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Author: Richesnow Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19222  
Subject: Rule Breakers for Retirees Date: 6/11/2000 10:15 AM
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Take a married 72 & 73 year old couple, in good health, whose combined, indexed annuities enable them to live in the manner in which they have always lived: comfortably, and they can usually save $500 per month to invest. The male spouse (with full agreement of his wife)handles all investments: a little over $100,000.

In 15 plus years of retirement, investments were made cautiously and fairly prudently: an array of mutual funds with varying amounts (30-70%)in money markets.

About 2 years ago they decided to take greater risks with the money in order to be able to give (or leave)more to their children. He bought small amounts of common stock in 25 companies, watched them nervously and in a big downturn managed to get out unscathed, but unimproved. Then he learned about THE MOTLEY FOOL.
He took the RB Seminar, along with 2 of his kids. They screened down to 9 RB companies. He picked 4 of those and invested half their money in the 4 and ALL of the rest in mostly high tech stuff.

He's loving it.

Is he crazy?
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Author: hunter431 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4180 of 19222
Subject: Re: Rule Breakers for Retirees Date: 6/11/2000 10:53 AM
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No, he's not crazy. The part I liked best was that you are involving the kids, who are to be beneficiaries of this money. By participating in the learning with you, they are learning to handle the money that you are working to leave for them. Good on ya! There is little point in leaving money to heirs who are unprepared to deal with it. Such people might benefit from trust funds, but that is pretty unsatisfactory from a parent's point of view. As to risk, why not take some risk? The simple fact is that you can afford the loss. Isn't that the best time to take risks?

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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4182 of 19222
Subject: Re: Rule Breakers for Retirees Date: 6/11/2000 11:30 AM
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Take a married 72 & 73 year old couple, in good health, whose combined, indexed annuities enable them to live in the
manner in which they have always lived: comfortably, and they can usually save $500 per month to invest. The male
spouse (with full agreement of his wife)handles all investments: a little over $100,000.

In 15 plus years of retirement, investments were made cautiously and fairly prudently: an array of mutual funds with
varying amounts (30-70%)in money markets.

About 2 years ago they decided to take greater risks with the money in order to be able to give (or leave)more to their
children. He bought small amounts of common stock in 25 companies, watched them nervously and in a big downturn
managed to get out unscathed, but unimproved. Then he learned about THE MOTLEY FOOL.
He took the RB Seminar, along with 2 of his kids. They screened down to 9 RB companies. He picked 4 of those and
invested half their money in the 4 and ALL of the rest in mostly high tech stuff.


Crazy like a fox.

He does not need the money so he can aford risk and he is long term which leans toward stock investments. He is having fun and what better use of your extra money.


He should have an emergency fund and spend some money on extras for himself and wife.

The rest can go into the market.

I think his mistake was 25 stocks and then trying to time the market. He was lucky.

The question is can he hold durning the next market down turn. I might also consider a littlebit of money into an inxed fund even if this is not so much fund. I consider the annuities the bond side of his investments if you are thinking about asset allocation.

If his wife has no interest maybe one or two of the kids can be involved to help but more importantly be able to take over when he wants to devote his time to other efforts.

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Author: Richesnow Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4202 of 19222
Subject: Re: Rule Breakers for Retirees Date: 6/14/2000 11:26 AM
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To Hunter 431 and rjm1, Thanks. I really appreciate the replies.

"I consider the annuities the bond side of his investments if you are thinking about asset allocation."

This comment illustrates the mental adjustment needed in order to escape the conventional (Wise) thinking and resist advice to put everything in safe (read low yield) investments. Real good!

Fool on,
Richesnow


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