Romancing the Home
I started writing a serious post, but it just wasn’t happening. I took a break to find something amusing on TV and settled on Zombie House Flippers. I have thoughts.
For starters, their math doesn’t “math” for me, and I’ll explain that in a minute. But it made me think about how our DIY economy has grown beyond all measure, courtesy of these types of programs, customer workshops at Home Depot/Lowe’s, and social media. I applaud the industriousness, talent, and personal ambition of these creators.
But ….
The Kids are Alright
Recently, I went a couple of rounds (respectfully) with some readers on Facebook about my statement that I don’t think it’s productive for parents to tell their children that buying real estate is the “correct” path to wealth. I get that the real estate market sucks right now in lack of inventory, inflated prices, and that mortgage interest rates have adjusted upward. (My first mortgage was 11.85%. Either you can afford a mortgage, or you can’t. Rock bottom interest rates were never guaranteed. A decade of people got lucky, and that’s no longer the case. Get over it.)
Sentimental Stockholdings
As stock pickers, professionals and amateurs alike are terrible. Seriously, terrible. Like so many wise people before me, I would want you all to know that nobody knows anything about what’s going to happen. And it’s completely possible that a major player in the S&P 500 will be disrupted (think GE, now reinvented and back in the index) or a minor player on the NASDAQ (think any number of de-listed tech or bio companies) will cease to exist. There are no guarantees.
What if You Planned a Sabbatical?
Let me cut to the chase: I’m giving you permission to plan a sabbatical. Do I have your attention?
Traditionally, we have divided our lifespans into three unequal stages: growing up, working, and retiring. Of the three, a 30- or 40-year working career usually dwarfs the other two stages. In less than a generation, however, we have seen our retirement stage catching up to our working stage. For some of us, we may live (hopefully in good health and security) another 35+ years beyond age 65. That’s a retirement as long as our working careers.
Everyone, Everywhere, All the Time
I’m having a delightful time reading Dr. Andrew Scott’s new release, The Longevity Imperative. Maybe it’s delightful because he’s saying many of the things I’ve been saying (and living!) as I transit my second half. I mean, who can resist someone who agrees with you? In this book, Scott discusses how we have two ways to view an aging society: as a problem or an opportunity. I strongly favor the latter, because I’m far from being ready to be put out to pasture. #NotYoungNotDone
Family is a Fixed Expense
I just returned from a drive to see Grandchild #1 (Ava) play soccer on her college club team two-and-a-half hours north. A wave. A smile. I stuffed some cash into her hand. She laughed and thanked us because she knows that’s what we do. Then, she headed to Texas Roadhouse with the team, and we headed home, two-and-a-half hours south. We may have paid for her dinner (with a popcorn booster purchase the week prior). I didn’t check what I was funding because she’s a grandchild.
If you want a Successful Financial Plan for Retirement, you need a Longevity Plan Too
As we build out our “successful second half” capabilities, I keep returning to the notion that we have such a long runway from our 50s to the end of life (like, another 50!) that saying we are planning for retirement feels wrong. Rather, I think we should replace the “R-word” with the term “post-work” because none of us is going to be in the state of retirement for 30 or 40 years. Instead, we’re going to be doing and being many different things during that time, all kinds of “non-retirement” things. As a result, much of the financial conversation stops being about investment portfolios and insurance and more about:
· Health and healthspan
· Caregiving and family obligations
· Geography and community
· Philanthropy and legacy
· Consulting, volunteering and encore entrepreneurship
· AND … optimized distribution and retirement income from portfolios and insurance
Retirement is Dead! Long Live Continuous Reinvention!
According to the American Heritage Dictionary, retirement is the “withdrawal from one's occupation or position, especially upon reaching a certain age.” Note that the definition uses the word “withdrawal” and not “end.” The definition of “withdrawal” uses the words “retreat” and “removal.” Again, not the word “end.” That should be instructive for us in the 21st Century.
Retirement is not an end. We do not expire. Ageism in society notwithstanding, we have choices:
· Fund retirement in our 50s to support ourselves in our 80s and 90s. Or don’t.
· Be curious and embrace lifelong learning to nourish our brains. Or don’t.
· Invest in our health so that our bodies will stand a chance of taking us the distance under our own steam. Or don’t.
Should You Undertake Your Children’s College Debt?
I’m diving into an ugly discussion here about a middle-class reality: student debt.
I’ve seen this movie too many times. Far be it from me to cast aspersions on the failings of my clients or their children. But at least a couple times a year, I would find clients who had signed on to pay for their children’s college debt, assuming that once out of school, the child would be responsible for repayment. Alas, the child decided (for whatever reason) they were not interested in “adulting” at that level. And Mom and Dad, responsible on paper, continued to make the payments, often at the expense of their own retirement security.
The Feminization of Wealth
We’re going to hear more and more about the “feminization of wealth” as the great wealth transfer—$80 to $90 trillion from Boomers to Millennials—takes place. By the end of the decade, we expect that women will control $30 trillion, and, eventually, about 60% of all wealth in the U.S. For perspective, U.S. gross domestic product for 2023 was just under $28 trillion.
The Max Match, The Max Contribution and the Max After Tax
Prospective clients would regularly tell me they are “maxing” their 401(k)s. Upon closer inspection, I’d discover that they were not maxing their 401(k)s. What were they doing? They were maxing their employer match. This happens often enough that I think it bears explaining. When financial planners say you should “max your contribution to your 401(k),” I don’t think it means what you think it means. (See The Princess Bride.)
Nobody Talks About their Financial Failures
Let me tell you a “not-so” secret: I bought AAPL (Apple) in 2001 at $17. I had a feeling that the iTunes thing was going to be big. And I was right. Yippee for me! Having just come off the bursting of the dot-com bubble and the horror of 9/11, I made a great call.
The Role Of Allies (Part II)
I few weeks ago, I posted What is the Role of Allies? (Part I), wherein I proposed that Allies who are only mentors are coming up short. Continued economic expansion requires that Allies actively identify and recruit more women into senior leadership because, in a world that is increasingly older and female, women’s wisdom and identification with the consumer population is essential for growth.