The Big Retirement Risk Running Out of Money Before You Run Out of Time eBook Erin Botsford
Download As PDF : The Big Retirement Risk Running Out of Money Before You Run Out of Time eBook Erin Botsford 
Are you retired or preparing to retire? Is there a chance that your retirement lifestyle could be negatively impacted by fluctuations in the stock market? Are you relying on some magic number for financial security? Do you ever worry about running out of money?
If the answer to any of these questions is yes, this book is written for you. Given the uncertainties that exist today – market risk, inflation risk and longevity, not to mention the murky future of social security and medicare – everyone is concerned and everyone wants to know what to do.
In The Big Retirement Risk Running out of Money Before You Run out of Time, author Erin Botsford shows you an entirely new way to think about money, investing and retirement planning called “Lifestyle Driven Investing.™” By exposing some of the common myths of Wall Street and explaining why the traditional methods of investing may not work in the days ahead, she will show you how to craft an investment strategy to help protect your retirement lifestyle in good economic times and bad.
Erin’s journey, rising from a life of poverty and overcoming enormous adversity to becoming one of America’s Top Financial Planners, gives her the insight and perspective to guide you through the current economic landscape. With decades of wisdom, Erin’s mission is to share her knowledge and experience so you can avoid The Big Retirement Risk Running out of Money Before You Run Out of Time.
The Big Retirement Risk Running Out of Money Before You Run Out of Time eBook Erin Botsford
The financial planning industry has no shortage of voices offering advice. Unfortunately, they all tend to say the same thing, and it's not what most investors need or want. In fact, it's often the exact opposite.Above all, most investors want security. They want to know that the nest egg they've spent a lifetime building will be there when they need it. Somewhere along the way, the financial planning industry lost sight of this and turned the profession into something resembling a Las Vegas casino. The retirement hopes of millions of Americans depend on the stock market rising ever higher. Yes, the same stock market that lost half of its value during the 2007-2009 meltdown and had negative returns after inflation over the past decade.
Erin Botsford is a refreshing voice of prudent common sense, and her new book The Big Retirement Risk should be required reading for every financial planner in America. Clients would be well served if their planner used it as an instruction manual. Individual investors--particularly the 77 million American Baby Boomers fast approaching retirement--will also find its insights valuable.
If there is one dominating focus in Erin Botsford's financial practice, it is risk. The identification and elimination of risk is something of an obsession for Botsford, and this is not merely an academic exercise for her. As a woman whose early life was marked by tragedy, she has the instincts of a survivor and does a fine job of translating those instincts into actionable financial advice.
The "big retirement risk" that Botsford warns against is running out of money before you run out of time, and Botsford's perspective here is unique. As a young girl, she witnessed it happen to her own family. With the death of her father at the age of 50, Botsford's family saw her family's comfortable middle-class lifestyle reduced to one of poverty and constant worry. Tragedy struck a second time when, as a teenager, Botsford was in an automobile accident in which another motorist died. Faced with mounting legal bills, her family nearly lost their home.
As if these setbacks were not enough, in her early 20s Botsford got firsthand experience with investment risk. After winning a modest windfall as a contestant on Wheel of Fortune, she trusted her newfound wealth to a stockbroker. In short order, the broker lost it all by taking risks that were woefully inappropriate.
Suffice it to say, The Big Retirement Risk is written by an author who knows a thing or two about risk and about the disastrous effects that a lack of planning can have on a family. Proper planning can never totally eliminate risk, but it can give you the means to manage it.
Botsford uses the opening chapters to explode a number of popular myths that dominate the investment profession (the stock market always goes up over time, diversification and asset allocation reduce risk, your net worth determines your lifestyle, etc.) and instead takes an approach that is a little reminiscent of Rich Dad Poor Dad author Robert Kiyosaki. She focuses on the generation of income, correctly pointing out that "Your net worth has no relevance to your lifestyle if it isn't in a form that can quickly be converted to cash to provide for your everyday living expenses."
Well said, Erin.
In later chapters, Botsford outlines the investments and strategies employed in her financial practice, including bonds, real estate, options strategies, and investment products that offer guaranteed returns and focuses on her trademarked Lifestyle-Driven Investing. Her focus throughout is not on "beating the market" or on generating some arbitrary annual return. Instead, her focus is on the preservation of her clients' lifestyles by guaranteeing sufficient and diverse income streams.
The Big Retirement Risk is a welcome addition to the existing literature on investing and financial planning, and fills in several gaps that sorely needed to be filled. Our compliments to Erin Botsford on a job well done.
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The Big Retirement Risk Running Out of Money Before You Run Out of Time eBook Erin Botsford Reviews
I didn't know what to expect when picking up this book on a whim. And I almost stopped reading in the first chapter when the author laid claim to creating something she calls Lifestyle Driven Investing. This is the basic goals-based approach to investing, which is already called Liability Driven Investing when used by pension funds. Changing the word liability to lifestyle is a good idea, because while pension funds think of their future payment promises as corporate liabilities, individuals also have liabilities which are less natural for them to identify as such. These liabilities are their future spending needs to support their lifestyle. Investing, especially in retirement, shouldn't be driven by maximizing risk-adjusted returns over a single time period, but by what can best help you to secure your future spending needs.
That being said, I'm glad I finished the book. She did cite other resources, and she does seem to be well-intentioned and not just another snake oil salesperson claiming credit for others' work.
