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January 20, 2011


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No matter how many get rich quick schemes come out of the wood work, the slow and steady savings approach will always have the highest probability of working...

After all when we shoot for the moon, most of us fall short because it's such a long shot...

I started saving for retirement at age 23 when I got my first full time job. Theoretically I should have plenty of money when I reach retirement age, but there is certainly no guarantee.

It's a bit discouraging to think about the flat markets for the past 10 years. It seems like perhaps that creates an investing opportunity over the next 10 or 20 years, but then again, maybe not.

All you can do is save and hope.

I think luck has something to do with it too because my portfolio sure has been hit by some cruddy market downturns (as have everyone else's).

Everday Tips - Certainly, but make sure "slow and steady" applies to your investing philosophy as well. Luck in the market is the most important when you're about to/just retire(d). But as funds like the Vanguard Target Retirement 2015 show (which is 60% stocks/40% bonds) have showed, for those who didnt change their investing philosophy and suddenly sold low, their portofolios have completely recovered back to the market highs. Someone who is 90%stock/10% bond has not fully recovered, but this is a portfolio for someone still building their assets and still has a lot of time.

So just as slow and steady saving is important when you are young, once you've built your assets having a "slow and steady" investing philosphy is the key. All the people I read about whose retirements were ruined by the market crash by definition were not "slow and steady" in their actions (either their initial investment philosophies or their reaction to the market drop were not based on slow and steady).

someone has already said that a LOOONG time ago...Steady plodding brings prosperity; hasty speculation brings poverty”. (Proverbs 21:5, TLB). :-)

What if the dollar collapses? And all our dollars in our IRAs and 401Ks are not worth a thing? Hmm, maybe I just worry too much.

Unless you are incredibly wealthy, far too wealthy to be concerned with reading these PF blogs, it is not worthwhile to significantly diversify your holdings into different currencies. When I say significantly I mean less than 50% of your total assets are in USD and physically located within the United States of America. Although I suppose if you have deep cultural ties to a foreign nation that may not be too uncommon(I'm American born Taiwanese and a lot of family friends own property in Taiwan).

Brian, you worry too much. But if you are concerned about the future of the USD vs other currencies then you can hedge by having a % of your retirement in foreign assets and a % in large multinational US companies. If the dollar goes down the large US companies that sell a lot of stuff overseas will do very well. Cheap dollars mean our exports are cheaper which boosts the performance of large US companies and fuels more US job growth.

What will our houses and land that we own in the US be worth if the US dollar collapses or in hyperinflation?

@Brian: the less the dollar is worth, the more dollars your land/401k will be worth, as their intrinsic value stays the same. Unless you're holding cash or long-term bonds, who cares? Hyperinflation would be a chaotic period like late 2008 where valuations temporarily dip. Don't sweat it. Preserve your health.

I started at 22 w/ investing/saving over 10%+ of my check, increased to 15%+ by age 23 1/2 and 20%~ by age 27. Those today who invest will mimic the investors who continued throgh ("the death of equities") times of 70s and earlky 80s RICH! I retired at 47 w/$2.85M when I stared afer college w/ no debt, 2 old (11+ years old) cars and $1.5K saved by graduation w/ BS in 1982. Crash of '87, Gulf war market drop, recession of 92-93 and high unemployemnt (including me!) , the dive of 2000, equities crash of late 2001, crash of 2008, yep, still here, financilly independent and worth every penny!The turtle always beats the rabbit.If your not confident PAY a financial planner the comission or fees but, even the "poorest" (there are no "poor" w/cellphones, cable tv, cars, etc., in America today) can START w/ 5% or more likely 10% and the middle class should have NO problem saving investing 15-20%. It's time to do what's right and what's REALLY worth it for your future and some small sacrifices-like the cable tv, thermostat at 70'F+, cell phone extended plans, data plans, premium gas, etc.,....

I was reading an article on MSN Moneycentral and this guy wanted to make 401k contributions mandatory.

I just think it is regrettable that people don't take retirement seriously. I mean I want to live far below my means so I can retire as early as possible, and I don't see why people don't take retirement seriously. I mean, you grow up for 1/4 or your life, you work for 3/8 and you have to be able to afford the other 3/8ths. I don't mean to use difficult numbers but I mean you really don't work for that huge of a chunk of your life, unless you don't take it seriously.

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