Quote from: paxmao on March 17, 2021, 12:23:25 AM

If you are not "rich", that is, you work hard for money a manage to save just some, perhaps nothing from month to month, you should be thinking about how to make sure you can live when old without being a burden for you family or having financial difficulties. If you holdled bitcoin since 10 years ago, you do not need to read any further, just enjoy. For the rest, here are some planning tips.

This is particularly important for Millenials (see graph below), as the rates of return for savings and investments are thought to be in decline.

However, you also want to life a good life - there is only one (unless you are Buddhist) - and you probably want to do things that require money. Striking a balance between these two is a little bit of an art.

How much do you need to saver? Too difficult to say in general. Some speakers and authors will tell you that it should be around 10% of your income, but if you earn little you may not be able to or if you want to retire very early you may need to do some extra effort.

First thing to be clear, you can separate into bags or pots but in reality all your money is the same. Just use this as mind tool.

b) Decide what is the bare minimun you will need each month or year to retire having the basics: a roof over your head, food in the plate and medical care. This is your retirement minimum bag.

- Figure out how much capital (savings) you would need to obtain that monthly income. (e.g. you need 500 USD and you count on having your house paid). That x12 is what you need in a year (e.g. 12000).

- You should count on getting around 4% of your saving as dividend or rental income. To produce 6000 a year that is: 150.000 USD (that's 6000 / .04). That is your bare survival minimum, so you have to save and invest enough to make sure you have it by the time you think you will retire. Savings and investments for that pot have to be super low risk while allowing you to reach that figure. You may think that you will get a pension and that will take care, but I advise you not to count on that. Just make sure you do not depend on someone else for food.

b) Decide what would be a good level of income that would grant you some travelling, leisure or whatever you would like. Let's say that is 1000 a month on top of you bare minimum. That is you wish bag. You can count for this on pension or other income, just halve what you think would be reasonable (e.g. you expect a state or private pension of 1000 per month, count only with 500).

Now you have to figure out how much you would need for that. Again, at 4% would be (12 month x 1000 = 12.000 a year, so capital should be 12.000 / .04 = 300.000 USD. This may seem like quite a bit of money (it is very personal anyway, people have different incomes).

Since you know your goal, you would now setup your saving strategy, but this time you can take part in more risky (yet higher reward) investments. This should help you reach that apparently high figure if you start saving when young.

c) You moon-shot: If you still are able to save more after your two first bags, you can now have your moonshot bag. You can choose any ammount here, and you will invest this in high risk / high paying investments (e.g. crypto). If this goes well, you will retire early and or rich.

All this requires talking about different investment styles and methods. If there is some interest I will later continue the post with ideas on that.

Just as a hint for Millenials:

What to expect from the typical S&P 500 index fund. Current CAPE is high, meaning that standard returns will not be great during the next 10 years (probably)

20 year investments across different decades:

Well in my experience before when I am employed in a company,what I thought everyday is to support my parents and as I got married we used to think for our children needs,setting it as our first priority.Now that I got resigned from my job to take care of my kids I realized that salary was always been so low and not enough so I need to Help my husband doing online selling.Therefore I realized that the time when I'm single I must have been save something for my self so that I can start my own business and help my growing family as well.

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