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Home of The Crash Proof Principle

April 7, 2017

When Working with Financial Advisors, Always Get it in Writing

One thing I continually tell my clients is that opinions from financial professionals aren’t worth much unless they’re put in writing with the professional’s signature and company letterhead. Anyone can give a verbal opinion, but unless they’re willing to back it up in writing, verbal opinions can become just vague memories or “words in the wind” over time. It’s harder to claim misunderstanding or miscommunication with words on paper. Any licensed professional is going to be 100% sure they believe in that opinion before they write it down and sign their name to it, because their reputations, licenses, and certifications are on the line.

July 6, 2015

Expanding on the Cardinal Rule of Retirement Investing!

The Rule of 100 is an age-old rule of thumb in investing. It is used to establish a limit to the amount of risk you are exposed to in retirement, protecting your financial wellbeing from the potentially crippling volatility of the market.

The Rule of 100 is a simple mathematical formula.

You simply take 100 and subtract your age. The resulting number is the maximum percentage of your portfolio that should be subject to the uncertainties of the market.

In the example of a 70-year-old retiree: 100 minus 70 = 30

This investor should have no more than 30% of their life’s savings at the mercy of the markets.

The Rule of 100 has long been recognized within the investment community for its sound logic. As you age and get closer to being dependent on your retirement nest egg, the less of it you can afford to lose with risky securities investments like stocks, bonds and mutual funds.

The Rule of 100 was created to protect you, the everyday investor, who otherwise may not appreciate how vital it is to reduce risk as you get closer to enjoying the fruits of your lifetime of labor.

Unfortunately, although this rule is one of the most commonly acknowledged investment principles, it is also one of the most frequently broken in investing. Financial advisors within the securities industry are trained to recommend risk; therefore they are not equipped with the knowledge of how to truly shield you in retired years. Rather, most advisors prefer to keep clients exposed to the hazards of the market, because that is how they make a living.

A Crash Proof Retirement follows the rule of 100, and then some. When you are in or near retirement, you need to ensure that you are protecting the savings you need to carry you for the rest of your life. This requires a more intricate breakdown of your portfolio and finding the exact percentage of your assets to be placed in a safe haven.

To protect your assets, you need guarantees and not just hope, which is all that securities can offer. Those guarantees do exist in fixed class investments, which offer appealing asset growth without fees or loss of principal.

Knowing the exact percentage of your nest egg that belongs in fixed class investments is essential to achieving a truly Crash Proof Retirement, which can map out the rest of your years with guarantees, and not just the hopes that come with rolling the dice on the stock market.