I have written two posts on blogging since starting this Blog on 1st April 2008. Both were very popular. I also know that many Baby Boomers are interested in Blogging for themselves. It might be just for interest or in the hope of making a residual income. But there is a high level of interest there.

So how am I doing after almost 4 mouths and how do I feel about it? Read the rest of this entry »

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A friend of mine has emailed me his WRAP account Mutual Fund returns for 2008.

My friend had all his retirement nest egg in a WRAP account until recently. It is one of the top fund mangers in Australia. When the market started going crazy in January he became very risk averse as he watched his money disappear. It affected all assets in his WRAP account.

So in February he decided to redeem what he could for minimum loss and ride out the stock market volatility with the rest and hoped to reduce his exposure to equities if the market bounced.

He had a 50/50 balanced portfolio and so pulled out the 50% of his nest egg he had in fixed interest and cash. This is now safely earning 8% interest in term deposits. He’s thankful for that as he now has $21,343.05 in 5 months worth of interest on that money. The rest has been left to the ravages of the markets. Read the rest of this entry »

There, I’ve admitted it - I’m guilty as charged. As a Baby Boomer I am highly risk averse. The truth is I was risk averse before I was classified as a Baby Boomer too. I’ve always been that way. But there seems to be some stigma attached to it. It is as if I am sub-human because I don’t want to take unnecessary risks with my retirement nest egg.

Making me feel guilty because I don’t want to put a large percentage of my nest egg into risk-based assets and hold on, is one of they ways the wealth management industry tries to get me to do just that.

My wife says I’m too quick to sell. But wasn’t it Rothschild who said when asked how he made his fortune, he always bought too late and sold too early. I’d say that is the trait of a risk averse person like me.

We’ve all read plenty of news copy, written mostly by the wealth management industry, that we need to have anywhere from 30% to 70% of our money in risky equities in retirement, or we won’t have enough money to live on for the next 30 years. How do they know? For 16 years until the 80’s the market went sideways at best and inflation was high but stocks did not compensate for it then. Read the rest of this entry »

Here is my latest bates retirement income strategy model #2. You can check out retirement income strategy model #1 and compare them.

As I learn more from my research I find the picture of what I need to do becomes clearer. So I have decided to revise my model and it is shown below.

This is what I think will work for me. It may not suit all Baby Boomers but I find simple diagrams and pictures give me a better understanding of what I need to achieve.

(A large diagram is displayed later in the Post)

Read the rest of this entry »

I don’t think the message is getting through to financial planners any more than it is getting through to bay boomers. That message is Baby Boomers have to observer and respect Rule #1 - Avoid Large Losses in Retirement.

Chasing high returns by having a high proportion of your money invested in equities (risk-based assets) makes no sense when you are in retirement and especially in this market. I’m talking here only about money set aside to be your nest egg. If you have done that and have surplus money then be my guest, try and make a killing in this market using the surplus money.

Remember it is not the fact that the market is down that is the problem. It is the size of the losses you incur and the time it takes to recover those losses that will affect you directly, especially when you are not adding to your nest egg but taking from it in the form of a pension.

Many Baby Boomers have realised this and are moving their money out of risk based assets into safe assets like bonds, term deposits and cash at the bank. This would seem the logical thing to do for the immediate future. Read the rest of this entry »

We are all concerned about the banks and how secure they are. Mr Paulson said the banks are 99% secure but is going to extraordinary lengths to ensure they have access to tax payers money. He and the FED are manufacturing money to keep all the bankers employed, I mean keep the markets liquid and prevent a complete mortgage collapse.

With the new rules on short selling on selected stocks it appears the professional money is jumping back into the market and we are on target for a mini-rally or another bounce.

Either way it might be a good idea to take a serious look at your equity funds, ETF’s and stock holdings in your portfolio and make some decisions.

Read the rest of this entry »