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You invest in stocks to grow your money. But what if you have enough already?

An 80-something reader asked this question recently. Income-wise, he’s in good shape. After-tax income discretionary income exceeds fixed living costs by enough that he and his wife, also in her 80s, have been able to make maximum contributions to tax-free savings accounts since their introduction in 2009. They have a hefty six-figure amount sitting in their various investment accounts, and are depleting it at a modest rate. Also, they have no debt.

“Having reported this to you, here comes a ‘stupid’ (maybe) question,” he said in an e-mail. “At our respective ages, why should [my wife and me] even think about investing in the stock market?”

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Especially lately, with the markets flying, investing in stocks is sometimes seen as an end in itself. There’s money to be made, so dig in. But investing for most people is about achieving goals like helping your children pay their post-secondary education costs, building a financial base for retirement and then re-moulding that base to produce retirement income.

Few of us can meet these goals by just putting away money. You need growth from stocks, tempered in most cases with some bonds to stabilize a portfolio in rough times. Stocks promise average annual gross total returns of 5 to 6 per cent, which means share prices gains plus dividends.

Coming off a brilliant 12-month gain of 33.8 per cent, the S&P/TSX composite index has a 10-year average annual total return of 6.8 per cent. Hidden in these numbers was the 33-pe- cent peak-to-valley crash in the winter of 2020. Stocks chugged right back, but that’s unusual. The next crash could take longer to heal.

One reason to stick with stocks if you’re in your 80s and self-sufficient financially would be the potential to build your legacy. More growth leaves additional wealth for your family and charities you support.

The stock market is shifty, though. It gives people great satisfaction in good times, but the anxiety on the downside is even more heartfelt. If you’re confident you have enough money, why bother?

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