I’m pissed off about this article from MSN Money: http://articles.moneycentral.msn.com/Investing/Extra/why-gen-y-might-never-retire.aspx
“But when it’s time to invest, they’re as risk-averse as their Depression-era forefathers. That could prove to be a personal-finance mistake of epic proportions.
It’s overly dramatic to say that investing like a scared rabbit could ruin your life. But it could certainly affect your ability to free yourself of the working world anytime before you draw your last breath.”
I rarely get irrationally angry at news articles, but I just want to say, “F* You, MSN!” Gen Y might never retire, that’s probable, but it wont be because of conservative investing. We will never retire because we’ve never been taught to live lower than our incomes. A majority of us do not understand how or why we should be doing anything except spending every dollar of our paycheck. This article is nothing short of investment fear mongering.
“If you invested $250 a month, or $3,000 a year, in bank deposits yielding 3.7% on average, you’d have $275,000 some 40 years later when you wanted to retire. If you invested the same $250 but earned the 11.67% average of small-company stocks, you’d have $2.6 million.”
I don’t have the skills to debate their math (but I can’t believe their calculation takes into account compounding interest on a bank account versus losing and regaining value of stocks). My thought is, “Why on Earth would I need 2.6 million dollars?” 275k seems like more than enough to reasonably sustain a person. Just don’t go spending 150 dollars every week at the grocery store. Really, though, what are y’all going to be doing during retirement that you’ll need millions of dollars for?
I’m not totally conservative with my 403b retirement, but I’m not 70% stocks as this article says. I’d rather be moderate and smart with my investing; investing more in things like “lendingclub.com” or with a local credit union where my money invests directly in my community. Its more rewarding personally and I’m not guilty of committing a deadly sin. Greed and dreams of ammassing millions of dollars on Wall Street is exactly why our economy is in the shitter right now.
/rant
I agree with you man. I actually wouldn’t mind owning stock in a company I believed in. Buy it if it was low enough and hold onto it. Mainly because I feel like some companies are due. But yeah I’m with you on saving a little every month. That would be a nice rainy day fund or retirement. Kind of why I never keep change on me, I’d rather put it in a jar for 6 months or more and get more from it.
If anyone is going to invest in something right now, it should be a mutual fund that trades in energy stocks. We’re at an incredibly low point right now and as soon as the demand for energy increases we’re going to see a HUGE jump in prices again.
I take back what I said in the post. I’m not actually as conservative as I wanted you to believe. I think I’m split 60/40 with stocks and bonds. And the 60% stocks are split again 30/20 of big name company stocks and an “energy services” fund.