Many planning to retire, find it is quite a job. Self-accountability is a big one to master, when previously, as we just did our job, we had it all done by superannuation professionals. But being cut loose from a life of working in structured and supported activity that brought money in, thrusts the burden to keep a superannuation nest egg productive to live on for the rest of your life.
For many in the regular workforce, the planning to get a nest egg is foregone outcome, taken care of by routine superannuation contributions. But when you retire all that stops and it then takes a great deal more to manage and keep it all healthy to live on.
That is not easy for many, who for the first time in their lives want to enjoy fruitful daily activities that also generally see their money going out. Enticements, providing so called well deserved but often high priced indulgent activities, are aimed at those transitioning. These often see the unwitting targeted with their savings reduced to poverty state very fast.
To manage that requires a brand new sets of skills to limit falling into those traps or conversely being frozen for fear of that, with a poverty lifestyle still the outcome.
My wife, who retired some years ago, with more time began to actively manage our investments. She did very well on day to day operational decisions of buy and sell. On the control side a spreadsheet did an okay job until she found it inadequate to track everything well.
So we moved to an all singing all dancing online software tool with an attached subscriber based advisory service. When our expensive subscriber system and its equally so advisors, who send robotic newsletters, on what was worth buy and sell, went out of business, it told its own story.
On reverting to a free yahoo tool, that we found it easy not only for positions reviews but for daily tracking and as a good resource in making decisions. We then learned for ourselves how to research and make our own buy and sell moves.
One thing we are thankful for was is taking an hour or so each quarter, for a structured discussion, That let us ensure we had an updated plan to keep in on track and growing. A night out for dinner, makes it a good the recipe to ensure we maintained our pledge.
Even though, like everyone investing for their own retirement plan, we could not avoid taking a beating on equities in the crashes, In our case with a spread blue chip at the core, it has all come back.
In essence our portfolio management is no different to a business. We work as a team to plan and review all the parts together. And operationally we have separate responsibility for executing the day to day.
It seems businesses, as opposed to personal investment, tactics and the associated risk attitudes may seem different. But as the aim the same at the pinnacle, the governance process is similar.
In a bull run with its upward sales and product demand being all forgiving, taking risks seems less of an issue. Conversely it can be quite fatal to learn by mistakes in a downturns especially for those highly geared financially.
In portfolio management, just like the underlying businesses this represents, it needs a review process to expose weaknesses and balance objectivity so it does not get off plan and out of its depth.
The business of managing an investments like any business too needs a transparent and objective review of various aspects of risk across the spectrum of key aspects and respective roles that manage them.
Shared resolve with inbuilt accountable control on portfolios, using a husband and wife team, an advisor or both, also makes it more fun. This Chairman of the Board process, where in our case my wife is the chairman, routinely stops and asks “What are we doing and does it fit the plan?”
When I finally do retire, it will hopefully be to just swap one activity for another, with the burden of re-learning how to manage money no different and not something new.