Every day newspapers carry headlines that worry retirees. The challenge is learning about the risks. While the world is changing and the markets evolve over time, learning and understanding risk and the obstacles can be a challenge. Here are some simplified ideas.

The difference between having and not having money is simple. The wealthy invest their money first and spend what is left. The people without a great deal of money spend what they have and try to save what is left. Do you have an automatic saving or investing program, or are you waiting until all your bills are paid?

What other mistakes do people make with money?

Investing without purpose. Do you just want more money, to travel more, to go to Hawaii in the winter, or to go skiing with your family?

Do you have an investment rebalancing program? Do you just invest and hope that it rides out the poor periods and grows rapidly in the good times, or do you and your portfolio manager(s) have a system for rebalancing in good times and bad for optimum interest rates? Have you ever invested in a GIC or locked into a mortgage for five years only to soon find you could have saved or gained another half to one percentage point? You shop around for the best prices in groceries and clothing, why not do the same with your investments?

Not understanding risk–perhaps the greatest mistake of the last decade. When stock markets sank and real estate skyrocketed, did you feel comfortable with your overall diversification plan? Or was it all in stocks, and forced you to learn about risk and diversification the hard way? Do you have a diversified portfolio or just a couple of big bets?

Currency risks. Hey, who knew the Canadian dollar would rise dramatically against the US dollar? Going global is great, but it is worth diversifying to avoid wiping out your gains by speculating which way the Canadian dollar will go.

Do you only dream of retirement income, or do you invest so you will have a predictable and comfortable retirement income? Knowing this can be the difference between having money or not in your retirement.