In today’s day and age, the average lifespan of humans is increasing steadily. Medical discoveries are made every day, allowing people to live long, healthy lives. The downside? People may begin to outlive their retirement savings. Investing after your retirement is the solution.
If you're a person who has just retired, outliving your savings may be a fear of yours. Or, maybe you just want to continue investing your money because you enjoy it.
Whatever the reason may be, if you want to continue, or even start investing, I have some tips that will help you make the process easier.
What's your Investing IQ?
See how you stack up against other investors.Pay Off All Bad Debt
First, it is crucial that you pay off all bad debt.
Pay off that high-interest rate credit card. Downsize your house to something better suited for your lifestyle. Can you get out of a home mortgage and move to a smaller space?
Consider a retirement community. Most retirement villages are affordable and come equipped with all kinds of activities. I’ve seen plenty of communities with pools, golf courses, tennis courts, you name it.
Paying off bad debt will dramatically increase the amount of money you have to invest and reduce your monthly costs by a landslide.
Start Small & Get Smart
Next, start small and get familiar with what you understand.
I always say how important it is to understand the businesses you are buying before you invest. Do some research. What stocks are in the market that you already know something about?
Become an expert in an area you are interested in. This way, you will make more informed choices when it comes to investing based off of your insider knowledge.
Stick to Rule One
Lastly, stick to the Rule #1 investing strategy.
Focus on staying in a cash environment or a short-term bond environment with a chunk of your capital. Wait for one of the companies on your watchlist to go on sale as a result of some kind of event that happens in the stock market.
The most obvious event that occurs in the stock market is regular crashing. The market is a cycle of highs and lows. Because the last drop was in 2009, I believe we are in for another crash soon.
When that time comes, if you’re in a cash environment, you will be able to buy great companies on sale. Oftentimes, three or four years later these companies will have doubled in price.
That is how you get great returns with low risk in retirement.
Before we wrap up, I’d like to know - if you have already retired, how have you worked around the savings that you started with?
Leave a comment below and I’ll be sure to follow up with you.
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