What she describes in the book is a good example of the safety-first approach to retirement planning. As she is a practicing financial planner, it is nice to be able to add another name to the list of planners using the safety-first approach.
Usually, the safety-first approach is criticized as being too academic and to unrealistic for the real world. The book doesn't really contain anything new, but it is a nice overview and introduction to safety-first ideas.
Erin does a good job explaining the safety-first approach to readers who may be unfamiliar with the concept, and whose knowledge about retirement planning may be based mostly on concepts like the 4% rule from the diametrically opposed school of thought of retirement income the probability-based approach.
First she explains four Wall Street myths, which include that the stock market always goes up in the long-term, that the modern portfolio theory concepts of diversification and asset allocation of the keys to retirement success, that financial service firms provide a broader range of investment options, and that it is net worth which determines one's lifestyle in retirement.
The book then takes an excursion about the relationship between investment returns and demographic trends and also the relationship between demography in the social welfare system. It's a nice overview, but perhaps not all that relevant to the overall purpose of the book.
Next, she returns to safety first principles by describing how one's lifestyle spending can be separated into different categories. She identifies four categories in her house of security. Needs, wants, likes, and wishes. Here she is talking directly about the spending, rather than the assets which will cover each of those spending categories, but the overall concept is the same. This is because different assets are used to meet the different spending categories.
For spending needs, she recommends using what she calls lifestyle investments. These are investments which produce income, and which must be considered either safe or predictable or guaranteed. She also suggests that this assets be in a legal entity that will provide protection in the event of a lawsuit. This is the basic concept of goals-based investing in which you first build a floor to meet basic needs. Investment categories can include bonds and annuities. She describes a variety of different types of annuities, and I think she did the good job in explaining advantages and disadvantages of different approaches.
For wants and likes, she suggests hybrid investments. These are investments which would generally provide an income that is not safe or guaranteed. Examples include preferred stock, publicly traded REITs, covered calls, master limited partnerships, dividend stocks, etc.
Finally, once needs, likes, and wants are met, more volatile investments can be used which aim at growth to achieve one's wishes.
Again, these are all basic tenants of the safety first school of thought, which provides a stark contrast to probability-based notions like failure rates and "safe" withdrawal rates. Anyone seeking a basic introduction to this school of thought could be well served by reading this book.
The financial planning industry has no shortage of voices offering advice. Unfortunately, they all tend to say the same thing, and it's not what most investors need or want. In fact, it's often the exact opposite.
Above all, most investors want security. They want to know that the nest egg they've spent a lifetime building will be there when they need it. Somewhere along the way, the financial planning industry lost sight of this and turned the profession into something resembling a Las Vegas casino. The retirement hopes of millions of Americans depend on the stock market rising ever higher. Yes, the same stock market that lost half of its value during the 2007-2009 meltdown and had negative returns after inflation over the past decade.
Erin Botsford is a refreshing voice of prudent common sense, and her new book The Big Retirement Risk should be required reading for every financial planner in America. Clients would be well served if their planner used it as an instruction manual. Individual investors--particularly the 77 million American Baby Boomers fast approaching retirement--will also find its insights valuable.
If there is one dominating focus in Erin Botsford's financial practice, it is risk. The identification and elimination of risk is something of an obsession for Botsford, and this is not merely an academic exercise for her. As a woman whose early life was marked by tragedy, she has the instincts of a survivor and does a fine job of translating those instincts into actionable financial advice.
The "big retirement risk" that Botsford warns against is running out of money before you run out of time, and Botsford's perspective here is unique. As a young girl, she witnessed it happen to her own family. With the death of her father at the age of 50, Botsford's family saw her family's comfortable middle-class lifestyle reduced to one of poverty and constant worry. Tragedy struck a second time when, as a teenager, Botsford was in an automobile accident in which another motorist died. Faced with mounting legal bills, her family nearly lost their home.
As if these setbacks were not enough, in her early 20s Botsford got firsthand experience with investment risk. After winning a modest windfall as a contestant on Wheel of Fortune, she trusted her newfound wealth to a stockbroker. In short order, the broker lost it all by taking risks that were woefully inappropriate.
Suffice it to say, The Big Retirement Risk is written by an author who knows a thing or two about risk and about the disastrous effects that a lack of planning can have on a family. Proper planning can never totally eliminate risk, but it can give you the means to manage it.
Botsford uses the opening chapters to explode a number of popular myths that dominate the investment profession (the stock market always goes up over time, diversification and asset allocation reduce risk, your net worth determines your lifestyle, etc.) and instead takes an approach that is a little reminiscent of Rich Dad Poor Dad author Robert Kiyosaki. She focuses on the generation of income, correctly pointing out that "Your net worth has no relevance to your lifestyle if it isn't in a form that can quickly be converted to cash to provide for your everyday living expenses."
Well said, Erin.
In later chapters, Botsford outlines the investments and strategies employed in her financial practice, including bonds, real estate, options strategies, and investment products that offer guaranteed returns and focuses on her trademarked Lifestyle-Driven Investing. Her focus throughout is not on "beating the market" or on generating some arbitrary annual return. Instead, her focus is on the preservation of her clients' lifestyles by guaranteeing sufficient and diverse income streams.
The Big Retirement Risk is a welcome addition to the existing literature on investing and financial planning, and fills in several gaps that sorely needed to be filled. Our compliments to Erin Botsford on a job well done.
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