DON’T PANIC: INVESTORS ARE CHANGING THE WORLD FOR THE GOOD

#investors #stockmarket #socialproblems #purposeoriented
It’s tough to love the stock market with the volatility we’ve seen in recent weeks.
Certainly, both the market and the government have tarnished reputations, as New York Times columnist David Brooks recently pointed out.
But there are a few big-money types who have tried to use the market to solve social problems. Brooks writes that these investors have opposable minds. They are part profit-oriented – nothing is done in the markets without someone making money – and part purpose-oriented.
These investors have created organizations that look a little like businesses, a little like a social-service providers and a little like charities – or some mixture of the three, Brooks writes. His column was published in July 2015 in The Atlanta Journal-Constitution.
Ben & Jerry’s ice cream led the first wave in this sector, Brooks says, but now you’ve got a burgeoning array of social-capitalist tools to address problems. They range from B Corporations like Warby Parker, which gives free glasses to the poor, to social impact bonds, Brooks writes.
Brooks cites a phenomenon is called impact investing, which seeks out companies that are intentionally designed to both make a profit and provide a measurable and accountable social good.
We all would like to put our hard-earned savings into companies that do good. But as a small saver, or one who is diligently saving a small portion of what he or she earns toward retirement, one has to focus on getting the most growth and income from his contributions.
For these folks, gyrations in the market, like the ones we’ve seen recently, cause great consternation. But most experts in the field would advise them not to panic. Usually, what goes down goes back up, as we have seen. You see, those with some cushion in their accounts, and with good advisers, will have raised cash by selling some of the underperforming investments, so they can use that cash to buy some great stocks cheaply when the overall market tumbles.
Remember that when the market reacts this way, an individual stock is just following the market. It does not mean the companies, or their products, are no good. Those good companies will come back because investors see discount shopping opportunities in tumbling markets.
So, if you are small, careful investor, who has put his or her money into good companies or good funds, relax. When the market drops, it’s usually a temporary glitch. Stick to your original plan, and follow the advice of the person you trust. If it helps, don’t watch the news – at least the parts about how the market is doing. If you know that your savings and investment plans are well-thought-out, cringe if you must at what’s going on, but breathe easily.
Someday, you may have enough money to make a real impact on a global problem. For now, though, secure your own nest egg little by little, and don’t let the market gyrations get you down.
Of course, there are many other worthwhile things you can do to enhance your wealth. For one of the best, visit www.bign.com/pbilodeau. If you are thinking of getting a second, part-time job to throw a little bit more toward your retirement, think a little outside the box. You just might find a way to better utilize any free time you would devote to a second job, and have a lot more fun than a second job would be.
It’s a marvelous thing that some smart, rich folks are looking for ways to solve the globe’s problems with their own money. We all may wish to be in that situation, but, for those who are not rich, it’s best to work on enhancing your own wealth FIRST, and help others do the same.
When, and only when, you’ve done that, by all means feel free to make an impact on the world. Work hard, play hard, save and invest hard. Help others, and you will be enriched. Once enriched, keep helping others. It will bring you great joy.
Peter

#retirement bust YOU THOUGHT YOU WERE ALL SET, BUT …

History may judge the years 2007 to 2012, give or take a few years on either end, as the retirement bust years.
People not only lost jobs just before they were about to retire, but also their pensions shrank.
People who thought they were all set for retirement, with a nice, promised pension, got a rude awakening. The monthly benefit on their retirement documentation shrunk considerably.
It was a combination of the economy tanking, and companies contributing less, if anything at all, to their retirement accounts. Added to that, the stock market , which supports most retirement accounts, took a big tumble. The bottom fell out of thenNet worth of everything – companies and individuals.
Even the savviest investor could not prevent what happened in those years, short of taking his money out of the financial markets ahead of time. Any investor who withdraws completely is probably not that savvy. Savvy investors take the ups and downs of the market as an expectation, though no one expected what happened in those years.
So the question becomes not whom to blame for the mess. There’s plenty of blame to be spread around among Wall Street, government and, yes, individual decisions. But blaming wastes energy that should be focused on recovery.
We all have had to rethink retirement. Some of us have told ourselves we have to work until we die. Some of those folks may have other alternatives, but they are not seeing them.
Certainly, some of us have said we have to work past the age we thought we were going to retire. That’s fine if you are in good health personally. But don’t think for a minute that your job will be there for as long as you want it. Companies reorganize drastically and often. The younger generation of workers, when they retire, may brag about how many reorgs they survived, just as the older generation is thankful for the steady work they had.
Speaking of young people, they may want to think twice about ASSUMING they will survive every reorg. It’s great to believe, or even be told, how good you are at what you do and how your employer cannot possibly live without you.
But, you can’t always see into the future. The world changes quickly. Companies are constantly looking at ways to work more efficiently. Lots of good people have lost jobs they expected to have for as long as they wanted to work.
How do we avoid the instinct to cast blame and rethink retirement? First, work on you. Make sure you have a good and optimistic attitude. Remember, those who innovate are usually optimists. It’s tough to see the future properly without believing that all, eventually, will be good.
Secondly, think about the things you DON’T like to do – things that make you “uncomfortable,” or so you believe. Give them a try. Then, try them again, and again etc. This will take you out of your comfort zone, where you may have to go, eventually, to survive.
Thirdly, don’t be afraid to look at something different. The people who lament that they thought they were all set, are many of the same people who tell themselves, “oh, I couldn’t possibly do THAT!”
There are many ways to fight this. For one of the best, visit www.bign.com/pbilodeau. If you leave your comfort zone to look at something new, you may lose the instinct to cast blame for your troubles, and find a way out.
This may not be your dad’s way to retire, but the world has changed. We need to be part of our own solutions, rather than focusing on how we got into trouble.
Think of it this way: the federal government bails out some companies because innocent people would get hurt if they didn’t. But they won’t bail you out as an individual if you get hurt. You have to bail yourself out. You might not only bail yourself out, but prosper in many ways in the process.
Peter