What Millennials Can Learn from Boomers about Retirement Planning

Boomers retiring by the tens of millions each year.

How many times have you heard it said, “If I only knew then what I know now…” about everything from financial planning to raising kids? It’s likely that you’ve heard it at least several times a week and now even millennials are becoming tuned in to the problems besetting boomers as they age and retire.

The world is a much different place than it was, even a generation ago, and so it would be wise for the younger generation to look at some of the trials and tribulations of boomers as they begin retiring by the tens of millions each year.

Insufficient Planning Delays Retirement

One of the major problems that many boomers face is that they didn’t plan sufficiently for their future. They assumed their Social Security check along with that 401k or other retirement investment would be sufficient to provide for them in their senior years.

Back a few generations, there simply weren’t the resources to plan well for retirement and today’s retirees are learning that they should have planned better. Today there are financial products that are aimed at growing wealth for your senior years and these are the products millennials should be investigating when seeking to invest in their own futures.

Unexpected Rises in the Cost of Living

What it all boils down to is that no one really expected the cost of living to skyrocket as it has. Some attribute it to the cost of production, keeping prices rising while others attribute it to higher taxes and the increasing cost of fuel and food. For whatever reason, the cost of living has far surpassed the rise in wages and this is something no one could have foreseen but perhaps should have planned for anyway.

Avoid Borrowing against Retirement Savings

Another one of the big mistakes boomers made, almost across the board, is to have borrowed heavily along the way against their retirement savings. This is a big problem that millennials should learn from. If at all possible, don’t delete those savings! Find a way to finance what you need to pay but leave that money where it is so that it can continue growing.

You know what they say about good intentions, so don’t be caught in the ‘intend to replace it’ trap. Chances are you will never replace that money once it has been spent. Just as you think you’ve got your head above water, another crisis surfaces and so it goes. Put that money away and forget it’s there. That, perhaps, is the biggest lesson you can learn from boomers.

The Logic of Downsizing Early

When it comes to downsizing once the nest is empty, altogether too many people fail to liquidate assets early enough. That big six bedroom home you live in and raised your children in may be sentimental but now that it’s paid off, sell it, buy a smaller property and invest the profit made from the sale.

Too many middle age people hang on to the family homestead thinking to save it for the kids, or to have a place for them if they need to come home. It’s time for grown kids to be grown kids. Think about your future by downsizing as soon as the nest is empty. Can you imagine how that amount of money can grow over the course of a couple decades until you are ready to retire?

Diversify Your Investments

And one final thing which millennials should learn from boomers is that they failed to diversify their investment products early enough. Altogether too many people lost their savings with the economic crisis of a decade ago and now those boomers simply don’t have enough time to recover their losses.

By diversifying your retirement investments, you can have that added bit of protection if one market should fail. The last time it was real estate that led to a global crisis. What will it be next time around? No one knows so diversify, unless of course you are a fortune teller and can predict the future.

The intelligent millennial will take a good look around them and fully understand the predicament most boomers are in now as they face retirement. It is always good counsel to be told to learn from your elders, in both their triumphs and failures, but never more so when planning for retirement. Don’t fall into the same trap your parents and grandparents fell in. You can learn a lot from boomers if you care to open your eyes. Plan now and live comfortably later – a great investment strategy altogether.

 

 

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Dropbox IPO Just Got $2 More Expensive Per Share

The Dropbox IPO is one of the most talked about offerings that has happened this year thus far, and for good reason. Dropbox is a massive company with a blue chip valuation. Well, that valuation just got a whole lot bigger as the Dropbox IPO just got quite a bit more expensive. Today, we’ll talk about the news, why the increase is actually a pretty good sign for Dropbox, and what you should be watching for ahead.

Dropbox Increases IPO Price

As mentioned above, the latest news that we’ve gotten with regard to the IPO of Dropbox has to do with the price. In recent news stories, we’re seeing news that Dropbox has made the decision to increase the price of its IPO.

