A couple of months ago I received a comment from a member that I wanted to respond to because I think her statement applies to a lot of us, or at least it will someday. This member wrote:
“You know how they say that “40 is the new 30.” Well, maybe we can say that if we are diligently working to improve our health, improve our thinking and living. However, when it comes to investing, saving, retirement the 40 something’s aren’t where they should be and I sometimes have the feeling that I am going to work until I’m way past 50 to take care of basic needs for food, clothing and shelter. I think lots of Americans are in the same situation. I’m a saver, an investor, but I still feel that life is passing by so quickly and I may not be in a good place to retire and enjoy life. There is a feeling of insecurity although we may be doing all the right things. . .”
There are two types of people (how many times have we heard that, ha); those we save/invest in their future and those who don’t. Warning: If you are the type of person who doesn’t save or plan, watch out. Someday you will realize the mistake you made and at that point it will most likely be too late. I know one person who always spent every dime he made, bought new cars, etc…He is now 70, still working (even though his body will barely let him) and he is buried in debt. Nobody wants to claim bankruptcy at 70. Another good example is a close friend of mine. She recently called me excited because she finally paid off years of credit card debt. While that is great news, the down side is that she has nothing to show for the last 10 years of work.
However, the above quote affirms the reality that even when we do save, often times we still don’t feel that secure. Houses burn down, people get cancer, and dogs get sick (read previous posts for more on that one). Life is not easy. Contrary to what Hollywood tells us and promises of the American dream, the majority of us struggle on some level, at some point in time. Not to mention that the older we get, the harder it is to overcome obstacles and the shorter amount of time we have to save. I feel odd bringing this up now, since at 27 I still have that deceptive “invincible” feeling, but I am certainly not getting younger (are your joints supposed to ache at 27 when you get up in the morning??). I wanted to list 3 important things you can do to help offset worries about the future:
- Have an emergency fund. You’ve probably heard that before, but we never know what will happen to us. Will you have your job tomorrow? Lose your house? Get sick? Experts recommend saving 3-6 months of living expenses in case of emergency. This seems like common sense, but sadly most Americans don’t even have 500 bucks saved.
- Get supplemental insurance. Companies like Aflac (I have heard amazing stories from their customers) let you choose what you want to insure yourself against. Cancer, pregnancy, accidents, hospital stays, etc. It is relatively inexpensive and can save TONS of money in the long run. I must confess I don’t currently have any supplemental insurance but it is something I should look into.
- See a financial advisor. To a lot of people that sounds daunting. Like only people who own yachts and have personal lawyers and CPAs could have a financial advisor. Nothing is further from the truth. This is one of the most critical things you can do to help ensure a sound financial future for yourself. I started seeing one at 22 when I made 8 bucks an hour and could barely save anything. Most advisors give you a no-cost consultation as well (I only pay 40 bucks a year for the one I use, and I make a lot more than that on my investments, at least until recently!). Just tell them how much you want to have and what age you want to have it at and they will run all the numbers and help you put a plan in place. We are privileged to have in-house advisors at Addison Avenue who are available by branch or phone. If you have never talked to an advisor before, there is no better time to start than today. (877-Addison or request a consultation online here)
Prepare for your future now. You never know what tomorrow holds.
“The sky is falling.” That was the line that made Chicken Little famous. After an acorn fell and hit him on the head (in the original story), he thought the world was coming to an end. That is the same thing that a lot of people are crying right now. With the stock market down, banks (note: I said banks) going under, and the government fighting over what to do, it is understandable that there is concern in the public eye.
However, there are some things that should give us peace of mind. For instance, the government seems to have learned from past recessions and depressions and have created certain safeguards to help prevent against a major market crash. An example of this would be what they call “circuit breakers”. If everyone starts to panic and sell and the market drops too drastically (below a pre-determined amount), the system will simply shut down for a period of time to guard against a collapse.
There is another important key to having peace of mind during this period of economic hardship: credit unions. Most credit unions have had the common sense to not underwrite bad loans out of greed. We have continued to put people first, instead of our own pockets. Without getting into the accounting and financial jargon, I will dumb it down by saying that Addison Avenue is doing VERY good. If you belong to Addison Avenue, you can sleep well at night.
