The first challenge facing the planet is global security. We are spending trillions of dollars trying to keep the bad guys at bay. Vast resources and effort are being deployed to keep ourselves safe.
The second challenge is how to live sustainably; in other words, how to minimise and control the world’s ever-growing carbon footprint.
Third, we face a global health epidemic. The four non-communicable diseases – Alzheimer’s, cancer, coronary heart disease and diabetes – are bearing down upon us like a steam train.
Fourth, is the economy. Since 2008 and the global financial crisis, it has been obvious that the global economic eco-system is fragile and highly unstable. The Cyprus fiasco is a wake-up call for anyone who thought we were back on track.
And finally, the fifth global challenge: inadequate retirement resources – the pensions crisis.
If you are in your late-20s or early-30s, now is the time to get a grip of your finances and your retirement plan
We are living much longer than our parents and grandparents. Some 40 per cent of girls born today will live to be 100. And, by 2060, the UK expects to have half a million centenarians. But we’re also contracting chronic illnesses in old age, and the cost of being elderly is high and climbing. In London you can expect to pay around £1,700 a week for full-time care for a parent with advanced Alzheimer’s.
And, for the foreseeable future, the government is unlikely to be in a position to provide more than a bare minimum of assistance. After all, it is spending vast amounts trying to safeguard its citizens at home and abroad, keep a badly damaged economy afloat, and maintain the basic welfare of its citizens. Unsurprisingly the nation’s public finances are in a desperate state.
Here are three principles to increase your chances of a successful retirement:
1. Don’t neglect your retirement arrangements; they will not sort themselves out. The younger you are, the more time you have to take action. If you are in your late-20s or early-30s, now is the time to get a grip of your finances and your retirement plan. If you wait much longer, it may be too late;
2. Don’t place all your investment eggs in a single basket; diversify. Many investors ignore this basic principle and, effectively, bet their retirement on just one or two assets, (including their home);
3. Educate yourself. These are highly uncertain times and investment decisions are complex. Gone are the days when you could simply buy a basket of equities, sit back and relax. Do not just leave it all to someone else; ask detailed questions. There’s plenty to read and, if you’re determined to, you can quickly get to grips with the fundamental principles of modern-day risk and return.
Dawid Konotey-Ahulu is founder and co-chief executive of Mallowstreet, a social media platform that connects the pensions and insurance industries, driving collaboration between investors – principally pension plans – banks, law firms, asset managers and specialist funds.