These myths one day could keep you from living out your dreams. Don't fall for them.
I don't know about you, but I spend hours a day planning for retirement.
Seriously -- I do.
I devote a good portion of each day to deciding where on the French Riviera I should park my luxury yacht. How many hours a day I'll spend out in the surf trying to ride the waves, versus how many hours I'll spend sitting at the bar, pretending I can. You know, the important stuff.
You Probably Think I'm Crazy...
...especially considering we just suffered through one of the worst bear markets any of us can remember -- and it looks like it will be awhile before the economy recovers from this recession.
In fact, a few people have even suggested that I stop daydreaming about retirement, and start dusting off my CV. After all, they're convinced that thanks to the past year, all of us are now going to have to work until the day we die.
To these people, I suggest a simple exercise... take a look at the chart of the FTSE 100 over the past 18 months. It makes for pretty bad viewing. Then go back 10 years. It's more than dismal.
But then pull it all the way out to 15, 20, or even 25 years. Suddenly things start to look pretty good again. If nothing else, it shows you that shares really can grow your money over time. It also demonstrates that as bad as this drop has been, it's only a bump in a road that has historically climbed steadily upward. You don't have to take my word for it, though.
In a piece Warren Buffett wrote for The New York Times last October, the Oracle of Omaha pointed out:
Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
So What Should You Do Now?
For those of us who still have 15, 20, or even 50 years until retirement, I urge you to follow Buffett's lead and look for great businesses with strong competitive advantages, selling at good prices -- exactly the types of companies Maynard Paton and David Kuo typically recommend to members of our brand new Champion Shares PRO real-money share picking service.
But whatever you do, don't buy into any of these myths that could one day keep you from living out your dreams...
Myth No. 1: It's too early to plan for retirement
Too early to plan for retirement? Hogwash! Can you imagine if Tiger Woods' parents had told him he was too young to swing a golf club, or if Roger Federer's coach had told him he didn't need to practice his forehand yet? A large part of the reason those two men so dominate their respective sports is because they got a jump start -- and they never let up.
The same holds true with investing for retirement. You need to practice, work hard, and focus -- so that when game time finally arrives, everything is effortless and just falls into place. Is it a coincidence that Warren Buffett began investing at 11, has practiced every day since, and is now the richest man in the world? I think not.
So, what gives? I think it has a lot to do with the second investment myth you need to ignore at all costs.
Myth No. 2: I can't beat Federer -- so I shouldn't play
If you've watched professional tennis anytime in the past decade or so, you know that virtually no one can consistently beat Roger Federer. Likewise, most people can't beat Tiger Woods, on Sunday or otherwise. You probably can't, and I certainly can't.
Furthermore, it's not very likely any of us will ever be a better investor than Buffett. Nor is it likely we will one day be able to brag about how we got in early on the next Capita Group (LSE: CPI) or Dana Petroleum (LSE: DNX) and then rode off into the sunset.
So what? Just because I can't beat Roger Federer doesn't mean that years of practice and dedication won't turn me into an exceptional tennis player. I may never be better than Tiger, but hitting a bucket of balls at the range every day will nonetheless improve my drive immensely.
And just because you may not ever match Warren Buffett's wealth doesn't mean you shouldn't follow his investing style -- regular purchases of excellent companies selling for less than they're worth. Yet many investors mistakenly believe that the only hope for securing life-changing wealth is to "get lucky" and stumble onto the next Dechra Pharmaceuticals (LSE: DPH) before anyone has ever heard of it.
Myth No. 3: Planning for retirement is hard
The final thing that seems to keep many people from achieving their dream retirement is the very thing that could achieve it for them in the first place: hard work.
There's no sage advice I can quote here, and I'd be lying if I said investing well or planning for retirement was simple. But you must make it a commitment and a priority today -- for the sake of your future. Plus, with a little help, it can be far easier than you ever imagined.
Remember, it's never too early -- or too late -- to start working toward your dream retirement. See you in the surf!
More on the economy and the markets:
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> A version of this article was originally published on Fool.com, and was first published on Fool.co.uk on 21 July 2009. It has been updated by Bruce Jackson.
