The holiday season is upon us, and many Americans are beginning to contemplate their New Year’s Resolutions. While there are the old standard resolutions such as losing weight or breaking bad habits–smoking for example–many are using the New Year to rededicate themselves to investing for retirement. And it’s no wonder: according to U.S. News and World Report, the average American will need 75 to 80 percent of his or her preretirement income to maintain their current standard of living. But how should you go about saving for retirement? Sam Tabar has a few ideas that may help.
Sam Tabar is an Oxford University and Columbia Law School educated attorney and capital strategist who formerly served as Director and Head of Capital Strategy for Bank of America Merrill Lynch’s Asia-Pacific. Tabar has also counseled clients on legal matters relating to investments and hedge funds at major New York City law firms Skadden, Arps, Slater, Meagher & Flom and Schulte Roth & Zabel. Simply put: Sam Tabar knows about saving and making money.
Commodity investment is a hot topic and one that Sam Tabar knows well. But he cautions that potential investors know the pitfalls of such investments before trading commodities. Commodity investments require more research prior to investment than your run-of-the-mill mutual investment, because they can be quite volatile and prices can fluctuate wildly. Price fluctuation is also why Tabar stresses proper diversification of commodity portfolios. He has seen more than one commodity investor over invest in that hot commodity whose price has skyrocketed, only to see it crater the next day.
But investing for retirement does not always mean heading to the trading floor or mutual fund adviser. One way to generate capital while doing good is by investing in one of the many socially conscious startups that are popping up. Social entrepreneurship–think Muhammed Yunus’ Grameen Bank, which makes microloans to impoverished small business owners throughout Southeast Asian–is a growing trend in America and abroad. Sam Tabar himself invested in THINX, a socially conscious company that manufactures “period panties”–fashionable panties designed for women to wear during their menstrual period. For every pair of panties sold by THINX, seven cloth sanitary pads are donated through AFRIpads to women in developing African countries. THINX’s donations empower young women by allowing them to attend school during their menstrual period. Without the pads, the women would be forced to stay home a week each month, which serves to exacerbate the education gap many women already face throughout the developing world.
Commodity trading and investing in social entrepreneurship are two of the many ways Americans begin saving for retirement as the New Year approaches. But no matter what investment vehicle you do choose, Sam Tabar insists that the most important investment to make is the first one. Like everything else–losing weight or quitting smoking–saving for retirement is a habit that begins with a single step. Good luck on taking that step!