Key steps to help you toward a safe, secure, and fun retirement (part 3)

4. Assess Risk Tolerance vs. Investment Goals

Whether you are a normal person or a professional money manager who is considering the investment decisions, the most important step in retirement planning is arguably a proper portfolio allocation that can balance the concerns of risk aversion and return objectives.

You need to ensure that you are willing to face the risks being taken in your portfolio and make clear what is necessary and what is a luxury. You should seriously talk about this issue with your financial advisor and with your family members as wells.

Markets will go through long cycles and if you are investing money, you can afford to see your portfolio value rise and fall with those cycles. When the market declines, you should buy instead of selling.

5. Stay on Top of Estate Planning

Another key step in a well-rounded retirement plan is estate planning, and each aspect requires the expertise of different professionals like lawyers and accountants in that certain field.

Remember that life insurance is also a major part of an estate plan and retirement-planning process. A proper estate plan and a life insurance coverage makes sure that your assets are distributed in a manner of your selecting and that your loved ones will not have to experience financial hardship after your death. A carefully outlined plan also helps you avoid an expensive and often lengthy probate process.

Another crucial part of the estate-planning process is tax planning. If an individual wants to leave assets to family members or a charity, he or she must compared the tax implications of gifting the benefits and passing them through the estate process.

A common retirement-plan investment approach depends on producing returns that meet yearly inflation-adjusted living expenses at the same time preserving the value of the portfolio. The portfolio is later transferred to the beneficiaries of the deceased. Therefore, you should consult a tax advisor in order to determine the correct plan for the individual.

Key steps to help you toward a safe, secure, and fun retirement (part 2)

2. Determine Post-retirement Spending Needs

Being realistic about retirement spending habits will help you determine the required size of a retirement portfolio. It is commonly thought that post-retirement annual spending will amount only 70-80% of what have been spent previously. This assumption is unrealistic, particularly if unforeseen medical expenses occur or the mortgage has not been paid off. Retirees also usually spend their first years traveling or other bucket-list goals.

By definition, retirees are no longer at work for eight hours per day so they have more time to travel, go shopping, go sightseeing, and join other expensive activities. Accurate post-retirement spending goals help in better planning process since more spending in the future requires more savings today.

Note: Actuarial life tables can help estimate the longevity rates of individuals and couples (referred to as longevity risk).

Moreover, if you want to purchase a house or fund your children’s education after having retired, you may need more money than you think. Those need to be factored into the whole retirement plan. It is also necessary to update your plan once each year to ensure you are keeping on track with your savings.

3. Calculate After-Tax Real Rate of Investment Returns

Once the expected spending requirements and time horizons are determined, you should calculate the after-tax real rate of investment return to assess the feasibility of the portfolio creating the needed income. A required rate of return in excess of 10% is commonly an unrealistic expectation. As time passes by, this return goes down, as low-risk retirement portfolios are mainly composed of low-yielding fixed-income securities.

Investment returns are typically taxed, depending on the type of retirement account you hold. As a result, the actual rate of investment return must be calculated on an after-tax basis. But determining your tax status as you start to withdraw funds is a component of the retirement-planning process.

Top four lessons gambling can teach you about finance

Many people consider gambling to be a vice but gambling can also be a great way to learn more about finance and life in general. Let’s look at top four lessons that gambling can teach you about finance.

Nothing is free

Most casinos offer a welcome bonus when you deposit money to your account for the first time. This is often marketed as free money. However, this is not the case since you will only be allowed to withdraw the bonus from the account or the money you deposited when you have fulfilled different betting requirements. This rule is designed to make it easier for the casino to win back the money. So the lesson is that nothing is free. Always read the fine print before starting playing to find out the true cost.

Risk and reward

Casino games can teach you many lessons about risk and reward by showing you how low-risk bets often give a better return in the long run. The house edge seems to be larger on long-shot bets than it is on bets with low odds. The lower house edge on smaller bets give them more profits in the long run. Remember that the risk in most high-risk high-reward scenery is too high to justify making a bet.

