Investing in the Stock Market for Early Retirement Is for Dummies

This item was recently posted on an article called How to Retire Early in 5 Easy Steps:

4. INVEST: The next step is to invest it; the return is worth it. You can double your money in as little as 20 years with a mere 5% return. Considering that the average return of a stock portfolio is around 9% over a ten-year period, it is reasonable to assume that you could net more than double your money in ten years, allowing you to retire that much sooner. As such, not investing your savings, even if it is just invested in a high-yield savings account, is tantamount to throwing away money.

This was the comment that I placed after the article:

I believe your comment "Considering that the average return of a stock portfolio is around 9% over a ten-year period," is misleading and simply not true. Investing in the stock market will not help people retire early. It will leave them begging for a retirement job.

I have seen figures like this used a lot by financial advisors, who have nothing but their own self-interests in mind.

This comes from a recent article called You Wasted the Last 10 Years of Your Life:

"If you think the stock market is the road to a comfortable early retirement, you're wrong. You may have thought about cashing in on the long-term average annual returns of 7% (postinflation) you heard you could get from investing in stocks, but I'm here to tell you to think again.

In the past decade, the SPDR S&P 500 ETF (NYSE: SPY), an exchange-traded fund (ETF) designed to track the broad U.S. stock market, returned an amazing -1.4% per year. That's right, negative, as in less than zero. Including dividends. That's a long way from 7%."

So, based on these figures, one would have been better off to place money in a savings account or even in one's mattress than investing in the stock market."

I am all for early retirement and believe that one can retire comfortably by the age of 60 but relying on the stock market - as on Social Security - is for dummies.

Ernie J. Zelinski
Author of How to Retire Happy, Wild, and Free
(Over 125,000 copies sold and published in 9 languages)
http://www.retirement-quotes.com
and The Joy of Not Working
(Over 250,000 copies sold and published in 17 languages)

In response to another article called Debt Is the Number One Killer of Early Retirement Dreams, I posted this comment:

You state, "Debt is the number one killer of early retirement dreams."

I disagree with you.

You should have said, "Death is the number one killer of early retirement dreams."

Many people end up dying on the job before they are able to take early or late retirement.

On the other hand, I agree with you that debt is detrimental to retirement. If you are retiring with any debt, you aren't ready for retirement.

Note: The article mentioned on the top is available at How to Retire Early

Retirees, Early Retirement and the New Retirement

Here are some of the latest news stories about retirees, early retirement, and the new retirement. Some are good and some not-so-good:

Number of Retirees Worried About Finances Has More Than Doubled BankInvestmentConsultant.com - By Money Management Executive A full 49% of retirees are insecure about their financial future, up from only 20% who were afraid a year ago, ...

Retiree plans ruined by financial crisis ABC Online - AustraliaBy George Roberts for PM New research shows that the Global Financial Crisis has ruined the plans of about half of Australia's self-funded retirees.

Charles Schwab Study Finds 9.5 Million Retirees Hope to Re-Enter ... June was another difficult month for American workers with a net loss of 467000 jobs, compared with 322000 in May Despite diminishing employment opportunities and an economy threatening job security, new research by Charles Schwab & Co., Inc shows that as many as 9.5 million retired Americans are considering at least a partial return to the workforce and 32 percent of those currently employed expect to hold their job and delay retirement.

"It’s a challenging time to be facing retirement," said Rich Rosso, financial consultant at Charles Schwab’s Houston branch. "The situation many Americans have found themselves in illustrates the importance of long term retirement planning. But in the short term there are also a host of things people can consider to help smooth the ride."

RETIRING: Seven Keys To A Successful Retirement Wall Street Journal -Rather than sitting around doing nothing in retirement, would-be retirees should scope out what they want to do long before rolling over ...

