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The one woman said “financial literacy” and I would like to try.

I retired when I was quite young and this return, over a 20-year period, has provided enough to continue retirement.  Basically, over a twenty year period my home has gone up 5% a year and my IRA (it began as 401(k)s) has risen 10% a year.

At 10% a year $25,000 at age forty would probably be enough for a single person or couple to retire on.  Or, to put the amount you need to save a little differently, if you had a few good years of high earnings, company matching, or really great investment choices, it still would probably be enough.


The “probably” just above…  we may or may not get to that just yet.

Another woman in the video in the link at the top said “if you want the return of stocks you have to stay in the stock market.”

Tip #2.  Keep as much as you can in the market.  Of course it isn’t always going to go up but I’ll talk more about “trading” later.  You don’t know when it is going to go up and you can’t have gains unless you’re invested.  I’ll talk about where in just a bit.

The stock market, over the long term, is going to go up and with an IRA you have complete control over the money (i.e., you can put it in appropriate stock investments).  That and the power of tax free or tax deferred growth is enough.


Total return means let it sit.  Dividends reinvested is better, I think, than compounded annually?


Rule #1.  Save what you can in an IRA or 401k.  There is no need to look at it as retirement.

It is because of “the magic of compound returns.”  The growth is tax free.  The contribution is probably tax deductible.  Some employers may also provide significant 401k matching.

How to be a good investor and more about financial literacy in Part 2.