By Roger Nusbaum, AdvisorShares ETF Strategist
Over the last few days, I had the chance to have very similar conversations with two different friends about their plans (or lack thereof) for when they will retire. Both friends are close to me in age (one exactly my age and the other four years older), both are at least moderately successful in white collar jobs and, while I don't know how much either has accumulated, they have been putting money away such that neither of them has reached 50 years old (or close to it) with only $10,000 in the bank.
This type of conversation is logical to have in a social setting (one was at dinner in San Diego and the other on the trail here in Walker) starting at some middle age. If you are in your 50s or older and reading this then you probably know what I mean.
Friend A is the one exactly my age, wants to retire at 50, but doesn't think he will be able to - I got the sense there was still a remote possibility but highly unlikely. Friend B, who is four years older than me (he will be 52 in September), wants to retire in general terms but he says it will be a while.
I have a lot in common with both friends, but I don't want to retire (this is a point I have made many times over the last ten years of blogging and I concede that the 55 or 65 year old me may view this differently than the current version), I do however save as if I am going to retire.
The point is three different people with a lot in common with different thoughts about how to retire and different priority levels for retirement.
The conversation on the hiking trail was more in depth and my friend made a comment that I think would be interesting to financial professionals and to someone interested enough in investing to read this blog. It will be interesting to FPs for obvious reasons and I think it will be interesting for do-it-yourselfers to the extent, as I have contended previously, you are probably the go-to-person in your social circles for investing and personal finance advice.
I told my friend he doesn't necessarily need to hire someone (he has a guy), but there are no short cuts in doing it yourself; you need to put the time in. For most people, doing it themselves is simply a function of time available and inclination. He is smart enough, but simply prefers not to spend that amount of time on it and has the self-awareness to realize that if he doesn't want to spend the time, then he needs to hire someone who will. He wants to know what is going on, but wants to delegate the heavy lifting.
The friend hoping to retire at 50 is in part influenced by his father who retired very young which amuses me as part of my belief of never retiring is influenced by my father who will be 88 next month and still works (he does not draw an income and is a full time volunteer along the lines of how I volunteer with our fire department).
The point of this post is to try to create some context for disparate views that exist regarding financial matters even with people that otherwise have a lot in common. A financial professional can't tell a client their beliefs are wrong, only point out what things might be in their favor and what obstacles they might incur. As an individual with some influence, your belief system is no more or less valid than anyone coming to you for advice, just different. A great example of this difference might surface in the desire to leave an inheritance. For some people, it is a very high priority and some folks, like the musician Sting, don't believe in leaving (meaningful) money to their children.
It is also important to realize that what you think you want in the future might change substantially, be open to that possibility and try to factor that in to your plan if at all possible.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: To the extent that this content includes references to securities, those references do not constitute an offer or solicitation to buy, sell or hold such security. AdvisorShares is a sponsor of actively managed exchange-traded funds (ETFs) and holds positions in all of its ETFs. This document should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any products mentioned. Investment in securities carries a high degree of risk which may result in investors losing all of their invested capital. Please keep in mind that a company’s past financial performance, including the performance of its share price, does not guarantee future results. To learn more about the risks with actively managed ETFs visit our website AdvisorShares.com. AdvisorShares is an SEC registered RIA, which advises to actively managed exchange traded funds (Active ETFs). The article has been written by Roger Nusbaum, AdvisorShares ETF Strategist. We are not receiving compensation for this article, and have no business relationship with any company whose stock is mentioned in this article.