Are You Prepared For A Rollercoaster Retirement?
It was 9:30am on Thursday morning in 2017.
There was anticipation and excitement in the air.
We were on a family holiday in Hong Kong and we were making our way to Disneyland.
My two boys, Nicholas (6) and Joshua (3) along with my wife Danielle we all excited about the day that was to come.
We arrived at Disneyland station after a 20-minute train ride from Hong Kong. We depart the train, kids eagerly excited about what’s in store for the day. They’d never been to Disneyland, neither had I, nor my wife. So we were looking forward to seeing what it was all about.
It’s a short walk to the Disneyland line, not knowing what to expect.
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What comes in is a Disneyland-themed train, the kids were so excited.
As the train came in you could see the Disney ear-shaped windows.
We boarded the train.
You could feel the excitement around us, from young kids to the adults.
As I was looking around the train they had thought of every little detail.
Little statues of Disney characters to even the Disney ear-shaped hand straps to hold on to.
After a short train ride, we had arrived at Disneyland station and made our way to the main gates admiring how big and bold everything was along the way.
It was a bit of a hike to the main gates. We bought our tickets and we wandered inside. It was like something out of a Disney movie. It was a massive and epic place, no wonder people spend days at these places.
You could see it was going to be a warm, steamy day as Hong Kong was known for.
First port of call was Fantasy Land.
The first ride, Winnie the Pooh. Kids absolutely loved it. The funny thing was there were more adults than kids on these rides, and it’s a kid’s ride.
People we starting to pile into Disneyland, the wait time on rides starting to rise.
It was time to move on.
So we wandered on down to Toy Story Land.
The boys had an absolute ball.
After we’d finished at Toy Story Land, we decided it was time to get something for lunch.
What we didn’t realise is everyone else had the same idea and it was literally shoulder to shoulder.
We then headed to Tomorrowland. Filled with everything themed Star Wars, Iron Man & Ant-Man.
The kids were having an absolute ball.
So far, the rides and experiences had been pretty tame.
There was one ride my eldest, 6 at the time picked out, called Hyperspace Mountain. A Star Wars themed ride.
It was inside a massive shed. At the time I didn’t take much notice nor had any idea what type of ride it was.
My eldest, Nicholas, was nagging me to take him so we lined up not knowing what to expect while Danielle and Joshua sat down for a rest.
As we were waiting, Nicholas was asking me questions about the ride for which I really had no answers. All we could see was darkness inside and we could hear lots of loud noises.
We’d finally made our way to the front of the queue, ushered into a section of the ride waiting in anticipation.
Nicholas was excited as I made sure he was strapped in tight.
All we could see ahead of us was darkness and the entry we will eventually go through.
As we roll away from the station, a voice from the speakers started talking, Admiral Akbar briefing us on the mission.
What started off as a gentle ride, quickly turned into a fast roller coaster ride as we were transported into the middle of the battle.
The ride started to pick up speed as we went down steep declines and then we started to get thrashed side to side as the ride replicated a dog fight right out of the stars wars movie.
Within about five seconds of the ride starting, Nicholas turned to me and said “Can I get off? I’m scared, daddy”. He kept repeating, I don’t like it, I don’t like it.
I started to feel sick to the stomach as we were getting thrashed side to side on this ride not knowing what to do. We couldn’t just hope off mid-ride.
So, I did the only thing I could do and that was put my arms around him and hold onto him until the ride finished.
I kept reassuring him he’d be ok, but he kept telling me he was feeling sick and wanted to get off. There was nothing I could do. Nothing like feeling helpless. I was hoping the ride would finish quickly.
What seemed like an eternity, we finally rolled into the station where the ride finished. Feeling relieved that now I could get my son off the ride.
It was, in fact, a bad parenting moment. Not the only one on this trip by the way.
What I’d realised is we, in fact, had been on an indoor roller coaster ride. No mention of that on the way in.
We headed back to where Danielle and Joshua were sitting. I could see that Nicholas was visually shaken which didn’t make me feel any better.
When we got to mum, she started asking what was wrong. Nicholas was white as a ghost. Telling mum that I shouldn’t have taken him on that ride, now it was all my fault.
All he kept saying to mum, I’m not going on that ride again. That was really, really scary.
So you might be wondering, what is the point of this story?
Well, it’s a bit like investing in the stock market.
What sometimes starts off slow and mild can quickly turn to a wild ride of swings as panic and emotion kicks in.
