Monday, September 8, 2014


Now that I am getting to be an older lady with wrinkly elbows, I'm starting to think about retiring.  As in: it might be nice to do it someday.  Preferably before I die.

I have always been more of a saver than a spender, so I have a few dollars tucked away in a savings account.  I finally came to the conclusion that I'd better do more with said dollars than let them slowly melt away under the hot glare of inflation.  I mean, yes, I do earn a paltry point or two of interest in this savings account, but it's not going to be sufficient for me to retire prior to death, which really is my strong preference.

Over the years, I've gone through bouts of enthusiasm during which I research the world of finance.  I have read books, websites, and been lectured at length by my step-dad.  However, just about the time I was feeling ready to put a toe in the financial waters, BOOM the 2008 crash happened.  LOL, nope!

I investigated the possibility of buying real estate.  I don't want to flip properties, so I was considering being a landlady.  Having heard some tenant-from-hell horror stories, I thought it would be best to do it through a management company.  Then, having further investigated and heard some management company horror stories, I gave up on the idea entirely.

In the end what convinced me to proceed with investing was learning that stocks, collectively, and historically, go up an average of 10% per year.  Therefore, unless something drastic changes, it makes sense to invest in a well-diversified mutual fund(s) and/or index fund(s) because in the long run they will beat the snot out of even the most generous "high-interest" savings account.  The thing is to just be brave, shove the money in there, and not even look at the numbers for 20+ years or so.  The daily ups and downs won't matter in the long run.

I am super-proud of myself for figuring out how to set up an online trading account through my bank (not a simple procedure) and starting to use it.  I had a lot of help from Investopedia.  For example, if you have to figure out what a currency-hedged ETF is, that's the place to start searching.

Not this kind of hedge:

Or this kind of hedge:

But this kind of hedge.

I completed my first transaction last week.  I'm still trying to figure out the well-designed but necessarily super-complicated website.  I'm keeping it as simple as I can, for now.  I'm pretty sure it's better than spending all my cash on lottery tickets, is all I can say for sure.


LL Cool Joe said...

Unless you win the lottery! I know nothing about finance, so anything you do or say sounds impressive to me!

DarcKnyt said...

I'm one of those ignorami who will lament and wail when they can't retire until well AFTER death, because I have the exact polar OPPOSITE of a Midas Touch with money. I have lost more than I've earned I suspect trying to be "wise" and "invest."

So, I know you're going to be EXTRA fine and dandy, because you're much smarter than I am, and pick things up quickly. Also, good advice from money-wise elders and relations helps. I have neither. :)

Good hunting and I hope you retire extremely rich! :)

Warped Mind of Ron said...

I invest all my money in Bacon Stocks and anti-squirrel security system funds... I'm sure it will pay off one day!!

Ginny said...

I have a 401K but kind of let someone else shuffle my money around. I would like to invest in stocks beyond that but have no clue where to start. It's very scary to me not knowing where to begin really.

Sparkling Red said...

Joey: I do participate in the office lottery pool, because it would be just my luck to be the only one who doesn't get to quit and be a millionaire the one time I don't bother to play.

DarcKnyt: Thanks for the encouragement! Investing is a gamble, but Not Investing is also a gamble, so I decided that I might as well be in it to win it.

Ron: Bacon seems like a solid commodity. The anti-squirrel industry... well, I'm no expert, but you may want to re-think that sector of your portfolio.

Ginny: It's definitely an extremely intimidating field. Even Investopedia (my favourite online resource for money stuff) defines their jargon by using more jargon. I had to force myself to sit down and wade through it all at the beginning, and I still feel like I'm only just graduated from financial kindergarten.

Jenny Woolf said...

This chimes in with what I have been thinking about lately. It's all done differently here, with umbrellas that will shelter funds that are tax free up to a certain amount, etc. . It is sort of scary venturing out there though, isn't it. You're really brave!

G. B. Miller said...

Hey, it's better late than never. Even though I have an involuntary retirement plan at work, I belatedly decided last year to start participating in a deferred comp program. So a little of my check goes into an investment fund tax free.

The advantage to this is when I retire, I can make one big large contribution from my last paycheck when they pay me all of my unused time. Lessen that tax bite big time.

Father Nature's Corner

Lynn said...

I still haven't given up on winning the lottery. I'm in a lottery pool with the pressmen here at the printing company.

But I always did the 401K thing at the corporation I worked for and it's all tucked away. Someone handles it for me (thankfully.) Good luck!

Granny Annie said...

I live in casino land. There are over 50 casinos within a 100 mile radius of my home and a great majority of the people around here consider that their retirement best bet. So far two of my acquaintances in town have already lost their homes to their gambling habits.

Sparkling Red said...

Jenny: Thanks! I feel brave.

G. B.: Every little bit helps, for sure. Especially with compound interest. ;-)

Lynn: I did know one fellow who won $250K in the lottery. He used it to start his own business. So luck occasionally wins!

Granny Annie: Oh, that's not good. I have a friend who plays a lot of bingo, but she's too sensible to bet her retirement on it. Heck - she won $10K last week, so she may be doing okay with it.