From my perspective, the lack of investment and savings accumulation is the greatest void and looming problem out there. I venture to say that 80 to 90% of us are not saving enough for retirement if we are saving at all.

I believe it comes down to competition for your spending dollars. If you look back in history, prior to the ’50s and ’60s, We did not have the technical gadgets, phones, games, fast food, high dollar gourmet coffee, luxury cars, extremely large houses, and the like available to us as we do now. We were not barraged by advertisements on TV, at the service station, at the grocery and drug stores. Everywhere you look we are being sold . . . . hard! It is so easy to spend now and disregard the future. We are told to spend constantly, unconsciously, everywhere we turn. When the time to retire comes how many of us will be prepared?

When you are investing for retirement, there are a few distractions that can take you off track.

Investment Crush
You are stuck in one investment vehicle. You lack diversification. Play the field; never put all of your money in one investment. You need to properly allocate your investments. Whether you work for a company that contributes their stock to a retirement plan or have fixed income savings like CD’s and money market accounts, never load up all of your investments in only one location. Remember you don’t want to end up like an old Enron employee.

Suckers are for Grandkids
Don’t be a sucker – be wary of get rich quick schemes. If you look at the Forbes list of the world\’s wealthiest, you’ll never find one who became wealthy overnight. Unless your last name is Walton or Trump, you’re going to have to work for a living and save and invest. There are no real shortcuts that I have found. Believing a pipe dream is never going to get you where you want to go. And save the suckers for your grandkids.

A Special Note for Entrepreneurs, or Aspiring Entrepreneurs
First, know yourself. Some people are employees and some people are employers. There is no shame in not having an entrepreneur’s stomach. Only a small percentage of people are wired to handle the risk and uncertainty of owning a small business. Being an entrepreneur is not the American dream for everyone.

Second, know your industry. How many times in the past, say 20 years, while traveling through the countryside have you seen the miniature golf courses in every little town? I always asked myself, how could they possibly think they could make any money long term with a miniature golf course in a very small town. A year or two later I would drive through the same town and see weeds sprouting through the windmill, the bridge, the ninth hole.

It’s another example of somebody who had a windfall and decided to start a business. Maybe they spent it all or their retirement savings on the land, building, golf course, and the equipment. Maybe they didn’t know how to manage their cash or lost interest in the business or found it was too much work OR found out too late that there never was enough cash flow in that business to start with. They lost all of their capital and may have some debt leftover too and now must go back to work as an employee and start all over saving for retirement.

Finally, if you do own a business don’t let your business consume your retirement funds. Whenever the economy begins to slow down I find some of my clients raiding their IRA’s and other savings to keep the doors open for one or two months longer. If they still go out of business and they did spend out their IRA, they will have absolutely nothing left over. Their best option is to leave their IRA’s untouched. That way if they do go under the IRA’s are protected from creditors and they will still have their investments available to them for retirement. It is a really tough call for them to make and hard to do, but I have had people listen in the past and they did thank me later.

Between now and your retirement there are several tempting distractions to get you off course. But avoiding these distractions and working to overcome them will help you have the assets you need to reach the retirement you have dreamed of.


Corey N. Callaway

Investment Advisor Representative

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