Location matters

If you have played in an offline casino, you must have learned that location really matters. Casino tables and slot machines in certain locations may offer worse odds than the others in other parts of the casino. Therefore you should locate the tables that offer you better odds to win, whether they are conveniently located or not. Tables by the entrance is usually a location that provides you lower odds of winning.

Risk management

The most important skill that gambling in casinos can teach you is risk management. You need to have the ability of managing your bankroll as well as managing risk. Good risk management helps you to eliminate the element of fortune out of the gambling.

Key steps to help you toward a safe, secure, and fun retirement (part 1)

Retirement planning is a multi-step process that needs a long term run. To have a safe, secure, and fun retirement, you need to build the financial cushion that will fund it all. The fun part is the reason why it makes sense to pay attention to the serious and perhaps the most boring part: planning how you’ll get there. Let’s start building a solid retirement plan by learning the five steps below.

1. Understand Your Time Horizon

You need to start planning for retirement by thinking about your retirement goals and the total time you have to meet them. Your current age and expected retirement age defines the initial groundwork of an effective retirement strategy. The longer the time from today to retirement, the higher the level of risk your portfolio can withstand. Moreover, you need returns that outpace inflation to maintain your purchasing power during retirement.

Generally, the older you get, the more your portfolio should focus on income and the preservation of capital, which means that a higher allocation in securities, that won’t give you the returns of stocks but will make it less volatile and provide the income for you to use to live on. You will also have less concern about inflation and less issues about the rise in the cost of living than a much younger professional who has just entered the workforce.

In addition, you should break up your retirement plan into various components. For example, you should break up the investment strategy into three periods: two years until retirement, saving and paying for education of your children, and living expenses. A multi-stage retirement plan has to integrate various time horizons, as well as the corresponding liquidity needs, in order to determine the optimal allocation strategy. You should also rebalance your portfolio over time when your time horizon changes.

Seven Financial Lessons the COVID-19 Pandemic Teaches Us (part 2)

4. Debt stinks

For many of us, car loans and credit card balances reflect a lifestyle that we can’t easily afford. We attempt to “keep up with the Joneses,” but they probably can’t afford their lifestyle either. Therefore, we are chasing a façade. And what we can find at the end of the chase is a massive burden. And although you hate the burden, you still have to pay your bills. In tight financial times, the burden feels even heavier. We don’t have enough money to pay the bills, and the accumulation of late fees and interest makes the debt even greater. Debt certainly does stink.

5. Saving for retirement is not for the faint of heart

During bull markets, overconfidence can lead to bad financial decision-making. During bear markets, it is fear. If the market dips, your emotions will beg you to abandon your investment plan and sell it all. This is a big mistake. What leads to successful retirement investing is discipline and a long-term mindset. We need to let our brains override our emotions.

6. Financial margin is a key

Debt-free living, retirement savings, and emergency funds are all worth pursuing. However, to chase after these things, we need financial margin and living paycheck-to-paycheck won’t get us there. We should learn to maintain our existing standard of living at the same time our income increases. Don’t let the number on our paycheck determine the amount we spend.

7. Generosity changes lives

Where and when there is great darkness, light shines even brighter. We have seen the impact that even seemingly small acts of generosity can have on our community. It matters for them and it also matters for us. We frequently regret past purchases but we rarely regret past generosity. Generosity should be a financial priority for all of us.

Tottenham borrow £175 million to ease financial pressure due to COVID-19 pandemic

Tottenham FC has confirmed they have borrowed £175 million from the Bank of England to ease their financial burden due to the COVID-19 pandemic. The crisis has caused financial issues across the football world and a lot of clubs are in dire conditions with a few on the verge of bankruptcy.

