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Investing for a Lifetime: Managing Wealth for the "New Normal" by Richard C. Marston

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CHAPTER 1 Introduction: Investing for a Lifetime

Investing for a lifetime is really hard. First, investors have to figure out a way to force themselves to save. It’s not easy because they have so many other things to do with their income. Savings often becomes just the residual after they have finished their spending. Yet savings are so essential if they are to enjoy a long retirement. This book won’t teach anyone how to save. But it will show them how essential it is to save throughout the working years.

What amount of savings is necessary? That depends primarily on how much an individual hopes to spend later on in retirement. Ideally, investors may want to maintain their current standard of living once they retire. It’s true that in retirement it may be possible to spend less than in their working years, but it’s best not to count on spending much less. Individuals vary widely in their savings level because their incomes differ so much. But savings rates, expressed as a percent of income, should not vary nearly as much. In practice they do. That’s because many Americans don’t save enough.

Second, investors have to figure out how to invest. That’s more complicated than it appears because there are so many pitfalls to successful investing. The most important pitfall is that investors can’t control themselves. They shift in and out of investments, and mostly at the wrong time. They chase after “hot” investments even though most investment fads end up poorly.

I believe that investing ...

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