Here are some resources to help you retire happy, wild, and free:

Where to Retire

Best Retirement Jobs

Retire Happy

Health in Retirement

No Traditional Retirement and No Free Beer for Retirees

Here are some latest news stories about tough times for retirees, including having to go back to work and having to give up free beer:

Many retirees find it necessary to rejoin the workforce
Leader Times - Kittanning, PA, USA LEADER TIMES At a time when senior citizens should be able to relax, some retirees are finding it necessary to go back to work to keep ...


Recession forcing retirees back to work and spooking younger workers
The Salinas Californian - Salinas, CA, USA The shock waves are pushing some frightened investors out of stocks and forcing some retirees to return to work. AARP California spokeswoman Christina Clem ...


WIVB Molson retirees: No Free Beer
WIVB - Buffalo, NY, USA Reuters reports that Molson retirees in Newfoundland, Canada will see their monthly allotment of beer fall from six dozen a month to zero over the next five ...

Here are some resources for retirees:

Retirement Quotes Cafe

Retirement Jobs at The Retirement Cafe

Retirement Jobs at The Real Career Success Resource Center

If you are a retiree thinking about going back to work, here are some tell-tale signs that you should read Career Success Without a Real Job:

You just may have to read Career Success Without a Real Job if you have ever invented a college or university that did not exist to place on a résumé.

You just may have to read Career Success Without a Real Job if everyone at your workplace distrusts everyone else because it is their only defence against assholes.

You just may have to read Career Success Without a Real Job if you have ever on your résumé claimed to be a member of the Kennedy clan.

Retiree's Silver Lining to the Recession

There is a silver lining to the recession for retirees, according, to a newly-released study by Age Wave conducted by Harris Interactive. This means that you too can benefit from a recession.

The retirement study found "new fears, new hopes, and a new purpose for retirement" compared to a similar survey a year ago.

The good news is that many Americans have gone back to financial basics. The U.S. savings rate has increased to 4.2 percent, double that over the past decade, and household credit card debt has gone down 9.7 percent.

A new and in some ways more optimistic vision for retirement is emerging, with 60 percent of Americans viewing retirement as "a new, exciting chapter in life" compared to 52 percent a year ago. "We expected people to be disheartened (about prospects for retirement) but in fact they are not," said Ken Dychtwald, head of Age Wave.

Around 70 percent of Americans want to continue working in retirement as a way to contribute, remain stimulated and pay the bills.

There is a problem with this, however. See More Americans Taking Early Retirement Instead of Delaying Retirement

For Resources on Retirement See:

Retirement Jobs at the Real Career Success Center

Why Money Talks During a Recession

Testimonial for "The Joy of Not Working"

This is an e-mail that I just received about The World's Second Best Retirement Book from an individual who decided to take early retirement:

----- Original Message -----
From: Gord and Rhonda
To: vip-books (at) telus (dot) net
Sent: Tuesday, May 19, 2009 7:08 AM
Subject: FW: Testimonial for The Joy of Not Working

Ernie

As a follow up to my email about quitting work. My last day of work was April 24, 2009. Once I had a plan and my mind was made up, I could not wait until June of 2010.

My coworkers and family were surprised but wishing they could do the same. So far it has been what I expected. Not an emotional high, but an exciting new direction. I have spent the time working for myself by doing renovations on a house we are listing for sale in early June., walking the dogs, spending time with my wife, with friends and learning to do things without rushing.

I have found I sleep a lot less. I get up between 4 am and 6 am and go to bed between 10 pm and midnight. In the mornings I relax by, reading and having a coffee or wandering around the yard with the dogs watching the sunrise. I don’t need an after work nap to clear fatigue or a headache ( I had a headache every day with varying severity. About 10 days ago I noticed that they had stopped).

With the reduced sleep time I have about 2 – 3 hours per day of extra time to use. Amazing.

Thanks for the book [The Joy of Not Working] you wrote because it focused my mind on making this become a reality.

