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Top 10 Retirement Investing Mistakes - Useful Lessons Even For the Young

Top 10 Retirement Investing Mistakes - Useful Lessons Even For the Young

Below are the most common retirement investing mistakes.

It pays to think about these errors even if you're:

  • A long way from retirement
  • Or don't want a traditional retirement - aka you prefer "work optional"

Can Private Credit Help Investors Avoid These Errors?

We believe private credit is gaining so much momentum as an asset class because it directly addresses / mitigates so many of these investing mistakes.

1. Inflation - private credit yields rise when inflation spikes.

2. Longevity - high monthly income means you don't have to guess how long you'll live (which is not a fun exercise). Regular income means you don't have to withdraw 4% of your stocks per year and hope your portfolio outlives you.

3. Overestimated investment income - similar to the last point - regular debt payments means you don't have to create a "dividend" by selling stock to fund your lifestyle.

4. Investing too conservatively - private credit currently offers potential for equity returns with debt risk (only a ~0.1% historical default rate for Oaktree and similar caliber firms we invest with).

5. Unrealistic return expectations - this is debt, far easier to predict total returns (much lower volatility).

6. Underestimated healthcare costs - monthly healthcare premiums are getting crazy with no sign of stopping.

7. Failing to understand income sources - pretty simple: private credit is just a large portfolio of secured loans made to profitable American companies at sub-50% loan to value.

8. Relying too heavily on public benefits - we assume politicians will continue to raid social security coffers or inflate the value of that income away. Therefore, we want to rely on highly diversified, high-quality investments to fund our lifestyle.

9. Underestimating real estate costs - They probably mean homes vs. real estate investments, but since we're here...recent real estate operating cost spikes (insurance, utilities, taxes and labor) have caught a lot of investors by surprise.

We love real estate investments, but investors should own more than just real estate as the private asset component of their portfolio.

10. Investing too aggressively - we can't think of a way to invest less aggressively than private credit while still targeting great returns.

 

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Note: Performance data quoted represent past performance; past performance does not guarantee future results. Current performance of the Fund may be lower or higher than the performance quoted.

Performance data current to the most recent month.

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