The sky might be falling in some neighborhoods, but not in ours.
While there are plenty of four letter words I could blog about, I thought I would go after one that isn’t normally considered “bad”. In fact, it is almost always considered “good”. We love to talk about it, brag to our friends about it, and as a matter of fact, we even crave it. No, it’s not “Coke” (I’m a Pepsi guy myself). The four letter word I am talking about is “Sale” (shudder). That simple word has been know to rob people blind, cause conflict in relationships, and create mass hysteria (remember the day after Thanksgiving Sale??).
We all know that sometimes sales can be a great thing, and often times we really do save a lot of money. But like Pavlov’s dog, we are conditioned to drool every time we hear or read the word “sale”. One of my close friends graciously gives a large percentage of his paycheck every year to so called “great deals”. We don’t stop to think that we still might be paying too much, or that the sale price is barely less than the original price and still includes an outrageous markup.
Make sure to examine whether or not you really are saving money next time you see that four letter word. Just something to think about as we head into the holiday season.
Charity. Most everyone I know would agree it’s a good thing (hopefully). It is definitely a nice theory, people helping people, sharing the things we have been blessed with. But when do you say “no”? The fact of the matter is that there is no shortage of people asking for money. But saying no to a charitable organization can make you feel like a jerk (and I am convinced some of them play on this).
For instance, last night while eating dinner (of course during dinner…when else?) there was a knock on my door. Naturally I had just taken a big bite of an enchilada (from Trader Joe’s). I opened the door and before I could blink some young guy started talking a mile a minute with a sales pitch. I made an obvious act of my chewing hoping he would take the hint. He didn’t.
Turns out he was a self-labeled “underprivileged” student (wearing very nice clothes) with a high GPA hoping to sell me a newspaper subscription so he can get “points” for college. And if I don’t like the paper during the trial period, he suggested I “lie” to get my money back. I tried to explain that it is hard for me to justify paying for someone else’s college education while I still owe 20k towards my own, not to mention the fact that I don’t read the paper (I am gen Y…c’mon, I get everything online). He didn’t like that. He also didn’t seem to realize that Stanford (only 10 miles away) recently decided to allow Californian residents whose parents earn under 100k a year free admission to the school (someone correct me if I am wrong…I know they offer something close to that). He shook his head like I was some sort of jerk and walked off. Sorry, I give to several charities, but not to potential scams where people are disrespectful of me, my time, and my money. Where do you draw the line on charitable giving?
If you want a great reputable place to find a charity that matches your heart or passions, check out http://www.charitynavigator.org.
They are some of the most skilled salesmen and women you will ever run into, able to psychologically and emotionally woo even the toughest of skeptics. “Ah!” you scoff, “nobody could break my iron will!” But I am not talking about mere cellphones, cars, or jewelry. Oh no. I am talking about selling dreams. The ultimate experience. Unreal relaxation. Paradise. Heaven on earth. What are these people selling? Timeshares.
“All” you have to do is go listen to a 45 min presentation and you “get” a free breakfast! (By free breakfast they mean like the kind a cheesy motel sets out for you in the morning. Like green eggs and ham?) “What a great deal!” you think, as you walk into the dimly lit room repeating in your head the phrase that Nancy Reagan made famous: “Just say no. Just say no.” Leaving the room 6 hours later you dance towards the bathroom from the excitement over the sweet deal you just got. How did they do it?
Don’t get me wrong, sometimes timeshares are a great deal (like when your friend’s rich grandma has one she isn’t using and you get to go instead). Like everything for sale in this world, some things are of value and some aren’t. Vacations are certainly no exception. Right now my wife and I are trying to figure out what to do next year and the more we think about it, the more overwhelming it becomes. Luckily we have the internet so I can sit surfing at my computer eating a Poptart instead of listening to a rhetoric-packed lecture over fake eggs.