Gord Roberts

The international bestseller The Joy of Not Working:

For more letters about taking early retirement see The Joy of Not Working Website

Retirement - It's Even Better Than Imagined

I recently received this e-mail about how he is enjoying a happy retirement from Mickey White who lives somewhere in the United Kingdom:

----- Original Message -----
From: Mickey White
To: vip-books (at) telus.net
Sent: Wednesday, November 12, 2008 8:45 AM
Subject: it's even better !!


Hi Ernie,

I took early volountary retirement from the Mail Service after thirty plus years when I was fifty seven.

My kids bought me your book, The Joy of Not Working as a gift on the day I finished.

Mind you I was happy to take E.V.R. and I agree with everything you say !!

In fact if I'd known that retirement was going to be this good I'd have done it the day after I left school !!!

Good Luck.....

Mike .....

If you taking early retirement, but are not ready for full retirement and want to work at fun retirement jobs, then you should be reading this book that will benefit a lot of retirees:

Career Success Without a Real Job: The Career Book for People Too Smart to Work in Corporations

Retirement Income - 10 Sources to Help You Retire Early

Most Americans at work have only one source of steady income: their job.

In retirement you are likely to have several sources of retirement income, according to a Gallup poll released today.

Following are sources of retirement income that Americans either rely on or expect to rely on:

• Retirement accounts. A 401(k), IRA, Keogh, or other retirement accounts


• Social Security


• Stocks.


• Savings.


• Pensions.


• Rent and royalties.


• Inheritance


• Annuities or insurance.


• Part-time work or a Fun Retirement Job


• House Equity.

Incidentally, this is the first time this decade that the majority of Americans have doubted their ability to retire.

Gallup’s telephone survey also found that 52 percent of Americans doubt they will have enough money to live comfortably in retirement, while only 41 percent say they will.

Retirement Is Still Tough for Some

The Latest Retirement News is bleak for some:

Baby Boomer Golden Years
La Voz Nueva - Denver,CO,USA
According to the National Retirement Planning Coalition, the future
looks bleak for “tens of millions of Americans.” It says that, “almost
forty percent of ...


US Retirement Assets Tumble 24% in 2008, Spectrem Group Reports
MSNBC - USA
CHICAGO, IL - Retirement plans have lost nearly a quarter of their
value in this economic crisis. Total US retirement market assets,
which include both ...

Retirement wouldn't be difficult to attain if more people followed The Easy Rule of Life depicted in the image above.

Here is a bit about an inspirational book that I wrote several years ago which explains The Easy Rule of Life in full:

Look Ma: Life's Easy

How to Survive a Recession in Style

My family wasn't affected by the crash of '29. They went broke in '28.
- Gerald Barzan

Here is what a Squidoo Lens Maker Says about the benefits of a recession and how it will help you survive a recession:

• A recession makes you wiser
• A recession makes you think out of the box
• A recession makes a decision maker out of you.
• A recession makes you appreciate what you have.
• A recession forces change
  

Here is one way on how to survive a recession in style:

I just received the following letter from Raúl Mellado in Spain:

Dear Mr. Zelinski,

I am writing from Spain, after reading your book The Joy of Not Working, after a recommendation by a friend. I must say it's one of the funniest — yet at the same time useful book I've ever read.

When I told my colleagues I was quitting my job as a computer engineer to move with my girlfriend to a little island (called La Palma) in the middle of the Atlantic Ocean, where we had no job, no house; just a couple of friends living there and nice weather all year long, they all said I was crazy.

Now, looking back, I think it's them who are crazy for staying where they are! I clearly remember one coffee break, talking about what we would do if we won the lottery. And absolutely no one would stay where we were.

So I thought, if you don't like what you do, Why keep doing it?

Here, in order to pay the rent for our flat, my girlfriend takes somesporadic jobs as a nurse, and I use my computer skills from time totime on some projects, but most of the time, we are free. We havereduced our expenses to the minimum, and our capacity to enjoy lifeto the maximum!

