on many of the basic retirement investing principles.
Even though some of these suggestions may seem simple, don’t take them lightly. Even just one of these tips might give you a better chance at your dream retirement.
Here are 13 Retirement Investing Tips From Today’s Financial Geniuses…
1. You Must Invest
If you want to get ahead. If you want to make your retirement savings last and keep pace with inflation, then you really do need to invest.
Bill Bernstein is a retired neurologist and best-selling author who has written six books around the themes of investing, asset allocation, history and trade, including: The Four Pillars of Investing, The Investor’s Manifesto and If You Can: How Millennials Can Get Rich Slowly. Bernstein did not mince words in his podcast with Steve Chen, founder of NewRetirement:
“I’m going to sound kind of insensitive and cruel, I suppose, but when someone tells you that [that they are not invested and are holding cash], what they’re effectively telling you is that they’re extremely undisciplined. And they can’t execute a strategy and that’s the kind of person who probably does need an advisor. If you sold out in 2007 or 2008 and you’ve been in cash ever since, you’ve got a very seriously flawed process and you’re probably managing your own money.”
You have got to be invested in order to get ahead.
2. You Need to Save in Order to Invest
Do you have that friend too? You know, the one that constantly talks about his stock trades and how he can easily beat the market whenever he wants to?
I decided to confront him the other day…I asked him how much he had invested. His answer? $7,000.
Sure, last year, he did beat the market. In fact, he earned 25%. Too bad that was only worth about $1,500. For those of us that have $100,000 invested and earned a measly 10%…we made $10,000; approximately 7x more than our “investment genius” at work.
The key here? No matter much of a guru you are when it comes to stock picks and investment portfolio selections, you still need to contribute money consistently into your retirement! If you don’t, you’re going to earn 30% a year on zero…which is still zero.
As Jonathan Clements, the extremely seasoned personal finance journalist told Steve Chen,
“It sounds ridiculously simple, but the one lesson that’s been driven home to me year after year, is the importance of being a good saver, everything else is secondary… If you have great savings habits, good things are gonna happen, everything else is gravy.”
Clements has been writing for 33 years for the Wall Street Journal, Citibank and his own blog, the Humble Dollar. He wrote over 1,000 columns for Wall Street Journal alone and has authored eight personal finance books and contributed to two others.