Fear and Greed 2
As a Boomer looking forward to retirement, like me, I’m sure you’ve noticed that the news is full of articles and pundits guessing that stock investments will be showing lower returns for the average investor over the next few years. Apparently things won’t be much better for the average speculator either. The risk premium is projected to be about 2%. Not all that swell.
If you believe those forecasts then that raises a question. How’s an investor going to get those 8 and 10 percent returns on their money while maintaining acceptable levels of risk?
You have to be something other than a stock holder. You have to take your capital to work rather then just working your capital. More bluntly, invest in a business where you have hands on involvement. Buy a piece of an existing business where you can work too. Start a home based business where you can work part time. The theme here is that both you and some of your money are involved in making money by working.
The personal involvement is important. It reduces the risk to your invested capital, gives you intimate knowledge about your investment, and it allows you an opportunity to apply you talents and intelligence to your financial situation. These are all very positive things.
Entrepreneurship is risky, but it appears to be a decent way to get a better return on your capital that as a passive investor. Still you have to mitigate the risk. Involvement is the best form of mitigation. Full time participation in a business situation is the most desirable from an investment point of view, but a part time presence is essential for an appropriate return. Full or part time it’s your decision based on your needs, desires and lifestyle.
Another way to keep the risk down is to go into a venture with other investors. This probably will reduce your return, but that’s the way it works. There are trade-offs when you work with others. You get to deal with their fear and greed as well as your own. The problems usually arise when yours gets badly out of sync with theirs. Goals change and then you have problems. Nothing is problem free.
Now, a specific situation may go down the drain regardless of your efforts to control the risk. It can happen with any investment without regard to how savvy you may be. Is entrepreneurship as a semi-retired Boomer a panacea for low investment returns? No, it’s just a strategy to get a greater return on your money while controlling the risk. It’s up to you.
Related Stories
POSTED IN: Being A Boomer, Finance, Jobs, Mindset, Work
0 opinions for Fear and Greed 2
No one has left a comment yet. You know what this means, right? You could be first!
Have an opinion? Leave a comment: