Frank L. Netti - Retire Sooner, Self-Help
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RETIRE
RETIRE
RICHER
How to Build and Manage
Wealth to Last a Lifetime
FRANK L. NETTI
SOONER
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Manufactured in the United States of
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DOI: 10.1036/0071429034
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Contents
Acknowledgments ix
Introduction 1
Do You Have a Strategy? 5
Don’t Be Fooled by Past Performance 6
Avoiding Big Errors 7
The Why and How of Investing 8
Everyone Retires 10
P
ART
O
NE
Understanding Your Retirement Investments
1 The Numbers Game and Retirement Timing 15
The Big Difference: Accumulating Versus Spending 17
Uncertainty and Risk Within Our System 18
Understanding Averages 20
Market Returns Are Variable 22
2 Factors to Consider When Transitioning to Retirement 25
Insurance Needs 28
COBRA 32
Life Insurance and Income Protection 35
iii
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iv
CONTENTS
How Much Insurance Will You Need? 36
To Cover Long-Term Care, Spend Down 38
3 Why Some Retirement Plans Fail and Others Succeed 43
Will Your Portfolio Survive? 44
It Is Better to Know the Truth 46
The 1968 Retiree 47
To Make Things Worse: The Average Return Blunder 48
What’s Wrong with Being Right? 48
So Easy to Be Fooled 49
The Great Proposal Failure 51
Just the Facts, Please 52
Comparing Performance 57
You Can Bet on Yourself 59
4 How to Improve Your Money-Management Decisions 63
What Is the Process That Endowments Use? 64
Owning More than One Fund Reduces Risk 66
Setting Return Expectations and Standard Deviations 68
Only Time Will Tell 70
Do You Have Investment Experience? 71
Why Asset Allocation Works So Well 72
What Can Be Learned from Fiduciaries? 75
How Do Endowments Allocate? 77
Stop Trying to Predict the Market 79
P
ART
T
WO
Building the Wealth You Need
5 Portfolio Lessons for a Lifetime 85
Some Assumptions Can Be Off 87
At What Risk? 88
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