Truth be told, most people don’t invest and don’t know squat about investing.

45% of Americans have nothing saved for retirement.

Among 55 to 64 year olds, the average retirement balance is $12,000. If you use the percentage recommended by financial planners for the safe withdrawal of your savings in retirement (4% a year), a $12,000 portfolio will generate $480 a year – or $40 a month – towards your retirement expenses. Among those 65 and older about to enter retirement, the average balance is $100,000, which will generate about $4,000 a year in retirement.

Live on that.

As Mike knows, I was a personal finance and consumer reporter for more than 20 years. Here are my three favorite personal finance stories.

I’m interviewing a husband and wife for a story on savings. I ask them if they’re worried about retirement. The husband says to me: I’ve never really been a saver but we don’t worry about it, because my wife has a 401K through work.

I ask: How much is in the 401K?

He says: I don’t understand the question.

He did not realize that a 401K was not a pension but only had as much as his wife contributed plus a match from the company.

One of my favorite business writers, and the author of A Piece Of The Action, one of the best books on personal finance industry ever written, is Joe Nocera at the NY Times. A few years ago, he published a piece in the Times about turning 60 and confronting his retirement savings account. And, here he admitted that a guy who had been doling out financial advice for years was basically running on empty when it came to his own retirement account. He called it: My Faith Based Retirement. http://tinyurl.com/c5ocdw4. He had lots of good excuses for having raided his retirement account over the years – a divorce, buying a new apartment after the divorce, remodeling said apartment, putting kids through college. End result was the same: He had basically nothing saved for retirement.

Meanwhile, I will never forget sitting in an airport in 2001 as the NASDAQ was crashing following the tech boom. Across from me were two young, very well-dressed, newly minted MBA’s in their early 30’s. They told me they worked for one of the big consultancies and were flying home from an engagement. We watched the market crashing in real time on CNN on the airport TV monitors.

One of these future capitalist leaders says: Oh, my God. I wonder what this is doing to my portfolio.

The other genius says, quite smugly: Doesn’t matter to me. I don’t own stocks. I just buy mutual funds.

Not sure he realized that mutual funds are made up of ……. stocks. (Before someone takes me to task, yeah, I know you can buy bond funds, real estate funds, gold funds, but this was the tech boom we’re talking about here, when everyone was buying Internet stocks).

When it comes to personal finance and investing, for most folks, like the porn chicks, ignorance is bliss.

I actually explained to this girl,,If she had purchased a brand new Mustang like mine, which was a pretty cool car, she could have saved as much money on her lease payments to have over 97,000 dollars in and IRA acccount when she was 55,,,jsut from the car savings alone in three years, let alone everything else she was wasting her money on. I advised her to declare bankruptcy, and she actually said she could just change her name legally and get out of all the debt,,,TRUE STORY.

Sabrina, do you know how many countles times I saw girls walk into AIM wearing $300 sunglasses, $220 jeans, jewelery, an $800 hand bag, and then call a friend to use their credit card to pay for the $120 test? Happened constantly. I remeber one girl in paritcular tried to “sell” me her leased BMW because in two years of the three lease she was about 30,000 miles over the limit at 14cents a mile. She would drive the car back and forth between LA and Seatlle Washington regularly, in addition to letting other girls borrow it all the time. ONLY IN PORN

dear common sense

You really have an agenda there. We all have our opinions but you are swinging so far to the other side you must work for Lubben.

Best investment advice I ever got was split investment 75% liquid 25% retirement, when liquid covers 3 mo living split 50/50 then 25/75 when liquid covers six months of normal living expenses. As a typical 22 yo I entertained advisor with emphatic eye roll ….since taking his rebuttal challenge of saving $5 a week to cover ’emergencies’ I have not a single argument against that wisdom.

most invest in leasing a Honda Accord, a new pair of Prada Sunglasses, an absolutely to die for handbag, and a rather large quantiry of meth for their boyfriend.

Mitch had a survey once at AIM that was for a class she was taking,,,it asked who much do you make in a year,,,everything, porn, stripping, escorting, the mold they made out of your private parts, gifts, donations, whatever,,,,at the time one of the ToP girls, who is still around today, was huge back at that time, an did ALL of the above things I mentioned wrote that she made $250,000.oo

“Porn is one of the few jobs where you start at the top and work your way down, generally speaking.”
Good one! LOL!