As humans, we fear failure and pain more than we fear gain. We’ll avoid it at any cost.
Although we enjoy the spoils that come from investing, however when things get scary and for some, they jump off part way through the experience. Much like my son wanted to exit the ride part way through.
Here’s the thing, experiencing share market ups and downs are, unfortunately, the ticket to the game, it’s part and parcel of investing. While it’s hard to stomach when things aren’t going well, it’s important to remain calm, as hard as it can at times when emotion and fear kick in.
To be able to survive and thrive in retirement you need to generate a return. And to do that you need to be invested in shares, otherwise in the current environment you’re money will go backward if solely invested in cash.
However, from time to time you are going to experience bad investment markets. A bit like the global financial crisis and you’re going to feel like pulling out.
It’s a little like the roller coaster experience I explained above. At times the experience made you feel sick to the bone, and my son wanted out part way through the experience.
But, you know what, although a little shaken, we were both alright.
It’s the same with investing. If you understand the game. Invest the “RIGHT” way and implement buffers you’ll be able to sail through the rough seas knowing full well when you come out the other end you’ll be ok.
I remember a number of conversations I had with people through the Global Financial Crisis. They panicked, jumped off the ride midstream thinking they were going to lose the lot if they stayed the course. As an adviser, I even lost my nerve, it was a scary time, but had to hold strong and take the emotion out of it. By doing this, many of my clients are thriving again today.
Here’s the thing, most were going to reinvest at some time in the future, ie. trying to time the bottom. Most never did and are now paying the price for jumping off mid-ride.
Had they had held the course they would have come out the other side in good shape, although like my son, a little shaken, but ok.
Having walked alongside many in their Retirement journey there are strategies we implement for clients to protect their lifestyle when a major market event comes. They will come, we just don’t know when they’ll be.
Cut Through All The Noise! Don’t Be OverWhelmed Again!
Are you looking for answers to these questions?
- Will I have enough?/Do I have enough?
- When can I Retire?/If Retired will it last?
- Will I be ok?/Will I outlive my money?
- If something happens to me will my spouse and family be ok?
It’s hard to decipher all the information and work out which way to go.
Let’s get on the phone and we’ll help you answer all those questions.
On this free 30 minute call, we’ll help you work it out.
You’ll walk away with all the key information. How much will I need? How am I currently positioned? What are my options and opportunities to get me there quicker and in better shape?
No longer will you feel overwhelmed. You’ll have a weight lifted off your shoulders financially, feeling in control so you can roll into retirement with a lot more confidence.
Your life will have a little less stress and more fun knowing you have a gameplan to enjoy your DREAM Retirement.
Simplify your life now, and plan with intention.
Future Proof Your Retirement Lifestyle…
We implement a three-step approach to protect pre-retirees and retirees lifestyles:-
- Always hold a buffer of 6-12mths worth of spending in reserve.
- Always hold the next 12-18mths worth of expected large capital outlays in cash. For things like new car purchases, overseas holidays, etc. This is an ongoing task
- When investing, our preference is for a balanced approach that generates a form of income. We like to retain approx 2-3 yrs of income requirements in very conservative investments.
By adopting the above approach you will future proof your Retirement Lifestyle in 3 ways…
- You’ll have the funds should an emergency come. No need to worry about selling investments when markets are down.
- No need to worry about share markets shocks getting in the way of your experiences. That’ll be all planned for and cash ready and waiting to be deployed to fund them.
- Structuring your retirement assets in the right manner will mean you future proof your dad to day lifestyle. No need to worry about how you are going to fund your yearly income. You are protected in times of scary investment markets.
This may sound like a very simple strategy, however, I see many get it wrong and it will end in tears.
The key is to have a solid plan that allows you to plan and protect yourself against the certainty of uncertainty in retirement. Never be worried about having to downsize your retirement. If you’ve done the work, you’ll be rewarded.
So I hope that’s been useful. Until next time, make it a great retirement.
You may also find these resources useful:
Portfolio Safety Drill – Part 1 – Build A Cash Fortress
Portfolio Safety Drill – Part 2 – Regular Rebalancing
Portfolio Safety Drill – Part 3 – Don’t Let the Market Catch You Off Guard
Next week… I discuss how DIY and thinking you’ve got it sorted may end in tears…A real live example…
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Make it a great Life!
Challenging the Status Quo!
Glenn Doherty – CFP – Founder & Financial Organiser at Jigsaw Private Wealth