Jonathan Clements's Blog, page 156

The Other Enough

I SPENT NINE YEARS at English boarding schools. The food was beyond disgusting. The buildings were cold and drafty. I was constantly bullied. I would go as long as 14 weeks at a time without seeing my parents, who were based first in Bangladesh and then Washington, D.C.

But I also knew I was getting a good education, and I opted to stay when I had the chance to return home and go to the local U.S. high school. I had this notion—perhaps partly the result of my Catholic upbringing—that there would be a payoff for my suffering, that if I kept my head down and kept studying, I’d be rewarded. It was a strange act of delayed gratification for a teenager. But it worked out. I managed to gain admission to one of the world’s great universities, though it was a close call and, no, that isn’t false modesty.

After I left boarding school and before I went to Cambridge, I made a conscious decision to reinvent myself as someone more outgoing and confident. I wanted to leave behind the tearful, vulnerable kid I’d been, and I knew there’d be few students at Cambridge who knew my old self. That, too, worked out. I arrived at college determined to make my mark, and soon found myself editor of the student newspaper.

I think that adopted self-confidence, coupled with the mindset that if I sacrifice and suffer now, I’d be rewarded later, was the reason I had a successful career and became a reasonably good amateur runner. I think it’s also a key reason I’ve been a prodigious saver and that I’ve had success as an investor, tenaciously buying stocks when things look bleak.

That willingness to sacrifice for future benefit is still with me—but it’s an attitude I find harder to justify. After all, at age 60, if I sacrifice now, will I still be around to collect my reward? As my stepfather would joke toward the end of his life, “I don’t buy green bananas.”

This is obviously an issue for those—like me—who have led frugal lives and have thoughts of spending some of the money they’ve amassed. But it’s also a question for those—again like me—who continue to work hard in their 60s, imagining there will be some reward down the road.

To be sure, work itself can be rewarding. There can be great pleasure in striving for something we care passionately about. When we choose to retire, we’re declaring, “I’ve accumulated enough.” But we aren’t necessarily declaring, “I’ve done enough.”

Still, there’s a crucial difference between what we do during our career and what we do once we're retired. During retirement, how we spend our days is largely our choice. We get to focus on activities we enjoy and find fulfilling. Typically, we're living in the moment, rather than building toward some future success—a promotion, a pay raise, some goal that’s important to our employer.

Many folks are happy to get off the career treadmill. But for others, including me, calling it quits doesn’t come easily. We humans are inherently restless. We want more stuff, more money and, yes, another success. And when we get these things, we quickly grow dissatisfied and start hankering after something else. We never achieve that final, fully satisfying triumph that we crave.

This is something I think about way too much. For the past few years, I have—in my head—been negotiating the terms of my surrender to the joys of retirement. I’ve been trying to figure out when I can declare that I've had enough career accomplishments and I can shift into retirement mode, focusing less on some elusive future success, and more on enjoying the here and now.

As I’ve written before, I think it’s important to figure out ahead of time what success looks like, so we find it easier to declare victory. Four years ago, I decided that success for this website would be notching 500,000 pageviews in a month. HumbleDollar got there in February, with 510,000 pages viewed. To be sure, the site remains minuscule by internet standards. Still, I’m declaring victory.

Do I feel a sense of lasting triumph? No. But I suspect that this is as good as it’s going to get for HumbleDollar, so I’ve decided to tamp down my ambitions for the site and work a little less hard going forward. As you might have noticed, the site has been publishing somewhat fewer articles of late, often just one new piece each day. Fear not: I have no intention of shutting down HumbleDollar. I hope to keep the site going for many years. I'm not done doing—but I am done chasing success.

Jonathan Clements is the founder and editor of HumbleDollar. Follow him on Twitter @ClementsMoney and on Facebook, and check out his earlier articles.

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Aftermath of a Scam

IT ALL STARTED WITH a purchase alert. With so much account hacking, we have alerts on our phones for every new purchase, so we can immediately respond if there’s an unauthorized transaction. What we didn’t know was that disputing charges can be so Kafkaesque.

My wife Jiab asked if I had just purchased anything online from Walmart. I had not. There were two suspect charges, each for about $50, simultaneously charged to our Chase and Capital One credit cards. Chase required only a five-minute call for the charge to be reversed and removed from our account. Capital One said it was happy to tag the purchase as disputed.

We then called Walmart to stop delivery of the two purchases, but the representative said the goods had already been shipped and couldn’t be recalled. Strangely, both purchases were being shipped to us and not to another address, which is what we thought scammers would do.

Two days later, FedEx delivered the goods—two children’s jackets and a large dresser. I heard the thud of the delivery at our door late in the evening, so I ran outside in hastily donned sweats and socks. I told the FedEx guy to take them back as they weren’t our purchases. He said he couldn’t cancel the delivery before it was processed and that wouldn’t happen till tomorrow.

