I’ve seen deep dives into pressing conundrums like retirement (i.e., bridging the enormous gaps that so many inadequately prepared investors are forced to confront) that did not avail. You don’t necessarily receive a reward for getting through the wonkery. In contrast, I often find valuable takeaways from several regular writers on Seeking Alpha, and today’s brief article is intended to illustrate that.
We start with Roger Nusbaum. He’s got a great article out today, and I noted that he used the word “obvious” – apologetically – four times in this article. It is as though he is seeking forgiveness for stating something that really need not be stated. In my experience, it is precisely those things that are most important to restate. People need to hear what is obvious… until they finally get it. And while it’s possible to think – what am I contributing by writing something that is obvious? – the reality is that there is enormous value in applying principles and high-level thinking to on-the-ground implementation. That is genuine expertise in action.
One of Nusbaum’s obvious points is that keeping physically active and mentally engaged preserves one’s health and saves money. Obvious? Sure. Yet people don’t follow this advice, though they are far more apt to do so when they internalize what he has brought down in very practical dollars-and-cents terms. If the average person spends $275,000 on healthcare expenses in retirement, as he points out, then an investment in good health can play a huge role in making one’s retirement numbers work out.
I myself have recently made this investment. Though I had been doing a modest six-minute work-out on a daily basis, I have recently taken the big step of resuming a much more vigorous and time-consuming once-weekly workout of the sort I used to do 30 years ago. It felt weird at first – at my age – until it started feeling really smart.
A second “obvious” idea Nusbaum discusses is the benefit of setting up “multiple streams of income.” Read Nusbaum’s entire article here for his obvious (and one very non-obvious) ideas, but I’m going to transition to a link to one of our regular commenters on this forum – hawkeyec – because the comment he made on yesterday’s post is an example of the successful implementation and consequent peace of mind of this strategy. You must read the comment in its entirety, but this tiny snippet will give you an idea of the benefits that accrue to the few who actually do the obvious:
The point is this arrangement is like getting six paychecks every month. Five of these will stay until we are both gone...In the meantime we don't worry about the market going up or down, whether we can take out 4% this year, blah, blah.”
Ronald Surz, another must-read SA author, offers a brief and simple guide for 401(k) plan participants, including a number of obvious points. He suggests saving 15% of one’s pay, applying the 4% rule and steering clear of the “retirement risk zone” that spans the five to ten years before and after retirement. But just like Nusbaum and hawkeyec, the advice he gives qualifies as expert advice – taking high level knowledge and bringing it down in a useable way. Ron has got an enviable publication history – if he’s not an expert, no one is. What’s unique is his ability to communicate his knowledge in a clear and practicable way.
Please share your thoughts on this in our comments section. Meanwhile, below please find links to other advisor-related content on today’s Seeking Alpha.
- Douglas Tengdin, CFA: Have we learned anything from the financial crisis 10 years ago?
- Erik Conley continues his series on navigating bear market crises.
- Jeff Miller’s Stock Exchange panel confront macro headwinds using a “blended approach.”
- Janus Henderson Investors’ Bill Gross, Myron Scholes and Alex Crooke discuss demographics.
For more content geared to FAs, visit the Financial Advisor Center.