If I was counselling an individual, and my purpose was to help that individual, the most important thing would be that you should save more. Because don't expect that your retirement will follow those trajectories that some advisers are telling you.
Interpretation
The quote emphasizes the importance of saving for retirement rather than relying solely on financial advice.
Robert J. Shiller's quote highlights the critical role of personal savings in financial planning for retirement. He advises individuals to take a proactive approach to their finances, suggesting that one should not depend entirely on the trajectories proposed by financial advisers, which may not align with personal circumstances or economic realities. This underscores the need for individual responsibility in financial matters.
In practice
During a financial planning seminar, I referenced this quote to stress the need for personal savings.
Those on the downside of rising economic inequality generally do not want government policies that look like handouts. They typically do not want the government to make the tax system more progressive, to impose punishing taxes on the rich, in order to give the money to them. Redistribution feels demeaning. It feels like being labeled a failure.
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
We should not be focusing on quick solutions. The really important concern for policymakers everywhere is to prevent disasters - that is, the outlier events that matter the most.
If we wait until income inequality is much more severe, we will have a whole class of new superrich who will probably feel entitled to their wealth and will have the means to defend their interest. That's already gone far enough. We shouldn't let it become more extreme.
There is nothing so disastrous as a rational investment policy in an irrational world.
People come in. They are too gung ho. They invest too much money in things they don't know. They lose it and then they clam up and stop investing. Then they miss the actual boom. That's the nature of the market.
Long-term investing has gotten so popular, it's easier to admit you're a crack addict than to admit you're a short-term investor.
The Vanguard Experiment was designed to prove that mutual funds could operate independently, and do so in a manner that would directly benefit their shareholders.
If you owe $50, you're a delinquent account. If you owe $50,000, you're a small businessmen. If you owe $50 million, you're a corporation. If you owe $50 billion, you're the government.
Saving is a fine thing. Especially when your parents have done it for you.
Subscribe for the occasional hand-picked quote. No noise.