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John Healy
Hi, I’m John Healy, chief investment officer of Healy Wealth Management. And today I want to talk to you about something we’ve been mentioning to clients about retirement and the similarities, an analogy, if you will, with rocket launches. So the whole idea of saving for retirement and reaching altitude so that you have no chance or very little chance of falling down to Earth again, is very similar, I think, to the whole analogy of the whole retirement planning process.
I was alive at the time during the 60s. It was quite young, but I do remember when Neil Armstrong stepped onto the moon. I’m that old, but you don’t want to keep working if you don’t have to, and you’re older, and particularly as you get older, it gets harder to get out of bed. And the aches and pains and just health is harder to keep working and being productive and saving.
So you really do want to plan for retirement. Really. The fuel is a big issue, and I’d like to just kind of share that as an analogy. When you’re starting your rocket, the key is how much fuel do you have, right. How much money, how much fuel. Then there’s how hard do you run the engine? How much risk do you take when you’re investing?
That’s really the throttle. When the earlier you start, you want to leave the ground as soon as you can. And that’s really the first step. It’s the launch. It begins to retirement. When you put that first dollar away, then you keep adding fuel along the way. So you’ve got lift off that first time you put money in the bank, and then as you save and invest, you’re adding fuel.
All it really is, is just good businesses that you’re buying stocks, good stocks, good businesses that are profitable don’t have much debt. That thrust may be spotty because it’s just the market’s going to give you that thrust. But in the long run it’s going to keep on giving it to you. Whereas more of a speculative type investment it’s tempting because it’s higher octane, right.
It’s going to give you probably more thrust, but you really don’t know how long it’s going to last. So it can really boost you ahead. But then it’s gone forever. So that’s more of a speculative type fuel. You could lose altitude, right. But I think as you’re just getting started, you know, if you’re young and you’re saving, you’re really off the ground, but you’re still moving slow, you’re just trying to get some momentum, you’re trying to start accelerating.
But it’s so slow at first you don’t really feel it and it can be discouraging. There will be a point where I like to think, you clear the tower with your rocket. You you’re at a point where the dollar amounts become noticeable, they become meaningful. And I think today 200,000 for most people in the US. So let’s say you’re making it, you know, 10% gain one year.
That’s $20,000 on 200. So that that feels good. Real good. You know, if you reduce the throttle, you know, you reach enough height, you’re getting close enough where you’re saying, I’m really not reached sufficient enough height to where I can keep just this, this downside with the full throttle, I need to reduce my risk and reduce the throttle, if you will.
That also means you’re not going to fall as much. You’re kind of partially locking in your gains. You’re not going to see as much lift, but you’re going to not see as much decline either. So most people there launch. They start to level off as they get closer to retirement. If you have any questions or would like to share your personal situation with us, we can kind of tell you how it looks for you and what kind of risk you might need right now based on your circumstance.
So like and subscribe to our channel and if you have any questions again, please don’t hesitate to reach out. I’m John Healy, Healy wealth management. Thank you.