Begin Investing With The End In Mind: Retirement Income

In the 19th episode of the Retirement Explained show, we’re talking about the importance of keeping the end in mind when investing; retirement income.

Retirement income can be broken down into three key areas: guaranteed sources of income (think Social Security, Pensions, Annuities, etc), non guaranteed sources of income (think investment real estate properties, business income, royalties, etc), and portfolio sources of income (think money you’ve saved in your 401k, IRA, Roth IRA, etc).

I’ve spent the last couple of episodes talking about some of the ways psychology and investing meet and we think that remembering that your goal is to make it to retirement and to stay in retirement is important, it will help you to wash out a lot of the noise that comes with stock markets and investing.

There is a game called Go that I wanted a documentary on where the world’s best Go player played an advanced AI from a subsidiary of Google. What I found really interesting is that the AI wasn’t trying to win each match by ridiculous margins, it was trying to win by one move.

Humans have a tendency of valuing victories that have great margins attached to them. Somehow, we think that a basketball game ending with a score of 100-70 is a better win than 100-99. You don’t need to crush markets, you just need to do as much as you need so that you can replace your work income after you stop working. That is a very freeing thought. It will allow you to relax, to a large extent, and count on your retirement plan and investment strategy to navigate through keeping you from running out of money.

Enjoy.

-Brian