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Subject:  Re: question for TMFPixy Date:  12/12/2000  7:53 AM
Author:  TMFPixy Number:  26558 of 95755

Greetings, 1poorguy, and welcome. You asked:

I've noticed that most investing columns and philosophies assume a long time horizon (10 or more years). What about the situation where a person is already old, and was only able to save a little until recently? Consider someone in their late 60's, still working (decent salary), has some investments (including IRA's) but not enough, and can't depend on any sort of pension.

Clearly, aggressive investing brings excessive risk (not good for someone looking at retiring in 5 years or so). On the other hand, conservative investing has less reward potential, and likely won't bring sufficient returns in such a short time. It's a Catch-22.

I'm looking for general ideas/thoughts/principles for this kind of situation. Hopefully there are more options than social security! Being a younger person (OK...middle aged...) with at least 20 years ahead of me before I need to tap investment money, I've never given it much thought. I'm planning on a future for me where social security is dead. But I do know two people who approximately fit the above scenario, and I'm sure there are more out there.

The best bet IMHO for the situation you have outlined is for the person to save as much as is humanly possible. Investing should be in those vehicles with which the person is most comfortable.

There is no magic answer to how this person can overcome years of not saving to accumulate rapidly a sizeable portfolio. Compounding takes time, and time is not on the side of someone in their mid-to-late-60's. So the only answer is to save as much and as often as one can.

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