James C. Molet's Blog, page 30

The Cross-Border Family Wealth Guide: A SavvyReview

The Cross-Border Family Wealth Guide: Advice on Taxes, Investing, Real Estate, and Retirement for Global Families in the U.S. and Abroad Hardcover: 272 pages Publisher: Wiley (2017)The goal of the book is to provide a practical guide on the cross-border wealth ownership and transmission for globally mobile families. The Cross-Border Family Wealth Guide’s table of contents... Read Article →

Understanding the Racial Wealth Gap

In a new report, The Asset Value of Whiteness: Understanding the Racial Wealth Gap, authors Amy Traub, Laura Sullivan, Tatjana Meschede, and Tom Shapiro accurately note issues of racial inequity are increasingly at the forefront of America’s public debate and probe the causes of the racial wealth gap. The racial wealth gap – different from... Read Article →

Is Your Road to Retirement Poorly Mapped Out?

The following is a guest post from Randy Becker, a retirement planning professional and owner of the Becker Retirement Group in Bellevue, Washington. He has 30 years of experience in the insurance industry and holds a degree in personal financial planning from Metropolitan State College of Denver. Can you imagine going on an extended vacation without making... Read Article →

Is Your Road to Retirement Poorly Mapped Out?

The following is a guest post from Randy Becker, a retirement planning professional and owner of the Becker Retirement Group in Bellevue, Washington. He has 30 years of experience in the insurance industry and holds a degree in personal financial planning from Metropolitan State College of Denver.

Can you imagine going on an extended vacation without making any plans?

No websites or tour guides consulted. No hotel reservations made. No itinerary mapped out.

Of course not. If you wanted your vacation to be a success, you’d budget enough money to cover your costs. You’d know when you were going, how long you could stay and at least generally what you would do while there.

 

But when it comes to the longest vacation most people will ever take – retirement – fewer than half of all Americans have a formal plan.

And that can spell trouble.

There’s nothing worse than being 85 years old, full of life, and being flat broke. But it takes some work to avoid the many pitfalls that can ruin your golden years. Inflation, taxes, bad health and bad investments can be devastating.

Develop Your Retirement Plan

It’s up to you to have a sound plan, so you can focus on the important aspects of a wonderful retirement life. Here are some tips for getting started so you’ll know you’re ready to begin your retirement journey:

Get everybody on board. You and your spouse need to agree on your retirement goals – and the financial decisions that will get you there. Start talking about priorities: Do you want to relocate? Stay close to the grandkids? Are you emotionally and physically ready for retirement? How long will each of you keep working, and how will that affect the income streams you’ll rely on when those paychecks stop?
Make a budget. Most people think their expenses will go down after they retire, but usually that doesn’t happen. Your wardrobe budget might go down when you aren’t working, but other expenses might go up if you travel, enjoy new hobbies, or start going out more for dinner, movies and concerts.
Know where your money will come from. Most financial professionals agree that income is king when it comes to retirement planning. A pile of scattered paperwork and account statements is not a plan. A good advisor can help you maximize your Social Security benefits, come up with tax-efficient distribution strategy and talk to you about other options, such as annuities, that can guarantee income in retirement. This is vital as people now live 20, 30 or even 40 years after retiring.
Know your retirement timeline and reevaluate your risk tolerance. One of the biggest mistakes investors nearing retirement make is sticking with the same advisor and portfolio they had when they were younger. You’ll need to move to a more diversified approach, with fewer risks and more protection for that all-important income.

Retirement is about more than money. There’s also the adjustment retirees must make from working every day to suddenly having too much time on their hands.

Final Thoughts

Perpetual Saturdays are exciting for about a week. Maybe you’ll find ways to volunteer. Maybe you’ll learn to paint or play guitar. Maybe you’ll end up working part-time. But most people discover that they need something in retirement that will keep them engaged and excited about life.

