When it comes to retirement planning, what are your primary investment objectives and how do you go about making your life after work as comfortable as you might wish?
Retirement or no retirement, it’s highly important to ensure that you knew how to establish your primary investment objectives as well as getting it right.
Nowadays, many of the pensioners are struggling with life after retirement because it’s an entirely different life.
Retirement life doesn’t come easy; it’s a life that you will only enjoy if you have properly planned ahead for it. So, are you ready for retirement?
Key factors in retirement planning & primary investment objectives
Most importantly, there 3 main key factors you should consider in your retirement planning. These key factors which include time horizon, cash flow needs and inflation, will have direct impacts on your retirement planning.
What your terminal value objectives should include
Another important thing to consider is to establish a primary objective for your investment or portfolio.
A good and smart way to determine your investment objectives is to define your terminal value objective, which is the amount of money you plan to have at the end of your portfolio’s time horizon.
#1). Maximising terminal value
With this objectives, you stand a better chance to grow your portfolio to fund your retirement. You are looking to increase the purchasing power of your assets as much as possible over your time horizon.
#2). Maintain the real value of the portfolio
This is the main goal of a conservative portfolio strategy. Maintaining the value of the portfolio in real terms, or to protect the value of the portfolio against inflation.
With this objective, you aim to maintain your present purchasing power at the end of your time horizon.
#3). Depleting assets
This is particularly when you have no desire to leave any assets behind. However, assets that do not have a limited life or that keep their value (such as land and investments) may not need to be depleted.
#4). Targeting a specific ending value
This objective has to do with the desire for a specific ending value, perhaps to pass your portfolio value to children as inheritance in most cases.
Good books on stock investment you should read
Stock investment is like rocket science to some people, whereas, it’s as easy as it could be if you know how stock actually works.
So many books have been written on how to get rich that make getting rich seems like a straightforward task that can easily be accomplished even by someone with little or no knowledge of what to do.
What many of these books failed to do is explaining stuff like how skill relates to luck, how powerful are large numbers, and the nature of risk to expect.
If you want to enrich your knowledge on stock investment further, the following are some of the books on stock investment you should read: