Dear DTA,
I’m an 81-year-old widow. I’ve been alone for almost 18 years. I have some stock, savings, and a home that’s paid off. But I worry about losing my Social Security, or Medicare being reduced or taken away. I have a financial advisor who manages my funds. I guess I don’t feel secure about my situation. What do you suggest?
-Mary F.
Hi, Mary.
It’s wonderful to hear from you.
First, congrats on your octogenarian status. A long, well-lived life should be the goal of anyone.
Now, these are supposed to be your golden years. But it can’t be too relaxing or enjoyable if you’re actually worried about money.
So let’s see what we can do to help alleviate some of your worries.
You may or may not already be aware of this, but you’re quite possibly (based on the limited information I have) in a great financial spot.
This is relative to most retirees.
Having a paid-off home is great.
And you also have savings and productive assets.
You’d be surprised how many of your fellow retirees aren’t so financially comfortable.
Many people are having to take up part-time jobs in their 60s and 70s just to get by. Keep that in mind.
You say you have a financial advisor. That’s not necessarily a bad thing at all, but I would strongly recommend you stay on top of all of your financial dealings.
I commonly read troubled stories of celebrities and athletes who are suddenly shocked to find out they’re broke because their team of trusted advisors steered them wrong over the course of a highly-paid career.
I’m not saying there’s anything wrong with your advisor (or your decision to have an advisor), but nobody cares about your money more than you do.
With that in mind, knowledge is power.
Warren Buffett is arguably the greatest investor of all time, managing Berkshire Hathaway Inc. (BRK.B) and the company’s $200+ billion common stock portfolio.
He’s a fellow octogenarian. He actually recently turned 88 years old.
You know what he does every weekday?
He wakes up, drives down to Berkshire’s headquarters, and spends hours per day reading.
This is a guy who has already accumulated a ton of knowledge over the course of his life. Rightly so, he’s stated on many occasions that knowledge builds up, like compound interest.
Yet he’s reading and educating himself every day, humbly admitting that even he still has a lot to learn.
If he’s admitting that, just think about how us mere mortals should feel about educating ourselves and becoming more aware of what our money is doing.
Indeed, this is why this site exists – and why I’m writing these very words to you.
We want to educate our readers so that they’re more informed.
And that’s why I’m going to share some wonderful resources to help you toward that end.
In regard to your fear over your SS benefits, you should take the time to read this Kiplinger interview with Stephen Goss, the Chief Actuary at the Social Security Administration.
The takeaway: your benefits aren’t going anywhere, anytime soon, Mary.
Once you move past worrying about that, you should allocate any concerns you have in the tank toward making sure your money is being managed correctly.
And in order to accomplish this, you’ll want to further educate yourself on money and investing.
The reason why I’m tasked with writing these responses to our readers is because I’ve picked up a thing or two about managing money, investing, and even retirement.
The only difference between my idea of retirement and most people’s idea of retirement is, my retirement is about 30 years early – I became financially independent and retired at just 33 years old.
I’m not telling you this to brag.
I’m only telling you this to show you that we have our interests aligned; I also want to make sure my assets and money lasts the duration of a lengthy retirement.
The investment strategy I’ve personally chosen (which could work for just about anyone else, including you) toward that end is: dividend growth investing.
This strategy basically involves buying up high-quality, blue-chip stocks that reward their shareholders with reliable and growing cash dividend payments.
I spent six years of my life (starting at 27 and mostly culminating at 33) aggressively investing in dividend growth stocks so that I could retire as quickly as possible.
My capital was allocated toward dividend growth stocks like those you’ll find on the Dividend Champions, Contenders, and Challengers list – a collection of data on almost 900 US-listed stocks that have raised their dividends each year for at least the last five consecutive years.
The result of my steadfast dedication toward this strategy?
A real-life and real-money dividend growth stock portfolio that’s valued at well into the six figures.
I’ve aptly named my portfolio the FIRE Fund, and it generates the five-figure and growing passive income I need to sustain my life (without needing a job) in my mid-30s.
You may already have some of these stocks in your portfolio, Mary. Or maybe you don’t.
Either way, it would behoove you to be as informed as possible about this strategy just so that you know of your options when you and your advisor chat about your finances.
Fellow contributor Dave Van Knapp put together an excellent series of articles that holistically describe what this strategy is, why it’s so great, and how it works.
These articles are archived as his Dividend Growth Investing Lessons.
Of course, it’s one thing to know about investing. It’s quite another to apply concepts in real life.
That’s where the Undervalued Dividend Growth Stock of the Week series comes in.
This is a series that I personally helm, whereby I highlight a compelling high-quality dividend growth stock investment idea for the community after going through fundamental analysis, qualitative scrutiny, risk assessment, and valuation.
Now, not every stock in that series makes sense for all investors at all times.
Indeed, if I were in my 80s, I’d be gravitating toward higher-yielding securities due to the nature of the time value of money.
But if you’re armed with some of this knowledge, you can oversee your advisor with far more effectiveness. And you’ll worry less, which should allow you enjoy those golden years a bit more.
Time is always of the essence, Mary.
And there’s no time like today to better arm yourself with knowledge so that you can be more informed and less worried.
I wish you luck and success.
Jason Fieber
Nvidia's Secret Partner... This Is The New AI Chip Powerhouse [sponsor]I bet you've never heard of it... but this newly public company is set to become key to Nvidia's seat on the AI throne. And for now... you can get in while it's still cheap. Details Here! Find Out What It Is Right Here.
Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.