MONEY matters

Having recently crossed over the 50 year young mark in one piece, (and knock on wood, no mid-life crisis to deal with thus far) my focus as a financial planner has been and will continue to be focused on retirement planning.  I’ve quickly learned that it’s one thing to be in your 30’s and even 40’s contemplating as well as advising clients on how to transition into a successful retirement, yet it’s a whole other ball game to be in your 50’s and suddenly be reflecting on my own retirement plans.  Even the word retirement has taken on new meaning for me. And who among has hasn’t received the infamous AARP welcome package only to stare at it in disbelief thinking “what, are you kidding me?”

What really concerns me about my fellow baby boomers nearing retirement is the risk they’re taking with their money. The great stock market and real estate crash of 2008 will be a memory that is not soon forgotten. One of the major fallouts from the crash, at least from my vantage point, is the undue risk people are taking with their investments in order to play the catch up game.

As often happens, I learn great lessons about money listening to my clients share their money stories with me. Here’s a story I had to share.

There’s a new money management website that has a free program called Pocketsmith. On it's web-based calendar, you schedule in your bills, salary, rent, etc. PocketSmith takes the information and generates forecasts which plans your upcoming annual budget. If budgeting and cash flow have been a challenge or you wish there was a calendar program that could help make sure you know when your bills need to be paid, check out Pocketsmith. They also have a decent blog.

Along with Money Magazine, PC Magazine Editor's and Kiplinger's - I too rate Mint.com as my top choice for a personal financial management tool. Mint's blog is excellent and worth following.  The Mint on-line community offers support, Q&A videos and more. Mint.com is a good looking website, easy to follow and simple to use - and it's free. Now there's no reason not to get your personal finances in order.

-How much money do you need to retire, or as I like to say, stop working for money, and not be at risk of outliving your financial resources?

When it comes to managing your personal finances, spending, particularly overspending is one of the most challenging aspects of living within your means. It’s not that you don’t have good intentions, because most people really do want to stay on a spending plan, it’s more complex than that. Spending money causes an emotional rush in our bodies. It’s a natural high. It’s short term pleasure for what could turn out to be long term debt. It’s the nexus between money and your emotional intelligence (EQ) that often creates the problem of overspending. 

Create a speed bump on the road to spending

For many investors, low cost index funds are just too boring. Here’s an article from the New York Times by Paul Sullivan titled, Index Funds, Dowdy to Some, Get Notable Endorsement, that adds some gravitas to the fans of index funds.

He interviews Burton Malkiel, author of investment advice books,who practices what he preaches. In his retirement portfolio, he says "all the serious money is indexed."

Visiting clients at their home is old school, I know that, but I still love it. Sometimes I feel like the small town doctor making house visits. At a recent client meeting in Sebastopol, CA, before we moved into the discussion about financial planning, my clients shared pictures of baby grey foxes that set up home right in their front yard.

Another local client always wraps up our meetings by opening a bottle of his own estate grown wine.  Living in wine country feels like a movie set as we sip and chat while overlooking his beautiful vineyards.

From the start of the financial crisis right up until today, we have been bombarded with story after story of how much wealth was vaporized from the global financial system. It seems all the news is about dollars and cents. How much did your 401k or 403b go down? How about your IRA’s, your home value? Everything is focused on the material-money, and little conversation is had discussing the emotional, physical and spiritual ramifications this crisis is having on regular people’s lives.

As a financial planner working mainly with couples, I see firsthand the damage this crisis has had and continues to have on relationships. Let’s face it; money is a tricky enough subject to deal with when things are good. But when the s**t hits the fan, whether it’s a job loss, too much credit card debt, too much spending, not enough saving, you name it, the inability to communicate and resolve conflict grows and grows and the risk to your relationship grows as well.