Your Vitally Important Retirement Plan

July 29, 2015
Does the Ideal Retirement Portfolio Look Like?

It is vitally important to have at least a portion of your retirement savings growing faster than the rate of inflation, because this allows you to increase your purchasing power over time.

It is vitally important that:

1. You study the ancient writings of stock market performance to fully understand the future of stock market performance, even though, as we all know all too well, past performance is not necessarily indicative of future performance.
2. You believe your investments will always grow faster than inflation. Failure to do so, especially if your heresy becomes widespread, will virtually assure that they can't.
3. Your investments actually do grow faster than inflation over the long-term, using our country's free lunch perpetual motion debt-based prosperity machine.
4. You did the bulk of your investing between 1982 and 2000. Trust me on this. It will make things a lot easier.
5. You no longer embrace safety. With so many years of ZIRP under our belts, you must swing for the fences to have any hope at all. Compound interest, once the pride and joy of a well balanced portfolio, is now considered only for schmucks.
6. You were born in the United States. If you were born in Zimbabwe, for example, some wealthy U.S. dentist might shoot your most profitable lion just for sport. That will make it very hard for your investments to keep up with inflation. That's especially true if your country has struggled with inflation in the past. For example, Zimbabwe.
7. You diversify your portfolio to include all the very best growth stocks, such as Twitter and Yelp (down 15% and 25% respectively today).
8. You spend more time on your certified financial planner's yacht. If you dangle enough dollars every now and then, and if you negotiate properly, he should offer at least one weekend per year to schmooze you. Not doing so is just money down the drain. You paid for some of that yacht. You know it. He knows it. You should enjoy it too. Think of it as a floating timeshare. Also consider visiting his kids at Yale if the markets head south. You might be able to guilt one of them into buying you a dinner.