The next day, a second FedEx guy came to our door with another delivery, a legit one. He said the first FedEx guy lied and could have taken the stuff back but just didn’t want to. As for him, he couldn’t take them back because the fraudulent delivery was from FedEx Ground and he worked for a different division. He did explain that the scammers gave our actual address to not give away their location, and had probably planned to drive by and grab the goods from our doorstep.

Laden with unbought goods, we again called Walmart to take the coats and dresser back. We got caught in a phone loop because we weren’t calling about an existing order but rather ones we’d never made, and so they didn’t exist in the system. I had to run errands that day, so I decided to drop by the local Walmart.

The people at the counter were confused about what I was describing. The store manager never came to the front desk but called from somewhere in the back. Her disembodied voice said they were not set up for pickup and that I should call the Walmart helpline—again.

Returning home, I finally got a human being on the Walmart helpline who said he didn’t know what I should do with the stuff. I responded that I might as well donate the items. The phone agent’s “whatever” was a bit noncommittal, so I hung up and called again, this time asking for a manager.

The manager who answered was unsure of what to do, put me on pause, and then said as far as Walmart was concerned it was my choice. He thought that donation was a good idea.

We dropped off the jackets at a shelter and arranged to have the dresser picked up. Now given away and with receipts for proof, we were finally finished with the unsought goods. It was all slightly aggravating, but no harm done. Or so we thought.

A couple of days later, Capital One concluded its “investigation” and decided the charges were legitimate. The charge to our card would stand solely based on the goods being delivered to our address. We called and had a long back-and-forth with the agent.

We asked if he talked to Walmart or FedEx as part of the investigation. He said no. We asked if he’d like records of our calls to Walmart or our receipts for the donations. Again, the agent said no.

The agent then started talking in a condescending manner, saying, “Jim, let’s pretend we are lawyers, and let’s review the evidence we have together.” He then just talked about the shipping address.

At the end of his long spiel, I asked him if he was or ever had been an actual lawyer. He said “no,” after which I informed him that I had been a litigation attorney. I then proceeded to expel my built-up magma like he was Pompeii and I was Vesuvius. For good measure, Jiab asked him why, if we wanted to organize this whole scam, we’d do it for a measly $50?

He put us on hold and then came back to say his manager would be happy to look into it one more time. A couple of days later, Capital One notified us the charge was yet again deemed our responsibility to pay based on—wait for it—the sole fact that it was delivered to our address.

At this point, we laughed because we knew the hassle wasn’t worth any more of our efforts. We ate the $50, just glad that this was the extent of our loss.

Jiab called Capital One a couple of days later to cancel our card. When we explained that we weren’t happy with Capital One’s service compared to Chase’s, suddenly the agent was all too happy to immediately wipe out the $50 charge to keep us. How charitable, but a bit too late.

A large part of the problem we encountered is the convenience of automation. The system is designed for the path that life almost always takes. Goods delivered to your home? They’re yours. Try to go out of your way to give something back that you didn’t pay for? Sorry, that’s too uncommon and we don’t know how to handle it.

A friend of mine once got a $100 bill among the $20s she expected at an ATM. She went inside the bank to return the $80 overage. She sat for a long time as managers huddled and re-huddled till they said they had no procedure to account for it. They said she could do them a favor and just keep it.

Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He's the author of a three-book series on how to teach students about behavioral economics and media literacy. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. They have a two-book series coming out in 2023, Behavioral Economics: A Guide for Youth in Making Choices and The Social Media Diet: A Guide for Young People to Be Smarter Online Users and Consumers. Check out Jim's earlier articles.

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Character Building

HAVE YOU THOUGHT about what made you the person you are—the way you think about money, life, your behaviors, your likes and dislikes? When I look at my own life, I can clearly see the impact of my childhood.

My mother and grandmother made a lot of my and my sister’s clothes. I recall those paper dress patterns all over the apartment. Is that why I dislike shopping for clothes? I’m happy to let my wife and daughter decide what I should wear. The notion of shopping is an anathema to me.

Neither my parents nor my grandparents went to college. In fact, college was never mentioned in my house. Instead, as the Silhouettes sang, “get a job” was the order of the day. Is that why I never thought of college until I got out of the Army, eight years after high school? Or why I vowed that our four children would go to good colleges—and it was my responsibility to pay?

My father worked 12 hours a day, six days a week. For most of my youth, he wouldn’t get paid if he didn’t sell a car. I worked nearly that much myself. I worked at home after a day in the office and on vacations. I always had my laptop handy. As I saw it, hard work and creating results were the ways to move ahead.

Is there any doubt why I have disdain for quiet quitters, who someday will moan about not receiving what they deserved from their careers? Surveys say 50% of workers do just the minimum to get by. We used to call them losers.