We have walks in nature, read the newspaper lying on the beach, several books (one per week is our aim,) learn new recipes and cook our slow-food, learn new languages, etc.

I am 26, and she is 24. We are really happy we took this path whenwe are relatively young (no young enough to keep awake till 6 am ata party, anymore), not wasting our lives living for work.

Also, we think this lifestyle, reducing consumption to a minimumand escaping the vicious consumerism, apart from increasing our happiness, helps our planet, working in favor of its sustainability.

Currently, we are trying to find and develop some kind of businessin which we can enjoy ourselves and have a regular income, not working too hard. Do you have any suggestions?

[ Answer: Yes, read Career Success Without a Real Job.

Now we are looking forward to reading your latest book How to Retire Happy, Wild, and Free, lying on a beach.

We would like to thank you for all we've learned with your book, andno need to say, we would really enjoy having your visit over hereone day. Just look for flights to "Santa Cruz de La Palma", in Spainand let us know what time we should pick you up at the airport.

Best regards from Spain,

Raúl

Here are a three retirement quotes:

Retirement is the beginning of life — not the end!

— from How to Retire Happy, Wild, and Free

Don't wait for retirement to be happy and really start living. Invariably, people who try this find out that they have waited much too long.

— from How to Retire Happy, Wild, and Free

To fear retirement is to fear life.

— from How to Retire Happy, Wild, and Free

Also check out these resources to help you survive a recession:

Fashion and Money

Top-10 Dumbest Retirement Moves

TV Watching Is a Horrible Way to Spend Your Retirement

Research indicates that on the average Americans spend about 40 percent of their free time in front of the TV. For retirees, the percentage is much higher. This translates into 4 to 6 hours a day watching TV — which is about 4 to 6 hours too many.

Contrary to popular belief, one way to guarantee boredom in retirement is to watch a lot of TV. Even people who retire with substantial wealth end up watching a lot of television instead of getting involved in more satisfying leisure and recreational activities.

One problem is that television entertains but deludes people. T.V. as a whole is not very educational. When programs are educational, people don't watch them.

Some retired people say that television is a necessity in today's world. This is nonsense. In summer, I sometimes go for four months straight without turning on my TV set for even one minute. Moreover, I know a few people who don't even own a TV set. Case closed: This proves that TV is not a necessity.

Retired people watch TV without understanding what they are watching. Even if they understand, they seldom absorb anything worthwhile. In my book The Joy of Not Working, I discuss the many more detrimental effects of TV including how chronic TV watchers are more likely to be jerks and to be obese.

Retirement Quote for this Week

The human race is faced with a cruel choice: work or daytime television.
— Author Unknown

Just Finished Reading The Joy of Not Working

Following is the most recent e-mail that I received about The Joy of Not Working: A Book for the Retired, Unemployed, and Overworked that was sent to me by Eric Clarke of British Columbia.

----- Original Message -----
From: Eric Clarke
To: vip-books (at) telus.net
Sent: Thursday, October 23, 2008 3:58 PM
Subject: To ErnieZelinski - Thank you!


Dear Ernie,

I have just finished reading the The Joy of Not Working. What a truly
enjoyable and thought provoking book. As a recent retiree you have
helped me to remember what is most important in life and generously
shared your personal experiences, thoughts and some tools to help
me reconnect with those things.

I am looking forward [to retirement ]with excitement and anticipation as I begin this
journey and hope that at the end I find I have grown into a fully
developed and happy child.

Thank you.

Eric Clarke
Email - chimiera (at) shaw.ca
Tele: 573-5982

Here are the covers of some of the other Foreign Editions of The Joy of Not Working:

French Edition

Spanish Edition

Japanese Edition

Czech Edition

Greek Edition

German Edition

Turkish Edition

French Edition - Canada

Dutch Edition

Korean Edition

Italian Edition

Chinese Edition - Traditional Characters

Chinese Edition - Simplified Characters

Portuguese Edition

Polish Edition

Indonesian Edition

The New Retirement for Baby Boomers - Going Bust and Not Being Able to Retire

It never ceases to amaze me how most people are fools with their money. A recent report confirms my suspicions that baby boomers are just as irresponsible with their money and act on their short-term interests. Very short, term interest. Just like most young people today, instant gratification takes too long.

