If you are someone who is in his or her 50’s and is looking down the road towards retirement, the best plan of action to follow is to be very careful with your savings. What should you do, though, if you inherit a reasonably large sum of money due to the passing of a relative? Probably the best advice available is to change nothing. Put the money into equally safe financial investments. Do not make the mistake of believing the inheritance is “found money” and should be put into risk endeavors.

Honestly, when your retirement years are looming, you should think about preserving as much capital as possible when making financial investments. Yet, financial “experts” have a tendency to put forth mixed messages.

As a result, people are confused about what direction to go with financial investments. Television and radio commercials abound with companies offering (self-serving) advice about what to do with investment funds. For example, a lot of precious metals trading firms are suggesting gold is a good vehicle for investing since it is a great hedge against the ups and downs of the stock market. Moreover, gold offers protection against any weakening of the currency.

Both of these points are true, but they ignore what history shows us: the price of gold has a tendency to crash after soaring to record highs. Putting too much money in gold is not a good idea for someone hoping to preserve capital. An investor interesting in security probably should put very little of a portfolio in gold.

Again, your golden years should involve investments almost exclusively in low-risk vehicles.

Granted, secure financial investments designed to preserve capital are not likely to pay very much interest. Bonds might only pay 2% or so and Certificate of Deposit may pay less than that. However, the risk of losing money on these financial investments is negligible. Investing R100,000 at 2% interest for 12 years yields R126,824.18. Consider that a far better outcome than investing in a risky stock that loses 40% of its value.