Money: The Retirement Pyramid
28 Aug 2018
The Retirement Pyramid is a nifty little graphic I came across recently which I have adapted. I think it is self-explanatory but if there is anything you disagree with or don’t understand, get in touch and we’ll have a chat -
I can make a couple of suggestions by way of explanation:
- How do you avoid ‘permanent loss of capital’? Answer: By diversifying. Simple as that. If you are prepared to lose some of your capital permanently then it is fine to concentrate your investments. There is an adviser in Christchurch who has some of his clients with 70% of their investments in one company, The a2 Milk Company. Haven ‘t they done well. Care to try it?
- How do you avoid ‘financial salespeople’? Answer: Look for an independent adviser, someone who not only emphasises the advice side but who also does not sell their own company’s investment products. You will know that a financial adviser emphasises the advice side if they make you pay for that advice separate to getting them to manage your investments. If you are not prepared to pay for your advice you are down-grading the most important step. The advice you get should stand on its own, independent of investment management. It makes good sense.
Keep asking great questions …
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P.S. Disclosure - we use Dimensional Fund Advisors as one of our key fund managers and we include small company and value company allocations in our client portfolios.