The Keys to Managing Your Money for the Long Haul

Yes, creating wealth by investing in equities is important. But in old age, you can't 'eat a rate of return.' Managing downside risk matters just as much.

To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. -- Warren Buffett

When it comes to managing money you're saving over the long term for your retirement, how do you picture yourself? Are you a risk-seeking money manager or a risk-averse buyer of insurance? The difference represents one of the great divides in practical finance, especially in the 401(k) era. Much of the Wall Street marketing machine and investment commentary assumes you're a risk-accepting, wealth-creating manager of your savings. The tactics of the risk-avoiding buyer of insurance is left for the proverbial widows and orphans of society. Big mistake.

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Chris Farrell
Contributing Columnist,