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 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.
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.
Did you hear the latest on the trade talks with China or the health of the economy? If you somehow missed it, you’ll probably hear about it later today or tomorrow. It may be on the screen at the gym. You’ll turn on a radio and there it is. It seems impossible to escape the financial news. Does listening to any of it help you to invest your money more wisely. The answer is, probably not. The point is that we’re bombarded with all kinds of “information” that is supposedly making us more informed about markets and investing. The ‘news’ usually focuses on telling us what has happened. It certainly doesn’t help inform us of what is likely to happen.
Captain Jack Sparrow in the movie “Pirates of the Caribbean” has been forced ashore by a mutinous crew. We see him stranded on an island drinking rum with his lovely companion beside a fire. They are discussing his ship. “It’s not just a keel, a hull, and a deck and sails. That’s what a ship needs. But what a ship is, what the Black Pearl really is . . . is freedom.” As an idealistic young investor in the ‘80s I felt the same way about the investment of my retirement savings. Those investments represented financial freedom. What do your financial investments mean to you?
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.
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.