BUZ LIVINGSTON: Avoiding financial stumbles

Published: Sunday, February 23, 2014 at 09:28 AM.

Don’t get me wrong; variable annuities have common threads with toxic dumps. However, older variable annuities can have 3 to 4 percent guaranteed returns on cash value and with no mortality and expense charges. Show me a money market fund with anything close. Plus older annuities don’t use the modern life expectancy table so annuitants receive larger payments.

If I had followed standard confirmation bias operating procedure, I would have blown off the presentation and been a poorer planner for it.  

Young folk, hear me: Each day you delay saving for retirement makes compound interest less effective. Per urban legend, Albert Einstein allegedly said that compound interest was the most powerful thing in the universe.

When I was your age I blew off funding IRAs for multiple years. Don’t work hard but be too lazy to fill out 401(k) paperwork and throw away your employers’ free money. Young people have time on their side. With a 6 percent return, an investment will double in 12 years. Don’t get stressed when the market has a bad day, month or year. You are investing for the next 50 years so avoid worrying about things you can’t control.

Don’t let political views guide investments. Dumping stocks because your guy didn’t get elected doesn’t work. While you spent the last five years arguing over economic policy, the S&P 500 rallied a mere 177 percent. The global economy is mind-numbingly complex. Intricate situations have solutions, simple, clear and wrong (with apologies to H.L.  Menchken).

Often doing nothing, a la Paul Newman, is a pretty cool investment strategy.

Buz Livingston, CFP has a Blue Mountain Beach based fee-only, hourly financial planning and investment management firm. For more information, visit www.livingstonfinancial.net or come by our new office at 2050 Scenic 30A, M1-Unit 230, Redfish Village.

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