Wish you were a better manager of your money? We make so many decisions every day. We can’t possibly make good choices all the time. When it comes to our hard earned dollars we want to make the best use of them possible, especially if we want to retire some day. Here are some helpful hints to being a better money manager. I recently came across a Seinfeld video where he goes on a rant about cookies. Paraphrasing he says, “You never see them during the day. But sometime after 9 p.m. they begin to appear. They wait until you’re tired and weak. The cookies, all lined up in the boxes, look like a D-Day beach landing troop carrier ready to attack.” He’s talking about the temptation and weakness we have for consuming cookies or some sweet treat late at night…
I recently spent $3,000 on car repairs. I’d avoided dealing with it for a few months but couldn’t put it off any longer. Nothing against my excellent mechanic, but I’d just didn’t want to part with the money. I’d rather have that money stay in my bank account as long as it can – OK, maybe I’m overly frugal. That said, I can understand how some people may procrastinate when it comes to financial planning services. We’ve all been there. How much longer can I put this off without incurring even more expense? It got me to thinking about the cost of procrastination. I’ve begun to suspect that people think about financial planning services in a similar way. It can be expensive, initially. You could easily spend a couple of thousand dollars or more engaging a financial planning professional. People tend to wait until there’s a dire need before seeking help.
Do you know how much a half gallon of orange juice costs? Think carefully. What was once a 64-ounce container of juice is now 59 ounces. A pint of Hagen Daz is just 14 ounces (Ben & Jerry’s still has a 16 ounce “pint.”) How do you compare? Take another example, hotel rooms. I found a great place to stay in Sonoma for under $200 a night in February. This summer there was nothing under $300 at the same place. I recently purchased artwork for my office. I had no idea how much to offer, except that it had to be lower than the asking price! Plane flights, cars…ditto. Clearly, some prices do vary based on seasonal factors. Yet, is there such a thing as the “real” or best price for anything?
The objective of investing is not to make a “big pile of money.” Or is it? This is not a real goal – it is a fairy tale. We think we’d love to make a “fortune.” But how much is a big pile, a lot, or even a boatload? How much is enough? What do we need it for? What are we trying to accomplish?
Imagine you have come to the office of Stoffer Wealth Advisors for a consultation. You need some help in reviewing and structuring your investments. You are concerned about securing a good rate of return on your investments and want to understand what will be the best approach. Here’s how the conversation might go.
...When an old acquaintance saw the name of my business, Stoffer Wealth Advisors, he said, “As soon as I have some wealth to manage I’ll give you a call.” Clearly he was thinking of wealth only in its most narrow definition: an abundance of material possessions or money.
When we believe more is the answer, it can impact us in unforeseen ways. Humans just want more. We want more happiness…more money, more success, more time, more vacations, more life. Aspiration does seem to be a healthy thing. As humans, we seem to value growth and progress. However, money represents many different things to different people. When it comes to money, needing more, wanting more and having more can be complicated. The danger in the pursuit of money is that you risk falling into a rabbit hole - where you find yourself navigating a seemingly endless confusion of paths and choices, and where it is so easy to lose your way.
With all the data breaches that have occurred over the last couple of years it is hard to know when to actually ‘do something’ about protecting our credit. Having read a fair amount about the Equifax data breach issue over the last couple weeks I’m still somewhat skeptical of the level of protection we can actually achieve. In some respects, the actions we have at our disposal seem tantamount to “closing the barn door after the horse has run off” (thanks for that one mom!)
If you wanted to leave some money to your children, how would you split it between them? You could come up with numbers based upon their likely need for help. Or you could simply divide it equally…after all you love them all, well…equally. Equal distribution is probably the most common way of dividing assets. Yet, what about the situation where one of the kids is very successful financially and has no need for your money? What message does an unequal gift send? Conversely, if you were one of the children on the receiving end…what if mom and dad left all (or even most) of the money and investments to your sibling because you ‘don't need it?’ You might feel ‘less loved’, or slighted in some way, left with a nagging feeling that perhaps they really did love them a bit more than you.
People tend to embrace this statement. It sounds true: surely only shallow, materialistic people would insist that money could buy happiness. To utter the thought aloud is almost like a declaration that we aren’t materialistic (and hopefully not shallow!) Scientists have long been perplexed about how to measure such a thing as happiness. Studies that examine relationships between money and happiness raise the idea that although money may not directly bring us happiness, it has the potential to. Believing that money can’t buy happiness is a bold and sweeping generalization that weakens under scrutiny. The authors of the book, Your Money or Your Life present a “fulfillment curve.” As the curve in the diagram shows, money spent to meet basic needs brings the most precipitous rise in satisfaction.
Retirement success means something different to each of us. Some people see themselves working in retirement because that's what they've always done. Others are afraid to stop working for fear of running out of money. Some people just want to feel secure when they stop working and know they'll have sufficient money to live. Since retirement isn't really a destination, but a process, try our 3 P's to help create your vision of a successful retirement.