A number of IPOs are scheduled in the upcoming weeks and this always grabs the attention of investors. So we’ll talk about our approach to IPOs and how Joel feels about them. Plus, we have three mailbag questions covering disability payments, investing extra money, and losing trust in financial advisors.
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What You’ll Learn:
There’s always a lot of excitement surrounding Initial Public Offerings for major companies, and people are generally curious about investing in these early opportunities. With a few recognizable companies scheduled for IPOs in the immediate future, we’ve gotten a number of questions about whether it’s a good idea.
So we wanted to spend some time on the podcast discussing this investment. Our approach to IPOs is to treat that as a really long-term play. Entering into that investment with the idea of a quick return can backfire. For every Facebook, there are so many other companies that don’t end up working out. That’s especially true in the technology space, where many companies end up getting passed by competitors or sell their proprietary technology.
The bottom line is that it’s a tough game to play. If you have take care of your retirement planning and make sure needs are covered and there’s money left over, then that’s what we recommend using. Once you get to that point, Joel will even talk to you about the offerings he’s thinking about investing in.
Now let’s turn to three questions we’ve received on the podcast recently. Each of these asks about different topics that could also impact you so hopefully you learn something from our answers.
The first question comes in from a teacher who started a side job during 2020 due to the pandemic and it’s going really well. They plan to retire in five years and want to invest that extra money while they have the opportunity.
What you should consider is who that extra money is for. Is it for you, grandkids, nieces and nephews? Or is it for travel in retirement? If that money can be left alone for at least five years, we should probably take some risk with that money. A reasonable rate of return is 5-7% on your longer-term money, and to do that you need some type of exposure to the market or other businesses.
The next question comes in from a veteran who is receiving disability from injuries suffered while serving. First off, thank you for that service. We greatly appreciate it.
Now to address the question of whether they should get a job and forego the disability payment. It’s not an easy choice, but you have to weigh the loss of the disability versus what you could earn somewhere else. Sometimes that money from a job could be a higher amount. Plus there’s the value of working. For a lot of people, working makes them feel good so they’re willing to give up that disability. It’s a tough spot but one that you should have a conversation about to decide how you feel about these considerations.
Our last question today comes in from someone who was burned by a financial advisor more than 20 years ago but is considering working with one again. We know it’s hard to jump back in if you’ve had a negative experience of any sort, especially if fraud is involved. Our suggestion would be to sit down with an advisor and see what they have to offer. If you’re truly concerned, you can have the advisor build a plan for you for a fee and then you can go on your own way. You don’t have you’re your money with the advisor. Instead, you can invest it on your own based on the plan. That’s an option as well.
As with all of these planning decisions, we offer you the opportunity to set up a complimentary Money Map Retirement Review so reach out if you’re interested.
[0:19] – Upcoming IPOs
[2:32] – Mailbag Question: I’m a teacher and plan to retire in the next five years but this year’s schedule provided me the opportunity to start a side business. It’s going well so what should I invest it in?
[5:05] – Mailbag Question: I’m a retired veteran living off my military pension and disability. If I find a job, I’d lose the disability. Is it worth finding a job to lose that?
[6:44] – Mailbag Question: I once worked with financial advisor that ended up in jail for securities fraud. I haven’t worked with an advisor in more than 20 years because I have trouble trusting people in the industry. I could use the help now as my situation has gotten more complicated. How can I overcome the trust issues?
[8:23] – Get a Money Map retirement review for yourself
Thanks for listening to this episode. We’ll be back again next week for another show.
“If they have extra money after they’ve figured out what they need to create their retirement income, then by all means we can have that fun discussion. And I’ll even talk to people about the initial public offerings I invest in.”– Joel Johnson, Money Wisdom Podcast
3 Related Items & Resources:
- What Does Your Retirement Dream Look Like?
- 3 Worlds of Money + Market Update
- Mailbag: Variable Annuities, Flipping Houses, and Mortgage Debt
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