Monday, March 20, 2006 - Don't Let Income Obsession Cheat You - Don't Let Income Obsession Cheat You

If the above link doesn't work, let me know, I'll forward a copy of this article.

I was quoted in this article, the excerpt as follows:

"Equally important, what retirees often don't understand is the importance of having their portfolios continue to grow and not just generate a set amount of income, says Scott Dauenhauer, a financial planner in Laguna Hills, Calif. "Even though your income looks may be losing purchasing power" to inflation, he says.

To make the point with clients, Mr. Dauenhauer boils it down to a simple example: postage stamps. A retiree in 1975 whose "needs" were to buy two postage stamps required a "portfolio" that produced income of 20 cents. Six years later that same amount of income would only buy one stamp. Today that income buys half a stamp.

For that portfolio to keep up with the "cost of living" it would have needed to grow about 4.5% a year. "Inflation happens and it matters," Mr. Dauenhauer says."

The Wall Street Journal is the top finance paper in the U.S. and argueably around the world, it's pretty cool to see my name in their again!

Scott Dauenhauer, CFP, MSFP