Previously, Dropbox announced that it has decided upon a price for its IPO. At the time, the company set the initial IPO price range to be between $16 and $18 per share. This gave the company the expectation of raising approximately $648 million through the offering.

However, on Wednesday, the company announced that it has decided to increase the IPO price. Now, if you want to get in on the IPO, you’re going to apy somewhere between $18 and $20 per Dropbox share. As a result of the increased price per share, the company is now expecting to raise approximately $720 million, just under 10% of the total valuation of the company at $7.8 billion.

Why The Increase In The IPO Price Is Good News For Dropbox

While at first glance, this may not seem like such good news, it’s great news for Dropbox and a very positive sign for the IPO. There are multiple reasons for this:

  • Larger Amount Of Funds Raised – First and foremost, let’s not forget the reason for an IPO in the first place. In general, companies go public in an attempt to raise funds, and a whole lot of them. Even if the IPO price was to stay at the lower initial number, Dropbox would have raised an incredible amount of money. However, with $2 more per share in mind, the company is likely to raise an additional 72 million.
  • Shows Strong Demand – At the end of the day, if Dropbox wasn’t confident that the demand would be strong for its IPO, it wouldn’t go raising prices. After releasing the initial price of between $16 and $18 per share, the company has made the decision to increase the price after just about a week. This suggests that Dropbox has crunched the numbers based on reactions to the initial pricing, deciding that the demand was there for an increase. That’s great news.

What To Watch For Ahead

Moving forward, Dropbox is likely to present several potentially profitable opportunities. After all, it is one of the most talked about IPOs in some time. Adding in the fact that demand is already high enough to warrant a price increase on the shares, makes this an even more exciting even.

With that said, if you’re looking to get involved in the Dropbox IPO, there are a few things you should be watching for. First and foremost, pay attention to the news surrounding the price increase. Soon enough, we should see stories with regard to demand that tell us whether or not this was the right move relatively soon. Also, do some due diligence with regard to the valuation of the company. Is a $7.8 billion valuation really worth it when the company hasn’t produced a penny in profit??? While I can think of several examples where historically, the answer has been yes, that doesn’t mean that that’s the case here. So, before getting involved, make sure to do your research and understand just what you are purchasing when you buy shares.

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Dropbox IPO Just Got $2 More Expensive Per Share

The Dropbox IPO is one of the most talked about offerings that has happened this year thus far, and for good reason. Dropbox is a massive company with a blue chip valuation. Well, that valuation just got a whole lot bigger as the Dropbox IPO just got quite a bit more expensive. Today, we’ll talk about the news, why the increase is actually a pretty good sign for Dropbox, and what you should be watching for ahead.

Dropbox Increases IPO Price

As mentioned above, the latest news that we’ve gotten with regard to the IPO of Dropbox has to do with the price. In recent news stories, we’re seeing news that Dropbox has made the decision to increase the price of its IPO.

Previously, Dropbox announced that it has decided upon a price for its IPO. At the time, the company set the initial IPO price range to be between $16 and $18 per share. This gave the company the expectation of raising approximately $648 million through the offering.

However, on Wednesday, the company announced that it has decided to increase the IPO price. Now, if you want to get in on the IPO, you’re going to apy somewhere between $18 and $20 per Dropbox share. As a result of the increased price per share, the company is now expecting to raise approximately $720 million, just under 10% of the total valuation of the company at $7.8 billion.