We are still figuring things out, but it made me wonder what everyone else does. Can timeshares be a gold mind? Travel agents? A lot of people have a favorite spot they go back to year after year. Do you have one? Have a favorite website to get deals off of? Any money saving travel tips? Word of mouth is tried and true for passing around hot vacation spots and good deals. Anyone willing to share?
It’s beautiful. Steadfast. Never changing. Always there for you when you need it, providing comfort on a bad day. It will wait for you as long as it takes. No, I am not talking about a significant other or a pet. I am talking about Trader Joe’s Turkey Chili. I am talking about the best canned chili you have ever had (dare I say it might even be better than your moms?).
Why do I bring this up? Because I used to not care where I grocery shopped. I would pick the closest place to my house and go there because it was convenient. Then when I got married, my wife wanted to start shopping at Trader Joe’s. The “weird” store I thought. Had I even been in there before? No. I just judged it because it wasn’t some generic Safeway-type store. It wasn’t long before I swallowed not only my pride but also things like mini-mint mouthfuls, Spiced chips, and bowl after bowl of steamy hot deliciousness a.k.a. Trader Joe’s Turkey Chili. However, the great food was only one reason my wife shopped there. The second was the pricing. At least where we live, it is around 2/3 of what we would spend at the local Safeway. And to offset the “convenience factor” of the closer grocery stores, we only go once a week.
Do you care where you get your goods and services? Are you currently offended by paying a buck for a can of sorry-excuse-for-chili at your local grocer? Take a minute to shop around. You never know how much you will save or what great new things you might find.
Gold. It comprises the vast majority of jewelry, is the highest medal awarded at the Olympics, and is the official standard of monetary exchange in most countries. People have fought for it, stolen it, mined for it, and been consumed by the thought of it since the beginning of humanity. (I have always wondered why gold was deemed the most “valuable”. Imagine if it were dirt or wood that some guy 6000 years ago deemed as precious instead of gold).
On a separate note (these are related, I promise), my co-worker’s dog recently passed away. Another co-worker’s dog isn’t doing too well, and yesterday morning I got a call from my wife that our dog was suffering from things I shouldn’t describe in a blog. Shinobi (my pup) will be ok, but during an ordeal like that it makes you think. What if he did pass away? It changes the way you see things when you run into a situation like that.
Back to gold. As much as we strive for gold, or money, or big bank accounts or good interest rates, there are things (obviously) that more important. Yes, we all have to have money. We need to pay bills, invest in our futures, food, shelter, and clothing yadda yadda yadda. But a memory, feeling, or relationship can trump any amount of money. Btw, I know several people who have spent thousands on vet bills to try and save their pet. Would you spend 5,000 to buy a dog? Probably not. Would you spend 5,000 to try save your family’s companion of 10 years? Probably.
It wasn’t fun watching my dog get sick and worrying about him (I am at home as I write this making sure he is doing better), but it was a good reminder for me to take a break from the race of trying to get ahead financially and just enjoy the things I am blessed to have today.
Some things are worth more than gold.
We all have bad days from time to time. Or as it is referred to in the movie “OfficeSpace”, we get a “case of the Mondays”. Whether it’s at work, home, or somewhere else, every once in a while a day turns bad and we have to figure out what we are going to do about it.
Most people have a plan of attack for situations such as these: Starbucks. Heck, for a lot of us we think, “why wait for a bad day? Why not be pro-active and get Starbucks on the way to work. That would be the responsible thing to do”. And yes, it would be if it makes you a more pleasant person to be around; your family and co-workers will be thanking you. But Starbucks isn’t a one-size-fits-all solution for people. Some need a coveted Diet Coke with lime, or pizza for dinner when they get home or lunch at their favorite restaurant.
The bottom line is that most people have something to rescue them from their woes. The problem is that our caffeinated band-aid costs us 3 bucks a pop (or whatever your treat costs) and over a course of a year that can add up. If you are a true addict and have one a day you will spend over a thousand a year. Just for the sake of round numbers, if you take home 50k a year, you are spending 2% of your income on coffee alone.
