Are you an older investor staring retirement in the face and you know your behind on savings for you golden years. Sometimes you feel so overwhelmed you want to just give up and say I will work till I die. You are not alone someday’s i just want to say the hell with it, i’ll just buy that sports car i’ve always wanted, but thank god i have a good wife that always pulls me back.
I have made many mistakes throughout my financial life it seems like a miracle that i would even be able to retire. I like so many others had hopes of early retirement then came 2000 that was a hard blow but i kept going each week money went into my 401k over the next few years hope filled my world, i would say maybe this time just maybe this time. Then the market slapped me in the face again 2008. I felt like I could not catch a break, i said to myself that’s it NO MORE and for two years I licked my wounds and did nothing. Then one day I looked at my wife and realized this was not just about me but about her to. I had to do my best to provide for her and make sure her future would be secure, so I quit feeling sorry for myself and got back into the game.
What i hope to achieve with this article(other than show i am not an english major) is to encourage everyone, that are in my situation not to throw in the towel. so many people my age(58) just think it is useless and have given up or are just scared to make a mistake. So many times I have tried to talk to people my age about saving for retirement and i get the same ole pat answer “ its to late or what invest in the stock market I don’t gamble with my money”. Lord I get a headache everytime i hear those words. I try to tell them it is not gambling to invest in some of the best and most secure companies in the world such as PG, JNJ and pep.
let’s go back to 2010 and i was just coming out of my pity party of the last two years and finally looked at my investment accounts and the tears flowed i had lost 40 percent of what i had. I knew then that I had to change almost everything about the way I thought about investing. I had always in the past invested in mutual funds thinking the diversification would protect me in case of a bear market boy was i wrong. So I began looking at different investing strategies. I needed one that even in a brutal market downturn that we had just experience i would be able to stay calm and know everything was on track. So after looking at several different strategies and spending a few dollars on investment newsletters I finally found it i would go with a dividend strategy. I knew with investing this way that I found myself almost wanting the market to go down so that the money and the dividends that i was reinvesting would go so much farther.
My plan was very simple invest in great companies with a history of increasing dividends easy right, not always even with a plan this simple there are always stumbles along the way to name two KMI and GE nobody is perfect. I still carried on even with minor setbacks I saw major progress. We set a budget and stuck to it, i think without a budget we would have never made it, it was not a rice and beans budget but very strict. Our goal was to save 30% of our gross income and most years we achieved that. At the beginning we only had roughly 87,500 in retirement savings and now we are just under 300,000. I know to a lot of readers this seems like a small amount of money to have saved but we are not professionals and we have a very modest income.
As i said before i wanted to turn away from mutual funds as much as possible, so we directed most of our savings away from our 401k’s. The main reason was we were so limited in our options at both our 401k’s we both already had regular ira’s but i loved the idea of tax free money in retirement so we also opened up roth’s for both of us. We did our best each and every month to make sure we paid ourselves first. If there was one thing i wish someone had taught me when i was young was this little phrase “ pay yourself first” those three words are so powerful why work for everyone else and not for yourself it is so simple when you think about it. You pay the power company the grocery store and everyone else but you completely forget about the most important one yourself. There were times when we could not always max out our accounts, there are always unforeseen things that can stop your progress and with those unforeseen obstacles i was taught a very valuable lesson. I was so focused on putting money into our stocks each month i forgot lesson number one an emergency fund, sometimes i am not the sharpest knife in the draw, but i learned and corrected that mistake and i have always tried to maintain a three month emergency fund so not to interrupt my investments.
Admitting one’s mistakes is a hard thing to do but, by doing so I hope I can help someone understand no path is completely straight but as long as you have a goal and never give up there could be great rewards,because what your planning for is often bigger than just yourself it could be for your families future security. I remember watching youtube one day and watched a video on how many older women are living in poverty it really scared me it proved to be a great motivator in my quest for financial security because I did not want my wife to fall into this category.
So one day we sat down and laid out our budget and as we went through it we found a lot of things we were spending money on that was unnecessary and quickly corrected our bad behavior. My wife jumped on board 100% if we had not worked as a team we would have failed both you and your partner must be on the same page for this to work.
We knew we had only a limited amount of time to accomplish what we need to do, so we were somewhat conservative with our investments. It leans heavily towards reits, utilities, and consumer staples. I have chosen to invest in individual stocks instead of etf’s there is nothing wrong with etf’s there are some excellent ones SPHD and SCHD to name two but to keep me focused on my goals and to make it more interesting I choose to invest in individual stocks.
I have read the average retirement savings for a 60 year old is 163,577. Whether you have more or less do not get discouraged keep looking for ways to achieve your goal, so many people think saving for retirement should be pain free or just plain easy i am here to say it is not. There is a lot of compromise that will come your way if you hope to achieve your goals, whether you hang on to that automobile a couple years longer than you want to or not get the newest gadget that everyone else has or maybe put off that vacation till you can pay cash for it. If you want your family prepared you have to think about tomorrow not just today make your money work as hard as you do buy assets that over time will appreciate not depreciate. Sometimes it may seem impossible, and yes i to sometimes just want to give up but i have to remember the bigger picture on what kind of life i want for my family as we grow older do i want one of worry or one of calm and security. No one knows the future but you can plan for the unforeseen by just putting a little bit of your hard earned money to work for you, don’t you deserve to enjoy your money more than everyone else remember “ pay yourself first”.
I want to thank everyone for reading my first article i am not a professional writer, I am sure you already figured that one out. I hope in later articles to go deeper into our budget and keep you informed on any new stock purchases. I hope everyone has a good week
Disclosure: I am/we are long PEP, JNJ, PG.