Why The Increase In The IPO Price Is Good News For Dropbox

While at first glance, this may not seem like such good news, it’s great news for Dropbox and a very positive sign for the IPO. There are multiple reasons for this:

  • Larger Amount Of Funds Raised – First and foremost, let’s not forget the reason for an IPO in the first place. In general, companies go public in an attempt to raise funds, and a whole lot of them. Even if the IPO price was to stay at the lower initial number, Dropbox would have raised an incredible amount of money. However, with $2 more per share in mind, the company is likely to raise an additional 72 million.
  • Shows Strong Demand – At the end of the day, if Dropbox wasn’t confident that the demand would be strong for its IPO, it wouldn’t go raising prices. After releasing the initial price of between $16 and $18 per share, the company has made the decision to increase the price after just about a week. This suggests that Dropbox has crunched the numbers based on reactions to the initial pricing, deciding that the demand was there for an increase. That’s great news.

What To Watch For Ahead

Moving forward, Dropbox is likely to present several potentially profitable opportunities. After all, it is one of the most talked about IPOs in some time. Adding in the fact that demand is already high enough to warrant a price increase on the shares, makes this an even more exciting even.

With that said, if you’re looking to get involved in the Dropbox IPO, there are a few things you should be watching for. First and foremost, pay attention to the news surrounding the price increase. Soon enough, we should see stories with regard to demand that tell us whether or not this was the right move relatively soon. Also, do some due diligence with regard to the valuation of the company. Is a $7.8 billion valuation really worth it when the company hasn’t produced a penny in profit??? While I can think of several examples where historically, the answer has been yes, that doesn’t mean that that’s the case here. So, before getting involved, make sure to do your research and understand just what you are purchasing when you buy shares.

Checkout Unique Finance and get a bonus from me.

Spotify’s IPO Is Like Nothing We’ve Seen Before

 

 

 

If you’re into the world of investing, you know what an IPO, or Initial Public Offering, is. This is when companies offer shares to the general public in an attempt to raise funds; the transaction that defines the difference between privately held and publicly traded. However, Spotify’s offering is very different from anything we’ve ever seen before. Today, we’ll talk about how the Spotify IPO is unique.

Bell-Ringing… Spotify Won’t Be Taking Part!

When an IPO launches, the CEO or other members from the company’s team of executives will generally ring the opening bell or closing bell for the stock exchange on which it goes public. However, that won’t be the case for Spotify. In fact, the company won’t be engaging in any self promotion or congratulatory events on the day it goes public.

That’s right, the CEO won’t be on the trading floor on April third talking about the company. Not to mention, there will not be any parties to celebrate the going public milestone. In a recent statement, Daniel Ek, CEO and founder at Spotify, had the following to offer:

                                       “For us, going public has never really been about the pop or circumstance of it all…”

 

New Shares… No Need!

Even more interestingly, Spotify will not be offering any NEW shares during its IPO! In general, when a company launches its IPO,that company will offer new shares of the stock to those that purchase through the IPO. However, Spotify is going about things in a very unconventional way.

In a recent announcement, the company said that it would not be offering new shares. Instead, all Spotify shares included in the IPO are shares held by existing shareholders. While this is very unorthodox, it’s actually very interesting and could be for a very good reason.

When new shares are included in an IPO, they are traditionally known as a lockup period. However, by only offering shares that are already held by existing shareholders, there will be no lockup period enforced by Wall Street underwriters. Is this a positive or negative? Well, no one really knows as we’ve never seen anything like this before. However, it does provide some advantages that could cause further demand among the investing public.

No Closed-Door Promotion

Finally, when a company launches an IPO, there’s quite a bit of awareness building that happens to take place. Much of this awareness building is done behind closed doors on road shows. However, Spotify has made it clear that they will not be doing any closed door promotion of the IPO. Instead, everything done will be public knowledge.

This was taken a step further on Thursday when the company first live streamed a road show. Here’s the link to the archived video. While this is unorthodox yet again, it could prove to be a positive as it will likely lead to investors enjoying the added transparency.

Final Thoughts

IPOs happen all of the time. However, this particular IPO is like nothing the market has ever seen before. Without private meetings, bell ringing events, interviews and new shares, Spotify is setting the stage for a very interesting first trading session on March 3rd.

 

March 18, 2018 at 6:47am
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