Homeowners' behavior during the recent housing boom in the U.S. left American soon-to-be retirees in worse shape approaching retirement, because a house accounts for half of the property and financial wealth of the typical household approaching retirement age, according to the Center for Retirement Research at Boston College.

Alicia Munnell, the center's director, looked into how the housing bubble affected retirement security in a recent report with Mauricio Soto, a research economist at the center.

Here are some key findings of the report, released this month:

• Many households reacted to the gain in housing prices by taking money out and increasing their debt. The center estimates that households extracted about $1.2 trillion of their home equity during the boom from 2001-06.

• Total debt rose to 120 percent of disposable personal income in 2007 from about 80 percent in the early 1990s, according to government data.

• With most of their family responsibilities out of the way, households headed by homeowners older than 50 were more likely to take out home equity. All told, homeowners 50 to 62 years old took out about $380 billion from their primary residences and posted expenses of $149 billion, based on government data from the Federal Reserve System and the Case-Shiller Home Price Index.

• Homeowners with children were more likely to tap into their home equity, possibly to pay education and other expenses.

• Homeowners said they spent 10.5 percent of what they took out from their primary homes on expenses, including personal spending and repayment of credit-card debt; 23.5 percent to pay off past debts; 32.2 percent for home improvement; and 33.8 percent for investment in the stock market, real estate or business.

• For a typical homeowner nearing retirement (ages 50 to 62 in 2004), the gains in housing equity were nearly offset by additional spending. Their household net worth fell by an estimated $6,900, or 14 percent.

The report found that people increased mortgage debt by $1.2 trillion during the housing boom and increased consumption by $410 billion.

As I have said before, so much for houses as investments for retirement. Again, houses are consumer products and not investments. If you are buying a house on the hope that it will go up, you are speculating. If you are speculating, you should be prepared for the price to go down instead of up. Don't blame anyone else when your house price goes down. You caused this situation to happen by believing what the shady real estate agents and mortgage lenders have told you.

If you want to be financially well-prepared for retirement, invest in yourself by spending as much money as you can on books, seminars, and motivational tapes on how to run your own business or how to make money on the Internet. Fact is, your most valuable asset is actually your ability to earn an income.

Your enhanced earning power that comes from your superior skills and knowledge should be part of overall retirement plan. Although the banks and other financial institutions don't count intangibles such as creativity, innovative character, risk-taking ability, and specialized knowledge in tallying your net worth, you should. These items are much more important to a retirement portfolio than a house.

WARNING! WARNING! WARNING!

Retirement is a double-edged sword. You either make it work for you - or it will cut your happiness in half. The more you know about the secrets to a successful retirement, the happier you will be once you retire.

That's why you need The World's Best Retirement Book by Vipbooks Author Ernie J. Zelinski.



Over 100,000 Copies Sold
Published in 7 Foreign Languages

How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won't Get from Your Financial Advisor is a provocative, entertaining, down-to-earth, and tremendously inspiring book that will help you get more joy and satisfaction out of all your retirement activities.

Although turned down by over 35 publishers, How to Retire Happy, Wild, and Free has already sold over 100,000 copies and has been published in 7 foreign languages since it was released by Ten Speed Press in Berkeley, California.

What's more, go to www.Amazon.com and type "retirement" into the search feature. You will see that How to Retire Happy, Wild, and Free appears in the number 1 position - out of over 175,000 listings for retirement books!

Purchase How to Retire Happy, Wild, and Free on Amazon.com with this direct link:

How to Retire Happy, Wild, and Free on Amazon.com