My father was forced to retire at 66, and then my parents lived on Social Security alone. I vowed never to be in that position. I stayed with one employer, earned a pension, saved, invested and worked until 67.

I lived in a small apartment until I got married. Taking care of a house, inside and out, was never my forte. Is that why I break out in a sweat within 100 feet of a Home Depot? Is it why I pay experts to make repairs? I wasn’t unhappy leaving our house of 43 years for a condo. Someone asked me how I could leave all the memories behind. The memories didn’t reside in the house—I have them all within me.

My parents were affected by the Great Depression. They had no trust in the stock market and so never invested. Banks were not to be trusted, either. What modest money they had was in a checking account. I began investing when I was 18—not successfully at that point, but consistently thereafter. My parents would be shocked at my financial position today.

My parents were frugal. My mother never wanted to spend money. She reused aluminum foil. My parents never had a credit card. I consider myself erratically frugal. I agonize over a small purchase and then spend thousands on something else. It’s worse the older I get. I use credit cards just to earn rewards.

My mother was a real homebody, never wanting to go anywhere. She once refused to go to Germany on a trip my father won in a sales contest. I always felt sorry for him. Is that why I can’t stop traveling? I know the one regret I’ll have is not seeing more places. Still, I’ve ridden a camel in Morocco, kissed the Blarney Stone and placed a prayer in the Western Wall in Jerusalem.

One of my grandfathers was cool and detached. I have no memory of him coming to our apartment as a child. Neither my grandparents nor my parents came to my Little League games or school events. Is that why my wife and I spend many happy hours in retirement attending grandchildren's soccer, baseball and lacrosse games, band concerts and other activities—and why we did the same for our children?

I think I know what made me me. Have you thought about what made you you?

Richard Quinn blogs at QuinnsCommentary.net. Before retiring in 2010, Dick was a compensation and benefits executive. Follow him on Twitter @QuinnsComments and check out his earlier articles.

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Third Time’s a Charm

I MADE A MAJOR change late in my career, leaving behind my job as a financial manager at a dying computer business. I knew I needed to change. If I didn’t, there was a good chance I’d soon be out of work.

My new job, however, wasn’t what I expected.

I’d been with the computer company since graduating college. I was in my mid-50s and smart enough financially to know I still needed more savings for a successful retirement. The company had frozen the company-funded pension plan. Instead, it offered a 401(k) where we—the employees—had to make investment decisions. Most of my colleagues had little or no investing experience and had relied on the company-funded pension plan to provide their retirement needs. I helped fellow employees with what knowledge I had.

Around this time, my parents were forced into early retirement by the company where they both worked. They asked me to help them with their retirement decisions, including meeting with a financial advisor who’d been recommended to them. Because of the good decisions made at this time, my parents’ retirement funds lasted until they were in their 90s, even with their early retirement. My brother and I were able to continue to manage their retirement accounts and handle our mother’s assisted living expenses until she passed away at 100.

After these experiences, I decided to go back to school to obtain the required licenses to work in the financial services industry. My hope was to help others approaching retirement make sound financial choices.

At the first firm I joined, I was told, “Everybody needed whole-life insurance.” I was told the policies would provide clients’ entire retirement needs, as well as any financial needs during their working years, because they could borrow from the policy. An IRA and other personal savings accounts were—supposedly—not needed. Available funds should be put into whole-life policies. Clients weren’t told about the high commissions that came with the policies or that borrowed funds would need to be paid back.

I was informed by my managers that whole-life insurance was what I “needed” to sell. If folks already owned one policy, they needed two or three. Colleagues who were successful told me to search only for wealthy potential customers who could afford the policies and not to be too customer-oriented. Whole-life insurance offers very high commissions—many times more than what a salesperson would get for selling an equivalent amount of term-life coverage. The insurance agent receives 30% to 90% of the premiums paid by the client in the first year of a whole-life policy. In later years, the agent might receive anywhere from 3% to 10% of each year’s premium, which are called “renewal” or “trailing” commissions.

Because I was, by nature, less of a salesperson and more of a financial advisor, I left and joined another firm. Again, I thought initially it would be a good fit, allowing me to help people achieve their financial goals. But shortly after joining, I was pulled into a manager’s office and told that, if I wanted to succeed at the firm, I needed to sell the company’s annuity product. I would receive good commissions, keep my job and “everybody needed an annuity” because it would provide all their retirement needs. With an annuity, clients also didn’t need an IRA or other savings accounts. Available funds should be put into the annuity.

If customers had one annuity, they should have two. Colleagues who sold the company’s annuity product were handsomely compensated. Those who didn’t would have trouble meeting their sales goals, were put on notice and were soon let go. Among new hires, just 20% survived at the firm. Typically, brokers received a fixed fee or a 2% to 3% commission when they advised a client on investing through an IRA or another type of retirement plan. But when they sold an annuity, the commission was as high as 7% to 10% of the large six-figure sum usually invested. Once again, this second firm didn’t prove to be a good fit for me.

