Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Friday, April 20, 2012

Gen X Retirement Woes?

Is Steve on the road to retirement?
Headline from recent article by Jessica Rao: "Retirement May Be Mission Impossible for Gen X."  Ms. Rao talks about stock market crashes, worries over Social Security, housing problems, and a resulting general skepticism among those in the 30- to 45-year-old age bracket.  Most readers would likely say "yup," nod, and move on - there's nothing to see here.

But let's back up for a minute.  The big thing about retirement is socking money away.  For this purpose, much of the Gen X generation has arguably been in an excellent position.  They have user-friendly investment vehicles like low-cost exchange traded funds.  They have qualified plans like 401(k)s and access to all kinds of investment information.  They have control over their own investments (isn't this what the proponents of privatizing Social Security get in a tizzy over?).  And best of all, those in the 30- to 45-year-old Gen X grouping have had opportunities to invest at rock bottom sale prices.  Crashes are great for asset accumulators!!!!!!!!

For example, on 6/30/2008 SPY ( S&P 500 Index Fund ETF) and AGG (Barclay's Aggregate Bond Market Index) were priced at $118.47 and $86.98, respectively.  Today they are at $137.72 and $110.46.  Gen Xers were in perfect position to take advantage.

Furthermore, Gen Xers have well-written instruction books available on how to invest and create a financially secure retirement.  Two excellent examples that I recommend are:
  • I Will Teach You to Be Rich - Ramit Sethi
  • Millionaire Teacher:  The Nine Rules of Wealth You Should Have Learned in School -      Andrew Hallam
Granted there are life events that can overcome even the best thought-out approaches.  These include sicknesses, job losses, buying way more house than one needs at the peak of the market, etc.  Aside from these, which people face to some degree over every time frame, Gen Xers who have kept their job (and by far most have!) and haven't bought into the "woe is me" camp should be well on their way towards securing a nice nest egg and hence retirement.  On the other hand, if they spend their life as a worry wart, fed by negative media reports, then they'll play into the self-reinforcing behavior implied by the article mentioned above.


  1. When haven't there been problems with the country and the economy? They've existed since the country was founded. Yet the savers and accumulators if they are willing to take some risk (60/40 stocks/bonds) will watch their portfolios grow tremendously over a 40 to 50 year time horizon.

    1. True...but not easy to get people to understand.

  2. All it takes is some discipline. It is ludicrous how entitled people have become. They want to live like kings today and just have their retirement magically assured for decades. So you have to save a bit of what you earn every year. You sit in a heated, air-conditioned house with indoor plumbing, high tech gadgets to give you entertainment, communication and education options, you have all sorts of food a short car ride away... and still whine that it is unfair.

    Look the 1960's in the USA were about the richest any median society has even been in the history of humanity. The USA had so much wealth partially because we were able to make a fortune selling to the world and had no significant competition (the recovery from WWII was not complete). Thinking that everyone should be able to live anything close the the richest few decades in the history of the world is crazy.

    Extended life spans make saving for retirement more difficult. The hugely broken health care system that the special interests have prevented progress on for decades is a huge problem.

    The bottom line is you have to save money each year. Americans in general are too spoiled to do so. There is no fairy god mother that will be able to wave a magic wand and let people live lavishly beyond there means and continue to do so in retirement. Just grow up and stop expecting the world to treat you like a prince.

    Stock market decline actually help those that are still in the savings portion of their life. Those that are living on the savings are the ones that are hurt. You are exactly right. I increased my contributions to my 401(k) after the collapses in 2008. This made sense on 2 levels. First the anticipated investment returns for the last few decades had problem been too high (therefore more savings needed). Second, you buy low and sell high.