Some truths for the individual investor Part 2

In a previous post there was tough love, lets move on to happier things, what are the things that are going well for the individual investor?

Index funds are pretty prevalent and everybody knows about them. Indexing¬† leads to lower fees and fees are the biggest killer of your portfolio. Lower the fees, less the hit. Today’s investor has many more low cost choices available. You can construct a good diversified portfolio with minimal cost yourself without needing a Phd.

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What’s your Retirement Number?

It’s a question we should have an answer to. What’s your retirement number, how much money do you need to live comfortably through retirement.

It’s a complicated question, and scares most people (it scared me :)) But have no fear, Excel to the rescue! You can build a rudimentary model to at least get a good idea of your number. All values in the model are post-tax numbers. Tax effects are for another post!

Some base assumptions:

  • Retirement age is 65
  • Life expectancy is 80

Lets break it down.

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