At a very young age, two people committed to a socioeconomic partnership that would see one party generating a fixed income while, the other tries to build a business (non-fixed income) to off-set inflation and generate investment (non-work) income for the foreseeable future. A retirement plan must start when you are young. 20-30 years old. Youth is wasted on the young. So, many youngsters do not take the advice offer to them. A young couple planning a family is best served by one of them in stable fixed income employment and the other with time prioritized to guide the children, maintain the home and grow a young business, hence one income to pay the family’s current bills and the other willing to be present for the family’s future.With both parties in fixed income employment, their time is first and foremost for their employers and the family will suffer. Children left to bring up children will not benefit the future of the family. Two fixed income salaries will never equal twice the savings hence funds that are for the future will not be managed well. Capital losses on the stock exchange are far out of your control but capital invested in real estate or trade inventory you can physically see and touch anytime. Invest in the family.
30-40 years old. The self-learning period is a time of sacrifice. Many families have by now been formed into a unit, one or two words can be used to refer to all the individuals in the family, and their financial portfolio is interrelated, house, furniture and fixtures, car and a mixed of stock and bonds for educational purposes and some cash deposits for emergencies. Loans for house and car repairs or other unplanned but essential expenditures with eat away savings. On the other hand, by now your business will have name recognition and customer loyalty, meaning that the establish business can stand on its own, not needing any further capital injection.
40-50 years old. This period is to generate enough money for retirement. The children, by now, may be educated and employed and it is time to look out for yourself. A good employer may have encouraged you to participate in a pension plan, Government’s social programs may also add to your retirement benefits but add up your current lifestyle expenses and multiply it by an average yearly inflation rate over thirty 30 years, add estimated health cost and determine is it enough. The business however, continues to grow, more customers more profits and now annual dividends.
50-60 years old. Still strong and healthy and may consider early retirement. The business is presently able to pay the family’s expenses and offer you more free time. The pension from your employer’s plan can be re-invested into instruments you feel will best serve your plans, such as bonds and treasury bills. Most importantly, the business may be able to provide health insurance and other tax benefits that can put your mind at ease.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
