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CalPERS dismal 1% return

A few days ago CalPERS came out and said that the last 12 month the pension fund only made get this a whole 1% return, WOW. What is CalPERS? CALifornia Public Employee Pension System.They are the largest pension system in the country with 233 billion under management for about 1.6 million public employees.

CalPERS runs under the assumption that it will make about 7.5% per year. For what ever reason they are short money wise the government makes up the difference. With the amount of retirees coming in the next decade will there be money to retire on?

Both the Washington Post and Bloomberg published articles on this, read them see what you think.
Why do I bring this up? Hopefully to shed some light that your pension or defined contribution plan may not exist when you want to retire. If it does great! But what if it doesn’t then what? Social Security? When it was created you where never to to live long enough to collect it.

OK they only had a 1% return and what does the government say that inflation is at? About 4%. In essence CalPERS lost 3% in the last 12 month.

What about you? What is your bank paying you on your CD’s, money markets, savings? Are you getting a 4% return or better? NO, that means you’re losing money. And don’t worry the government is waiting to take its share of it to.

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Where do i like to keep my cash? Real estate, cash flowing rental real estate. Why do I like it? It’s being a direct investor. No one with watch your money like you. When it’s someone else’s you spend it faster they you would your own. I find that true with me, when I work at my mom’s place it’s easier to go Home Depot and buy a bunch of stuff to make less trips or to get extra just in case. But they I did it for myself i buy less and make more trips to the store. Why? I guess its my money.

What am I trying to tell you be a direct investor and look after your own money. If you let someone else do it you have to pay them to invest your money. So why not you keep your money for investing your own money.

 

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