Married in 1982, Jean and Raymond raised three children; the third is just finishing up college. Jean and Raymond are both public school teachers and both will retire (he in two years; she in four) with healthy traditional pensions. Together, those pensions, combined with Social Security, should cover Jean and Raymond’s living expenses for the rest of their lives.
The couple will also likely bring in supplemental income from private tutoring. Jean’s mother is 90. When Mom passes away, Jean, an only child, expects to receive an inheritance of at least $1.5 million. Mom’s money is invested almost entirely in bonds and CDs. So what should Jean and Raymond do with the $710,000 they’ve socked away in their combined 403(b) retirement plans?
Jean and Raymond are in the catbird seat. Even if they were to invest the entire $710,000 nest egg in a new business idea, and even if we were to see the worst innovation crash in history, Jean and Raymond would likely still be okay.
The couple certainly doesn’t need to take the risk of putting their money in innovations because they don’t need to see their portfolio grow in order to accomplish their financial goals. But given their pensions, is investing in innovation really that risky? No. If Jean and Raymond desire to leave a large legacy (to their children, grandchildren, or charity), a predominantly invention portfolio may be the way to go.