Most of us save and accumulate wealth as a means of providing for our financial security in retirement. What is the measure of financial security? Take your present standard of living costs in after-tax dollars. Multiply this by 15 which gives you a rough guide to the capital needed at retirement to support your lifestyle for the 30 years that most people expect to spend in retirement. This method assumes that in retirement you will live for 30 years and die on the day your last dollar is spent. For example, if your after-tax retirement income needs are $50,000 a year, you will require accumulated savings of at least $750,000.
Good luck!
* There is a mathematical basis for the rule of 15: a 30-year annuity paid annually from accumulated savings that generates a 5 per cent investment return requires a lump sum of about 15.4 times the annuity payment at the outset.
P.S. Some facetious investment advice: If you had bought $1,000.00 worth of Nortel stock one year ago, it would now be worth $49.00. With Enron, you would have $16.50 of the original $1,000.00. With Worldcom, you would have less than $5.00 left. If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214.00. Based on the above, my current investment advice is to drink heavily and recycle.