Swinging for the Fences
There is a time and a place for everything. Swinging for the fences with your finances is no exception. Let’s face it, if you live your entire life saving for retirement from a $50,000 salary, then you will retire with a $50,000 salary. And that is IF you are a saint your entire life and live by a strict spend less than you make philosophy.
By all means I do not want to give the impression that traditional financial advise does not apply. Everyone should be saving in their 401Ks and Roth IRAs. Those investments should be safe ones that have a track record for success such as low expense ratio index funds.
However, you need to reach for higher returns if you want to give your comfortable retirement a splash of luxury. The S&P 500 in the last five years has increased a total of 54.44%, from 898.81 to 1,388.17 today.
Five years ago, Exxon-Mobile (xom) was at $34.79. Today it is at $94.26, up 170.93%.
Five years ago, Aetna (aet) was at $12.80. Today it is at $42.14, up 229.21%.
Five years ago, Apple (aapl) was at $8.97. Today it is at $168.16, up 1,774%. A $10,000 investment five years ago would be $187,400 today.
See the trend? These are all good companies with good stocks. None are in any way obscure either. You may actually use their products in your daily life. Five years ago Apple had already introduced the iPod. It did not take a financial genius to see all of the new white ear buds popping up everywhere you went. All you needed was a little vision and perhaps, a bit of luck.
And if you lose it all? Who cares. You went big and it just wasn’t to be. You won’t ever be worse off if it is money you otherwise wouldn’t miss. You still have your 401K and your Roth which grows and grows with steady long term gains. They are your safety net.
But what if you can find the next blockbuster stock. The only thing that is guaranteed is that you won’t find it if you never try. Remember that some of the best stocks for the next five to ten years may be right under our noses today.
After properly funding your 401K and Roth IRA, if you find yourself with a few dollars more in your investment pool, consider winding up and taking a big swing. In a few years, you may be glad you did.