RETIREMENT IS A NUMBERS GAME  
by the Alchemist Al Thomas
6-12-05

Someday you may want to retire, BUT you have to have enough money to continue your present life style. Wall Street puts that estimate somewhere between a million dollars or maybe half that. Of course your house will be completely paid for and you won’t have any other large debt. Dream on.

It seems Mr. Average IRA Investor has less than $50,000 in his account. Just a little short here. Then there is your 401K which I hope you have been adding to every week and that nice company pension. Don’t forget Social Security. Total these.

Let’s do some numbers. Get your pen and paper and figure out what you are spending now. See if there are some items that will not be appearing when you stop going to the job. Believe it or not there won’t be that many. Put that final number on your paper and subtract it from the total. You didn’t know it was that much, huh.

Here is the big surprise. Health coverage. As you get older this item is going to increase until you find you are spending more each week than you did when you were working. That is why you should be squirreling away as much as you can right now.

Since you are going to need all the money you have saved to date and more then you should be looking at the stocks and mutual funds you currently own. Are these increasing in value? Have any of them gone down?

The great secret of Wall Street is not what to buy, but when to sell. That’s right. Unless you have an exit strategy for every equity in your portfolio you will never keep your money. If it isn’t holding its price or going up you want to ask that stock a question: What have you done for me lately? If it is more than 10% or at the very most 15% off its highest price it is time to sell. And don’t wait to get “even”.

Waiting to get even is a loser’s game. People get locked into holding bad positions that only get worse when they are waiting for the stock to rally back up. Forget it. Get out before it is a bigger loss. Learn to take small losses, but never hold on for big ones.

To retire without having to work is a numbers game all thru your life. You have to do the numbers on a regular basis. Check out your spending habits. Keep your credit card debt to a minimum. If it gets to be too much cut the card in half and work with cash only. Sound difficult? It is, but unless you want to be eating cat food at retirement you must keep your numbers in balance.

Buy stocks and mutual funds, but if they start down you must sell at once. Never take advice from a broker. He will make you broker. You must be in charge at all times.

                Doing it right will not require the huge sums Wall Street says. Be prudent with your expenses and sell those weak stocks and funds immediately. Keep control of your numbers on both the debit and credit sides.

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Al Thomas' best selling book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter and receive his market letter for 3 months at www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.     

Copyright 2005