Aside from dreaming of spending more time perfecting a golf swing, travelling to exotic locations, or playing with the grandchildren, little thought is often put into how to fill the many years retirement could have in store.



When preparing to leave the work force, some people focus so much on never having to face a stressful workday again that they overlook many important issues. 


The first and most obvious focus should be on your income requirements.


For many people retirement will give them the first real block of time they have ever had completely to themselves to do with however they please. Some may want to travel and others may have hobbies they want to immerse themselves in. Others may choose to move closer to family or make a ‘sea’ or ‘tree’ change. Some may do all of these things!


To make the most of your retirement years, your nest egg must be large enough to allow you to live the life you desire. It would be a shame to have a boring and unfulfilled retirement because you discover too late that you don’t have the means to afford activities that your peers are enjoying.

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Do you sometimes lay awake at night wondering what effect the latest share market "correction" or property "boom" is having on your investments?  By understanding the differences between the various investment assets, you can now get a good night's sleep knowing that a diversified portfolio is the best insurance you can take out against investment risk.


Asset Classes


1. Cash

Money in the bank, a term deposit, or hundred dollar bills stuffed under the mattress - cash is, at face value, the safest, least volatile asset class. The return from cash is entirely in the form of income (interest), so there's no capital growth. It also produces the lowest returns over the long term, and unless care is taken, its value can be eroded by inflation.

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