FINANCIAL FOCUS
Be Aware of Risks of Not
Investing
You’ve no doubt heard about the risks associated with
investing. This investment carries this type of risk, while that
investment carries another one. And it is certainly true that all
investments do involve some form of risk. But what about not
investing? Isn’t there some risk associated with that, too?
In fact, by staying on the investment sidelines, or at least
by avoiding long-term, growth-oriented investments, you may
incur several risks. Here are some to consider:
• You might not keep up with inflation. If you put all your
money under the proverbial “mattress,” or, more realistically,
you keep it all in “cash” instruments and very short-term
investments, you might think you are “playing it safe.” After all,
you might reason, your principal is protected, so even if you
don’t really make any money, you’re not losing it, either. But
that’s not strictly true, because if your money is in investment
vehicles that don’t even keep up with inflation, you can lose
ground. In fact, even at a relatively mild three percent annual
inflation rate, your purchasing power will decline by about half
in just 25 years.
• You might outlive your money. For a 65-year-old couple,
there’s a 50 percent chance that one spouse will live past age
90, according to the Society of Actuaries. This statistic suggests
that you may need your investments to help provide enough
income to sustain you for two, or even three, decades in
retirement.
• You might not be able to maintain your financial
independence. Even if you don’t totally run out of money,
you could end up scrimping by — or, even worse, you
could become somewhat dependent on your grown children
for financial assistance. For most people, this prospect
is unacceptable. Consequently, you’ll want to make
appropriate financial decisions to help maintain your financial
independence.
• You might not be able to retire on your terms. You would
probably like to decide when you retire and how you’ll retire
— that is, what sort of lifestyle you’ll pursue during retirement.
But both these choices may be taken out of your hands if you
haven’t invested enough to retire on your own terms.
• You might not be able to leave the type of legacy you
desire. Like most people, you would probably like to be able to
leave something behind to your family and to those charitable
organizations you support. You can help create this type of
legacy through the appropriate legal vehicles — i.e., a will,
a living trust and so on — but you’ll still need to fund these
mechanisms somehow. And that means you’ll need to draw on
all your financial assets, including your investments.
Work with your financial advisor to determine the
mixture of growth and income investments you need during
your working years and as you move toward retirement to help
you meet your retirement goals. However you do it, get into the
habit of investing, and never lose it — because the risks of not
investing are just too great.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Having More Retirement Accounts is
Not the Same as Having More Money.
When it comes to the number of retirement accounts you
have, the saying “more is better” is not necessarily true. In
fact, if you hold multiple accounts with various brokers, it
can be difficult to keep track of your investments and to see
if you’re properly diversified.* At the very least, multiple
accounts usually mean multiple fees.
Bringing your accounts to Edward Jones could help solve all
that. Plus, one statement can make it easier to see if you’re
moving toward your goals.
*Diversification does not guarantee a profit or protect against loss.
Financial Advisor
.
5189 E I-20 Suite 103
Willow Park, TX 76087
817-441-9439
www.edwardjones.com
Member SIPC
PA R K E R C O U N T Y T O D AY
Mike Smith
AUGUST 2015
To learn why consolidating your retirement
accounts to Edward Jones makes sense, call
your local financial advisor today.
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