Training for a Tough Mudder: Update 2

This is the second update tracking our progress as my wife and I prepare for our first Tough Mudder event, a Tough Mudder Half at Mesa, Arizona in April. In the first update I noted that while researching the various obstacles we will encounter during the event, it became clear that upper body strength, and the ability... Read Article →

A Richer Understanding: A Fuller Perspective

I have conversations with connections on social media and friends daily about work. In many of the discussions work is simply a synonym for money. It doesn’t make a difference if our work environment is in our home, a downtown office building, factory, retail store, indoors or outside, whether our dress is professional or casual,... Read Article →

Here’s Another Way Wells Fargo Took Advantage Of Customers

By Jesse Eisinger, ProPublica Wells Fargo, the largest mortgage lender in the country, portrays itself as a stalwart bank that puts customers first. That reputation shattered in September, when it was fined $185 million for illegally opening as many as 2 million deposit and credit-card accounts without customers’ knowledge. Now four former Wells Fargo employees... Read Article →

5 Steps for Choosing the Best Franchise

The following is a contributed post from Jenna, a freelance blogger who is mainly focused on business innovation. Many people stick to their corporate jobs, believing that entrepreneurship is only for the few, the lucky, and the brave. Although they’re miserable, often working too many hours, putting up with bad bosses, irrational corporate policies, and... Read Article →

What to Make of the Kansas Experiment

In 2010, Sam Brownback, a sitting U.S. senator, ran for governor of Kansas on an economic platform created by the American Legislative Exchange Council, a group that specializes in promoting draft legislation. Kansas Governor Sam Brownback Once elected, Brownback convinced state legislators to cut personal income tax rates across the board and eliminate the top tax bracket. The tax cuts were... Read Article →

A Richer Understanding: Thinking About Maslow and Poverty

I have been thinking about poverty – causes, impacts and solutions – a lot the last year or so and have spent the last few days jotting down some thoughts. I believe this series, which focuses more on the humanity when thinking about personal finance, and less on the nuts and bolts of saving/investing, is the perfect home for this latest post.

 

As you close in on financial freedom, you will find that life’s options (e.g. where to shop, where to live, what to eat, etc.) increase exponentially, you have a greater ability to engage in introspection and hopefully, a desire to think – and act – beyond and outside of yourself.

Conversely, those that are mired in poverty have fewer, if any, real options, are less likely to engage in introspection and generally don’t have the option of thinking too much beyond themselves. They are very much stuck in the moment, fighting for survival. It isn’t as if they don’t have the ability or are opposed to introspection and thinking beyond themselves, they simply don’t have the time or energy.

A Lonely Road, the fourth entry in the A Region Left Behind: Lost Opportunity in the Deep South series, courtesy of The Washington Post, perfectly captures this phenomenon. The article tells the story of Lauren, a 28-year old resident of Forest Park, Georgia, and follows her as she hunts for a job.

One day on the hunt is described as follows: sixty-nine stops on a bus, a nine-minute train ride, an additional forty-nine stops on a bus and a quarter-mile walk. Four hours round trip just to submit a job application. She probably wasn’t giving any thought to how the stock market had performed over the last week, whether she preferred kale or spinach in her smoothies, should she work chest or shoulders later at the gym, or when she might make the next contribution to her IRA during that four-hour journey.

Of course, my insight isn’t particularly keen nor new. In his 1943 paper, A Theory of Human Motivation, Abraham Maslow described his ‘hierarchy of needs’ a now well-known psychology theory. Those who have attained financial freedom are more likely to be comfortably ensconced at the top of the pyramid, having achieved self-actualization. Those who have achieved a measure of job security and financial stability are likely involved in loving/fruitful relationships and have a high level of self-esteem. Conversely, those who are mired in poverty, who struggle to establish a firm financial foundation, continually bounce between the lower two levels, physiological and safety.

It’s hard (impossible?) to have high self-esteem, gain the realization or fulfillment of one’s talents and potentialities, or think too far beyond one’s self (and the present situation) if struggling to keep the heat on in an apartment and aren’t 100% sure where the next meal will come from.

There is no doubt that those who find themselves mired in poverty have likely made some bad choices. Maybe even some terrible choices. However, haven’t we all? The unfortunate reality is that many poor have never been in a position to make better choices, don’t have reasonable access to capital, and they find themselves mired in a situation that becomes harder to break free of, particularly in a system and economic environment that is not very forgiving.

A statement that has stuck with me since I first saw the documentary Spent: Looking for Change, a SavvyRecommendation, nearly two years ago, was uttered by Justin, a 20-something who started a small production company that shoots videos for corporate clients and is one of the unbanked; someone who relies on check cashing outlets and is all too familiar with payday loans. He noted, “People often judge me on the choices I’ve made, not knowing the options I had.”

Perhaps as you settle into a higher level on Maslow’s pyramid, you will judge less and spend some of your own time and energy looking for ways (e.g. volunteering, making charitable contributions, becoming politically active, sharing personal finance tips, etc.) to help others move higher. If you’re able, look beyond yourself.