Plan Your Prosperity

An essential roadmap to financial security and independence in retirement In the newly revised second edition of Plan Your Prosperity: The Only Retirement Guide You’ll Ever Need, Starting Now—Whether You’re 22, 52 or 82, renowned investment adviser Ken Fisher delivers a practical and insightful new discussion of why all your investing should be done with an eye toward retirement. You’ll learn how to think about investing for retirement and learn to understand key concepts like time horizons, return expectations, and cash flow needs. You’ll discover how to select an appropriate retirement benchmark and how to determine how much you need to save each year to achieve your retirement goal. The book also includes: A comprehensive, workable strategy to develop your own retirement investing plan or work with a professional to do that while avoiding common pitfalls Techniques for avoiding harmful myths about retirement saving and investing, like complex and expensive annuities and other products Hands-on strategies for figuring out how much income you need to ensure the maintenance of your lifestyle in retirement Perfect for working people at any stage of their career who are interested in working toward financial security and independence, Plan Your Prosperity is a must-read roadmap to successful investing and saving.

Preface vii Acknowledgments xi Chapter 1: What? Me? Retire? 1 The Imagined Dichotomy 3 Two Goals and Some Non-Goals 4 Definitions and a Pencil 9 Start Immediately. Now. Right Away 13 Plan Your Prosperity 14 Chapter 2: My Goals Are What? 17 Why Is This So Hard? 20 Your Investing Goals, Simply 24 Potential Pitfall: Capital Preservation and Growth 27 Inflation’s Insidious Impact 30 Three-and-a-Half Percent, Compounded 35 Chapter 3: The Secret Code—Asset Allocation or Benchmark? 39 Benchmark: A Road Map and Measuring Stick 42 Picking a Benchmark 45 The Big Decision: Asset Allocation 46 Potential Pitfall: Age Doesn’t Equal Asset Allocation 50 Benchmark vs. Asset Allocation: What’s the Difference? 52 Chapter 4: Time Horizon—Longer Than You Think 63 Potential Pitfall: Ignoring Opportunity Cost 66 Time Horizon: What Is It? 68 Time Horizon and Benchmark 72 Chapter 5: What’s in a Return? 79 Growth Defined 83 The Past as a Guide? 87 Gordon Moore and Endless Innovation 97 Potential Pitfall: Unrealistic Expectations 100 Chapter 6: Getting That Cash Flow 105 Potential Pitfall: The All High-Dividend Portfolio 108 How Much Do You Need? 111 Monte Carlo: Not Just a Casino 116 Let’s Get Simulating 117 Chapter 7: Can I Get There? 129 How Much Do You Have? 132 A Savings Plan 135 Chapter 8: Putting It All Together 143 To Benchmark or Not to Benchmark 146 State Your Goals 148 Know Where You Are 149 Picking a Sound Benchmark 150 Finding Professional Help 153 Avoid Being a Fraud Victim 155 And You’re Off! 156 Appendix A: All Hail the Mighty Dow 157 Appendix B: Cash Flow vs. Expenses 167 Appendix C: Expense Categories 173 Appendix D: Personal Balance Sheet 177 Appendix E: Tax-Efficient Retirement Income Strategies 181 Notes 187 About the Authors 191 Index 193