MONEY matters

If you’re among the millions of boomers beginning to plan for retirement, you’re most likely feeling a range of emotions that may range from euphoria to downright fear. Nonetheless, as you begin to prepare for this next phase of your life, step one is assessing where you stand financially right at this moment.

Yet on the road to assessing your financial readiness for retirement, unexpected events could occur that rock your world and change your life in ways probably unimaginable to most people.  The story below actually happened. Names have been changed but events that occurred are unfortunately real.

This description is taken from Wikipedia:

If you’re the type of person that’s a planner by nature, then most likely you’re also good at establishing financial goals grounded in reality, goals that are achievable, and that also require a bit of a stretch. After all, if you’re goal oriented, setting goals that are too easy to reach can’t compare to the thrill of reaching or exceeding a personally challenging goal.

When Pat and I are away for the weekend, we don't stay digitally connected. Part of the whole reason for getting away is to unplug from our daily lives. Even though we both own smartphones, we don't keep them turned on unless we are looking for a restaurant recommendation, need directions or meeting friends.

This past weekend we headed off for Mendocino. Since we were going to connect with a friend while there, I turned my cell phone on and checked my email only to discover a fraud alert notification from Chase. The email was alerting me about a suspicious attempt to use my credit card earlier that morning.  Since the transaction was coded as suspicious until cardholder verification, the transaction was denied. Pat and I checked to see if we both had our cards, (we did), but the attempt was made using a physical card. 

"Permission to be a beginner again is the greatest gift you can give yourself."

The following is an excerpt from a recent article, titled, For Retirees, a Million Dollar Illusion, that appeared in the New York Times, Your Money section. Anytime there’s an article that discusses your ‘number’ needed for a safe and secure retirement, I’m hooked.

The article drew so much attention and received so many follow-up comments that the author actually wrote a follow-up to his original article. I encourage you to read the original article in full as well as the follow-up and see for yourself if $1 million is enough to safely retire.

If you are looking to diversify your investment portfolio, (and you should be) here are two alternative investment strategies worth considering. But first, full disclosure: We have absolutely no affiliation to the firms mentioned below and receive zero compensation or any compensation, financial or non-financial from these firms. At times, we will recommend and acquire these investments to add to our investment management clients’ portfolios.  Both investments come with risk of loss, so you need to do your due diligence before investing.

Propser & Lending Club

Peer-to-peer lending has been popular in Europe for many years and it’s finally getting its due attention here in the states. The two leading companies in this space are Prosper and Lending Club. 

By creating a virtual platform bringing together borrowers and lenders aka-peer to peer- outside the conventional banking system, peer to peer lending is surely going to become more and more popular as word spreads.  NPR recently did a story on this new concept that you can read or listen to.

I had the pleasure of meeting one of the owners of Prosper at a recent breakfast meeting in San Francisco. His vision, strategy and track record left little doubt in my mind that this is an alternative investment that needs to be seriously considered.

Prosper for example offers 1, 3 and 5 year notes for investors with varying interest rate returns depending on the borrower’s credit score and overall risk profile. Monthly interest payments can be reinvested or deposited electronically into your checking account.

Lower risk seasoned returns at Prosper currently average 5.41% with higher risk notes earning 14.12% and higher. Investments in personal loans from qualified borrowers can be as little as $25. For fixed income investors seeking higher income, this could play a role in your portfolio. Being able to invest across different credit grades and estimated yields provides the diversity you need.

Perhaps it was my 3 years of experience working at Fair Isaac, home of the FICO credit score, that has me believing in this alternative investment so highly, yet peer-to-peer lending/investing in my humble opinion is the next big thing in the investing world. Check it out, make sure you fully understand the risks involved and see if it has a place in your portfolio.