In this blog we look at how much money you’ll need to retire, and what you need to do to get there assuming you have ten years left of your working life. Note: the figures discussed today are simply a rule of thumb and don’t take individual factors into account.
In the third instalment of our biases series, we are asking: why do we believe fake news? Why do we believe stories or things that aren’t necessarily true?
Everyone knows Roger Federer is one of the best tennis players of all time. But he still has a tennis coach! It’s the same for a financial adviser. Despite how good they are, they still benefit from financial advice. At Money Over 50, while we are well equipped to deal with our own finances, we still value input from other advisers. Michael is Dallas’s adviser; Dallas is Michael’s.
Most people have some money saved for their retirement. Whether this is in superannuation or across other investments, they have generally thought about their retirement and are preparing for it. The issue is that many people are not proactive about their super. Each year, or each month, they get a balance statement, and if they see it has gone up, they are happy and think ‘I’m on track’. Unfortunately, that is not enough. The fact that the balance has gone up is actually irrelevant to whether or not it will be enough for them to retire with.
People put a lot of focus on the price of assets; specifically the price of shares.
Why is it so hard to fix our mistakes? Sometimes, decisions are not black and white – especially when it comes to our finances. We have many decisions to make when it comes to our financial future – but we get things wrong sometimes. The second part of our ‘biases’ mini-series explores our mistakes and why they can be hard to fix.
Everyone knows that company share prices go up and down – that’s a fact. What we don’t know is why they do – that is, what external events will affect the share market and when. Of course, there are people devoted to doing this for a living, and some people are more informed than others about trends in the market. What we are saying is that it’s not possible to predict exactly when a crash or a boom in the market will happen – the only thing we know for sure is that it will.
This is a pretty common question we get from our clients. It’s an understandable fear, given that market volatility is real. Fortunately, the situation is not as dire as it seems – even if you happen to retire the day before a big crash in the market.
We’re going to get a little philosophical here and make this statement: people in the modern world want lots of choice in their lives. They want options when it comes to making decisions. And with modern technology, information is abundant – providing so many options for everything we do.
This is the first in a 4-part series about human biases.
Human beings are funny creatures who do some strange things, including making mistakes. But there is some consistency around the mistakes we make. We have several biases that are obvious when it comes to our decision-making. And we want to discuss these biases in relation to financial decisions.
Dallas Davison, Michael Hogue and Ali Hogue.