When you’re in your 20s, you’re probably just starting out in your first job and concerned with making a good impression. Even if you might still be living with your parents, buying a new wardrobe, going out to fit into your new environment, enjoying your independence will become paramount concerns, rightly or wrongly.
In your 30s, you are most likely raising a family, saving for your children’s education, taking out a home mortgage, paying for your first or second car, and some of you might be taking care of an aging parent.
If you are in the 40-something age group, you might have bigger salaries and bonuses, but will be dealing with health issues too and higher cost of living. At what point do you seriously start thinking about investing for retirement and how much do you set aside? With all these financial concerns at the back of your mind, it’s no surprise that retirement will be taking a backseat.
I read a rule of thumb in The Asian Wall Street Journal’s Lifetime Guide To Money (Dow Jones & Co., Inc.,) that to figure out how much to invest in the long haul, you should subtract your age from 100 and add a percentage sign.
Using that rule, I’m under-investing and spending too much on current concerns! That is, unless I count the money hubby and I are putting into our home.
How about you?
24 Responses to “How much to invest for the long haul”
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Pages: « 5 [4] 3 2 1 » Show All
September 5th, 2008 at 6:52 pm
@hvrds, thank you that is very informative. Finding 15% to 20% overall return is tough! Any tips?
September 5th, 2008 at 6:52 pm
@mzkukuro, many insurance companies now sell insurance as an investment, but i would be very careful about fees, which are not transparent in insurance instruments. In general, I have heard personal finance professionals say that it is better not to mix insurance with investments.
September 5th, 2008 at 6:03 am
Hi Salve!
Would you mind explaining the rule further? I don’t quite get it yet. After getting the percentage, where do you apply it?
gross/net income?
somehow, I don’t get the logic behind the rule. Like say if you’re 30 now and earning 30,000 in a month. That means you’ll have to invest 21,000 (70%) for retirement. And at 65 when you’re suppose to be retiring already, you still have to save 35% of your income/pension?
Thank you.
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September 5th, 2008 at 3:45 am
It really is a hard climb, but we do intend to climb up! Thanks, ACN!
September 4th, 2008 at 3:16 pm
i admire your courage and effort, audrys. Having 6 kids at this era is really a challenge for someone who is still accumulating wealth. Good luck and God bless. =D