1 Answers: Where / How should I invest my retirement money?

Question

I am wondering where and how I should invest my retirement money. There seems to be many options and I was thinking of perhaps buying a property which I could then rent out and live off the rent while I stay in the house which I currently live in and have paid for.

The only problem is if I can’t find someone to lease to, then how can I eat?

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Dan Black 3 months 1 Answer 37 views 0

Answer ( 1 )

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    A good way of making money from your retirement fund is by ensuring that you always keep the principle and you live off the interest.

    Let’s take an example. Say Joe is in search of another investment after he has successfully invested Boeing stocks and made a small profit. A friend who is an investment banker gives him two picks: AT&T or Facebook.

    AT&T offers what we would call a “fat” 6% dividend yield while Facebook doesn’t offer anything. On the other hand, Facebook is projected to increase 30% in the coming year while AT&T’s projections say it will remain in the same price.

    Joe faces a tough decision. It seems as an obvious one, but when looking into it, it becomes harder. Facebook’s projections say it will increase 30% but those are only projections.

    Nothing is for sure. For all we know, Facebook can plummet another 30%.

    AT&T provides a solid 6% of the stock price as the Dividend.

    In this case, what is believed in the investment community is that an older person should invest in the more secure investment while a younger person has the time to risk the capital and take the chance.

    And so as you are investing for your retirement and cannot afford to lose the principle it means you should choose the 6% dividends offered by AT&T.

    Either way, both Capital Gains and Dividends depend on the fortune of the company. Dividends, as the result of the company’s earnings, and Capital Gains, on the investor demand for the stock.

    And so nothing is guaranteed even with the dividend approach. However I recommend looking for those types of safer options for your retirement.

    Best of luck!

    George

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