Tottenham, like all football clubs in the world, have seen their revenue affected by the coronavirus seriously with them forced to deal without match-day and broadcasting income. Moreover, with the Tottenham Hotspur Stadium doubling up as a multi-purpose venue with boxing matches and NFL matches staged, the club lost further income. That consists of income from two NFL games and a heavyweight title fight alongside many other events.

That has caused some serious problems for the club and it has caused them to take a £175 million loan from the Bank of England under the Covid Corporate Financing Facility (CCFF) of the government. The loan has been confirmed by both Tottenham and the Bank of England with the Athletic reporting that they are among the few clubs who qualify for the CCFF initiative. The report also added that the North London side has projected losses of £200 million between mid-March and June 2021.

The Spurs has stated that the money will not be used to player acquisitions, but to make sure that the club has the “financial flexibility and additional working capital” in order to repay the debt on their stadium. The pandemic has forced the club to take drastic measures when they used the government’s furlough scheme to help them pay non-playing staff. However, the North Londoners were forced to reverse their decision after facing criticism which meant that only Daniel Levy and board members have taken a pay cut.

That includes the first team squad with Tottenham who is unable to come to an agreement to a pay cut or a wage deferral with their players. But the Athletic has reported that there could be more financial issues with the Premier League set to return broadcast money even if the season continues on.

Seven Financial Lessons the COVID-19 Pandemic Teaches Us (part 1)

During these times, many have found themselves stuck at home, wondering what they could have done differently and how to let that knowledge better their decision-making in the future. Financially, the COVID-19 pandemic has provided its fair share of lessons, which we would have rather not learned by such a hard way. However, the point should be to move forward wiser and more determined than ever before rather than to dwell on regretful mistakes.  So what lessons have we learned these days?

1. Overconfidence leads to poor financial decision-making

It is astounding that the difference a few weeks can make. Not too long ago, the financial market was reaching new heights at the same time unemployment was hitting rock-bottom lows. All seemed good. And many people were making financial decisions as if nothing could change – spending more, saving less, selecting riskier investments, and accumulating debt. However, everything has changed and it exposed the fragile financial house having been built. Fact shows that overconfidence leads to poor financial decision-making and is too aggressive in some areas. We must be wiser.

2. Everyone needs an emergency fund

Financial experts have emphasized the importance of emergency funds for some time. The reason is that a financial emergency is not a matter of whether or not but when. An adequate emergency fund can get you through times as your income is low or even nonexistent. Those with money set aside for an emergency are better able to weather this crisis.

3. Developing multiple streams of income is important

There are many reasons why people get side gigs: to save for the future, pay down debt, or give away more. What the pandemic has taught us is that multiple streams of income not only help us reach our financial goals during good times but they also help us make it through times under the common economy tanks and layoffs. The additional income streams also provide an opportunity to generate some income even if we lost a job.

What caused the 2008 financial crisis?

The unexpected COVID-19 pandemic has made financial markets around the world fall free, causing fears of a recession that will rival the financial crisis in 2008 when world leaders strive to stave off economic calamity.

The peril signs have naturally raised questions about the similarity of the current situation with the 2008 financial crisis, which is known as the worst economic downturn since the Great Depression.

However, the 2008 crisis was different from the ongoing economic issues due to social distancing regulations and lockdowns quarantines.


The worst economic downturn since the Great Depression was triggered by the overheating of the housing markets. The reason was that banks and other lenders approved mortgages, sometimes to borrowers that had poor credit histories, which drove up home prices to astronomical levels. Then banks sold the risky mortgage-backed securities to other financial organizations.

Lehman Brothers, Bear Stearns, Morgan Stanley, and Merrill Lynch, and many other big financial conglomerates all became lenders of mortgages. A 2018 paper published by the University of California Berkeley showed that Citigroup held onto $43 billion of high-risk mortgage-backed securities, UBS $50 billion, Morgan Stanley $11 billion, and Merrill Lynch $32 billion by the summer of 2007.