Now I am not here to judge who spends what on coffee (I too am guilty of bowing down to the corporate monster :::cough::: tall mocha with whip :::cough:::). I am just merely pointing out that our emotional pacifiers can really make a financial dent over time. What do you “need” in order to have a good day? Is it worth the cost?
Lazy. That’s what we are. And it costs us a lot of money in a lot of ways (as I have shared in some of my other posts). One seemingly small way we succumb to laziness is whenever we happen to be in a parking lot. It’s like entering a magical zone that sucks the life out of a person; everyone instantly turns angry and impatient. For whatever reason, most people can’t stand parking in the first open space they see. Instead, they will drive around and around waiting for a “close” spot to open. And the time it takes to find a “close” spot is almost always longer than the time it would take to walk the difference.
Personally, I like to park and walk. By taking an open spot towards the back of the lot, people are less likely to hit your car, you save money on gas, and you get more exercise (even though those are all in small quantities). I thought my “park and walk” plan was foolproof until a couple of weeks ago…
A co-worker and I set off to get some Starbucks in order to ensure a productive afternoon. I found an open spot several blocks away and snagged it. We got out and were walking along enjoying the California sun when I felt a raindrop hit my head. I looked up and after getting half way through the thought, “but I don’t seen any rain clou…” I realized there is only one thing that can hit your head that doesn’t come from clouds. Chocolate sprinkles. Apparently some bird had finished digesting its morning scone scavenged from the sidewalk and decided that it was as good a time as any to make room for the next one. I did my best to wash my hair in the bathroom sink at Starbucks, but nothing could wash away that “violated” feeling I had for the rest of the day.
Will I park closer next time? Doubtful. Will I be more paranoid now? Absolutely. How about you? Park and walk, or drive endless circles waiting for the perfect spot?
WhapWhapWhapWhap…that was the sound my car started making while my wife and I were driving 70mph down the highway last Saturday. I instantly pulled over as visions of repair bills went through my mind. It turns out a 1 inch thick strip of rubber had gotten ripped off my front tire and was hitting the underside of the car ever time the wheel turned. The irony? I was on my way to get NEW TIRES FOR THE CAR. Sweet. Couldn’t make it another 10 miles, could ya car? So I busted out the puke yellow donut from the trunk and feebly attempted to take off the front tire (with the sorry excuse for a tire iron it came with). I do pushups and pull-ups at home, but apparently not enough; I couldn’t budge a single lug nut. Way to be a man in front of the wife; even the dog looked a little let down. So I did 2 things: called AAA and continually checked the mirror hoping a cop would see my hazard lights and stop…
Long story short, since I have been too cheap to buy AAA (it’s not that expensive either), they said they could sign me up as a new member but in the state of California they don’t provide same day service. “Would I still like to open an account right now?” they asked. Uh, NO.
Plan B: I finally saw a cop approaching and….cool, he blew by me at like 80mph. However, he pulled over half a mile down the road at another stranded vehicle and got out to help them. Crossing my fingers that the tire wouldn’t blow, I turned the car on and drove down the shoulder and parked almost blocking him in between me and the other car. After simply asking for help to get my tire off, he looked at me and said, “Uh, there is a tow truck on the way for this other guy, he can probably help you.” Thank you civil servant. After basically explaining that I just needed his help for 1 minute to get the dumb tire off and making it clear “no” wasn’t an acceptable answer, he grunted and said he thought he had something in his trunk that could help me out. I waited expecting to see some super techy tire remover thingy when lo, he pulls out a tire iron. So that was his magical “something” that might be able to help me. The good news is he got the tire off, but he had to literally jump up and down on the tire iron, which semi-restored my masculinity since he wasn’t able to do it with his bare hands either. In the end, I was able to make my tire appointment with 5 minutes to spare (lousy pun) and I didn’t have to pay a tow truck.
The moral of the story: Sometimes in the name of “saving money” it is easy to be a cheapskate and not buy practical necessities (like AAA). Did I mention that was the THIRD time in 7 months that I could have used AAA? Saving money is good, but sometimes it is better to spend it than to take a gamble.