If you eat the same thing every day and have a fully caffeinated Cherry Coke while still living in the same house you have owned for over 50 years, than you and Warren Buffett are in alignment. His net worth not withstanding the other thing you want to have in common with the oracle of Omaha is to have excess cash to buy stocks when everyone else is selling them. This helps with the old saw, “buy low and sell high.”

If you are fully invested and need every penny working for you once your earning years are behind you, how are you supposed to have any cash when everyone’s portfolios are off 10 to 20%? Doesn’t Buffett just get others to give him more money at the right time?

Many of our clients have an investment portfolio with a combination of stocks and bonds which range from 50/50 to 70/30 depending on the client’s personal financial plan. Regardless, the difference between working with a firm like DLK and doing it at a larger institution is that at DLK we do the work to select specific bonds for our clients and we pick a series of expirations of these bonds which is often called laddering the expiration dates.

Bond funds will distribute income, and they solve for the problem of having a lot of investors own a lot of bonds, but they can’t beat the customization of an individually selected and laddered portfolio. With 10 to 15% of the bond portfolio coming due in any one calendar year, the retired investor can now have fresh capital like Buffett and either buy another bond when stocks are high or change the allocation a bit and buy some stocks when they are priced lower.

This optionality occurs when you work with a boutique registered investment advisory firm which can play a key role in helping retired investors thrive.