The mentioned paper also said, “Since these institutions were producing and investing in risky loans, they were thus extremely vulnerable when housing prices dropped and foreclosures increased in 2007.”

Due to a glut of new homes on the market, housing prices across the U.S. started to plummet, which means that homeowners and their mortgage lenders were suddenly underwater since they owed on the mortgage more than the estimated value of their property. Owners lost their homes after having defaulted on their mortgage payments while banks holding the securities were pushed toward bankruptcy.

That the mortgage industry collapsed shocked not only the U.S. but also the global economy, the authors of the UC Berkeley paper wrote. If it had not been for the strong intervention of the government, U.S. homeowners and workers would have experienced even greater losses.

US Stock Fell Again and Asian Stocks Sank Into The Red

The rising number of infections combined with the US Congress’s disapproval of aid made the US futures stock once again down to the limit.

In the session today 22/3 US time, the S&P 500 has lost 5% of the value, the reduction of the floor so that lower transactions are not allowed to perform. Australian stocks sometimes dropped by 8% while South Korean and Hong Kong stocks lost about 5% of their value. The dollar continued to appreciate against other currencies in the currency basket. The New Zealand dollar fell.

In the context of investors assessing the severity of the upcoming recession, James Bullard, President of the Federal Reserve Bank of St. Louis, the US unemployment rate is expected to reach 30% in the second quarter due to business activities stalled by the virus spread.

The market is now heading towards a global crisis that will occur as the previous warnings. In this case, Goldman Sachs strategists Kamakshya Trivedi and Zach Pandl say that investors should be defensive.

The uncertainty surrounding the timing and extent of the corona virus’s impact on the global economy remains high. The pessimistic signals covered and the figures reflecting the increasing impact caused investors to sell off assets to keep cash.

In the context of a series of countries launching stimulus measures, the strong spread of viruses makes them less valuable. The recession in the US can be very profound and the unemployment rate may soar, Morgan Stanley warned.

In the United States, the Democratic Party prevented the US Senate from accepting a huge package of anti-virus aid when House Speaker Nancy Pelosi said that the measures had not yet achieved the desired goals. In the latest policy moves elsewhere, the New Zealand Central Bank said it would buy up to $ 17 billion of government bonds in the secondary market in the next year. The Central Bank of Thailand has taken steps to stabilize its financial system.

Man Utd Stock in 2012: Why Did They Delay NYSE Stock Float?

The instability of the New York stock market in 2012 has caused the issuance of stocks, the solution that MU used to write off debts, must be temporarily shelved.

According to The Guardian, Man Utd decided to postpone the issuance of shares on the New York Stock Exchange, because of concerns that the unrest in Wall Street could lead to unpredictable consequences.

Before coming to New York, Man Utd had looked at the Far East stock market, from Hong Kong to Singapore, but all have to ignore because of the instability in these markets.

The New York market was chosen in the hope that the stock would help the club get the financial resources to cover the £ 423 million debt. However, the erratic rise and fall of the S&P, Nasdaq and Dow indices on Wall Street caused anxiety for the management of Man Utd that year. Therefore, they decided to postpone the release.

According to the original plan, M.U will list shares on the New York Stock Exchange from the beginning of August 2012 but now this plan is temporarily postponed. M.U’s financial advisers are reconsidering a plan to issue shares after the Euro zone experienced another week of crisis, causing the stock market to fall.

The Glazer father and son bought M.U for £ 790 million in 2005. The transfer was strongly opposed by M.U fans. They use the banners in order to protest the arrival of Glazer. The reason MU fans are against the Glazer family is to own their team because the American businessman is in debt that his plan to issue shares of MU on the NYSE is to deal with bank debt.

This action has caused Man Utd fans to immediately react in a negative direction. The stock market is arguably the best solution the club has to write off debt, something the team has suffered since the Glazer family took over Old Trafford in 2005.