Personal Finance

Retirement plan tips from the World Cup

Retirement, like football if not well planned
Retirement, like football if not well planned can be disappointing when our goals are not well met. FILE PHOTO | NMG 

It is hard to believe that the 2018 World Cup is almost getting into the final stage. Already we have seen outstanding performance from some teams, saving them elimination and pushing them closer to the finals. Arguably, these outstanding performers were made to suffer to make it past the elimination stages through scored goals.

Retirement, like football if not well planned can be disappointing when our goals are not well met. I thought I should share some correlated tips about the two subjects before the world cup ends:

Ball possession does not guarantee a win If there is any result that has hammered home the underlying theme from this World Cup, is the defeat of Spain. Crowned the 2010 World Cup champions, the team lost to Russia in a penalty shootout despite having had 79 per cent of ball possession and was eliminated. Same case applied to other great teams as Germany and Argentina.

Often, annual salary increments or hefty bonuses sway us to believe we are rich and in most cases we hardly make valuable investment plans for the new money. This is like ball possession, whereby if not well managed can result to wasted opportunities. Thus, it takes consistency, unwavering discipline with clear strategic focus to keep scoring in your investment goals.

What is your game plan? Your strategy is key in terms of asset allocation and diversification with clear alignment to the risk profile. Asset allocation is the process of choosing investment options that match your personal risk profile and investment goals.

After trading goals in the first half, Russia held firm to knock out Spain in the 2018 world cup tournament's first penalty shoot-out.

The spread of assets can be aligned to defensive stocks / assets such as bonds while you have inclusion of strikers like equities with the midfield assets like properties that supply regular income for reinvestment in equities and guard against inflationary risks. Some hyperinflationary moments will surely strike at your financial goals but how prepared are you in playing defence?

Take some half time Periodic half-time moments to review how your retirement goals are aligned to your strategic tactical portfolio asset allocation positively contributes to staying focused on the goal and informs if there is need for new approach.

Review can be done with help of a consultant, while you consider inclusion of your family. Remember every half time in football has the input of the coach through moral boosting, guiding on change of strategy based on the first half results.

Each team has a coach Generally selecting players to form a team does not guarantee winning no matter the talent. That is where football managers and coaches come in.

Who is your financial coach? Having your financial assets in the field of investments is not guarantee for success. You need professional support for tactical asset allocation that brings about investment value.

Blame game is the sure way to lose. Julen Lopetegui, the coach fired two days before Spain’s opening match, and Luis Rubiales, the Spanish Football Federation president who fired him, will be circled as the key offenders.

What started badly, ended badly,” wrote Marca. “All the problems began with the dismissal of Lopetegui and then continued with a team lacking in form and ideas.”

And like in football, the blame game shall continue for most employees that don’t have a retirement plan. They will blame the employer for inadequate pay, government for poor policies, stock market for poor performance, among other reasons. It’s important to note that retirement planning is a personal responsibility.

Remember every game must end at some point A typical football match in any part of the world is 90 minutes long meaning players should have scored winning goals for their teams by the time the clock ticks.

Similarly, at some age one has to retire and accept the results of his effort in the field. The question is, ‘what results will you celebrate?’

Substitutes are allowed. Occasionally, the coach replaces tired players a tactic aimed at improving the team’s result. Review of your asset allocation with a sale and buy with the strategic alignment to your goals based on risk appetite and age profile alignment is a great way to build momentum for successful investment.

Celebrate your win moments Every team that scores a goal spares a moment for an immediate celebration. Celebrating small wins gives you momentum to achieve greater goals. You don’t have to wait until age 60 to go on holiday, you may not have the taste buds to appreciate the flavour then.

Focus on the future and not your past. We all have our past failures but they don’t define our future. Your future has more value than your past. It is thus never too late to devise a new financial plan that safeguards your retirement period.

Simon Wafubwa, CEO Enwealth Financial Services.