Monday, April 13, 2009

Planning for retirement?

Call me an idiot, or a day dreamer. But I started planning on my retirement during my last year in college (university).

Seriously, is it ever too early for one to plan for his/her retirement? Should you start planning when you're well into your 40's? Or does it matter that an 18-year-old might have the wits to start his planning early? I have always had one thing in mind - to be financially free. I for one, do not like looking at price tags when I buy things. Also, I like building the blue prints of a beach-side house in my mind, in hope that it'll finally be standing where I wished it to. Since the day I realised that, I started pouring through books, internet articles, Buffet's advices for dummies, on - Stock Investment.

Stock investment, is the one logic path which I believe with enough education and practice, not to mention will power and determination, will allow any man (or lady of course) to achieve greatness, and to have the grand prize - Retirement beyond their wildest dreams, be it when they're 60, or even 21. Isn't it great that somehow, the government has not set a minimum age for retirement?

In order to be great in Stock Investment, there are a couple of attitudes which I personally believe one should first get out of his system.

1. One who is skeptical that, to earn more, you have to invest first.
By saying "pouring through", I have bought books on investment strategies, spent nights in front of the pc reading up on investment advices by gurus, and even signed up for investment courses. Most of these cost me a huge chunk of money, and to be frank, I have still yet to see returns in terms of mulah as I still limit myself to trading paper money. So does this mean all the money spent are down the drain? Well, there are people who tend to have the wrong idea that a good investment means throwing in a paltry buck, and expecting to get back a hundred times that.

Wrong! If you still have that mindset, you should not start trading anytime soon.

The truth is, knowledge is golden. And in this world, you pay for that knowledge. Without enough knowledge to begin with, you'll just be doing a trial and error with your hard earned kachinkos. So why risk that, when instead you could easily try to convince yourself to walk into Borders, and fork out a bit for that very important education first, before jumping in the game with the big boys?

Remember, to be good in investing, you have to start investing first. On books!

2. One who starts his investment today, and expects to get returns the very next day.
For those who have that mindset, I suggest that you do this very simple exercise. Head over to Yahoo! Finance and check out the 1-year chart of the S&P 500. Yeah, it doesn't paint an even near good picture of what you would call investment perks. Check the 2-year chart - Terrible. 5-year - Still pretty much a downward plunge.

Now, try pulling the year all the way to 10, 15 years. Suddenly, you start to see hope. Things are starting to look pretty good. Suddenly, the plunges you saw in those 1-year or 5-year gaps seem to only be a bump in the road. A bump that has historically showed will end up in a steadily upward ascent. It shows that stocks can really help grow your money if you give it enough time.

All in all, I believe that Stock Investment could well be one of the means to a successful retirement plan. It is no where near easy. Reality is, it shouldn't be. If you consider the fact that reaching this very finishing-line means you'll never have to work for another day in your life, that you will have the financial power to do almost anything you want, or to continue investing in an even greater scale. I mean, who're you kidding. Of course it shouldn't be easy.

To note, this applies only for long term stock investments. I do have different approaches and some thoughts for short term tradings, namely on Stock Options. I will write up about that in another article later on.


The hardest step in investment is the first step forward..

Sunday, April 12, 2009

What if you knew your due date ..

Everyday, we trudge through our lives doing what we believe we're responsible to do. We wake up to the morning alarm, we go to work, we laugh at jokes, we settle on a routine.

How often do one ponder by the bedside before turning in for the night?
"Have I said "I love you" to all the people I love today? "
"Have I asked how the day was? (and sincerely wanted to know the answer)"
"Have I pulled that 10th wretched cigarette out of his mouth today?"

It's too short a life to be caught up in the same routine everyday.
It's too short a life to be caught up planning too far ahead for the future and ending up missing what's in front of you today.

Would one be doing what he's doing now, if he gets to know that he has a year left to live?

What would one do, if he gets to know that someone he loves, has only a year left to live?