With my third job in the financial-services industry, I was told to always do what was best suited for the client. If I did this, I would be successful in my career. I would only have problems if the company found I was doing otherwise—selling a product that wasn’t the best fit for the customer. I was paid a salary, not a commission based on sales. I received a bonus when I received good reviews in the customer surveys that were frequently conducted by the firm. I ended my career at this firm and am now happily retired, feeling I was able to educate people and help them to make sound financial decisions that best suited their goals.

My advice: Don’t hesitate to ask financial advisors how they’re compensated. Ask whether they have a fiduciary responsibility to help you—the client—make good financial decisions. If they don’t, their recommendations may be best suited not for your retirement goals, but theirs.

Paul Puglia lives with his wife in North Carolina. They play golf, enjoy visiting their kids and grandkids, and take trips during a retirement that they both worked hard to achieve.

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Vet These Policies

YOU LOVE THEM LIKE family. You want them to have the best care possible. You have insurance for yourself, your family, your home, your car and your upcoming vacation. Why not for your pet?

One of our friends recently opted for pet insurance—after multiple trips to the vet, with more than 20 medications prescribed. Intrigued by the idea of pet insurance? Here are eight choices and what they offer:

Pets Best covers everything, including medications, physical therapy and even acupuncture. It also covers senior pets and makes it easy by paying the veterinarian directly. You can decide if you want a $5,000 annual cap on reimbursement or unlimited coverage. You can also customize your policy. Payment options are monthly, quarterly or semiannually.
Trupanion may be your choice if you prefer to avoid paying deductibles. It will also pay the veterinarian directly, and there’s no cap on the number of claims you can submit. There is, however, a limit to how much you can customize your policy.
Lemonade is great for digital claims. Your claim can be reimbursed within minutes through an app on your phone. The coverage isn’t available in all states.
ASPCA offers complete and accident-only coverage. Coverage starts at $10 a month and allows you to adjust the reimbursements to suit your budget.
Pumpkin plans can have annual caps on reimbursements, such as $20,000 for dogs and $15,000 for cats, though pet owners can also pay up for unlimited coverage.
Healthy Paws doesn’t cover hip dysplasia, a common dog problem, if a pet is six years or older at the time of enrollment.
Prudent Pet offers acupuncture and chiropractic care coverage if a veterinarian recommends it. It may have a longer claim-processing wait time than some of the other policies.
Nationwide covers cats and dogs, but also exotic pets. This will likely be your only choice if you have a mini pig, bird or some unusual species. You have to call to get a quote.

With all these offerings, how do you decide what you need? Your choices for pet insurance break down into three broad categories: wellness and routine care, accident and illness, or accident only. Be aware that pet insurance does not cover pre-existing conditions.

Reimbursement can become complicated. Some policies have a maximum amount they’ll pay. Others cover a portion of your bill, somewhere between 70% and 90%. Most have a deductible, the amount you must pay before reimbursement.

Your premiums will be based on the breed of pet you have. Those with a higher risk, due to common illnesses or injuries, are more expensive. Your pet’s age is also a factor, and so is the size of the deductible you select. In 2021, the average cost to insure a dog was some $50 a month, while the average cost for a cat was around $30.

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Case Closed

EVERYTHING I KNOW about managing money I learned in court. As part of my legal practice, I represent people involved in disputes over money or property. These can include claims against financial advisors for alleged misconduct, contested wills and trust disputes, and family members at odds over a family business.

These disputes can teach us important personal finance lessons. Here are four lessons—learned the hard way—from four cases my firm handled. All are based on an actual case, though names and details are changed to protect the litigants’ privacy.

Case No. 1: Life insurance goes to the ex-spouse. Jane and John’s divorce was bitter. Even after their divorce was final, Jane had to go back to court asking that John be held in contempt for failing to pay child support. Imagine, then, Jane’s surprise when 15 years later she received a letter from a life insurance company expressing its condolences on John’s death—and enclosing the forms necessary to claim his $1 million policy.

Jane was listed as the beneficiary of John’s life insurance policy, which the insurance company was obligated to follow under state law. John’s widow promptly sued to try to prevent Jane from getting the payment. Still, the court awarded the $1 million policy proceeds to Jane, along with a small bank account, for which Jane was also listed as a joint owner at John’s death.

Lesson learned: If you’re contemplating divorce, identify all financial assets which have a survivorship or beneficiary designation. These can include life insurance, and bank, brokerage, and retirement accounts. Discuss with your divorce attorney how they should be addressed.

In some states, a divorce automatically prevents an ex-spouse from being the beneficiary of a life insurance policy or receiving the financial accounts of an ex-spouse. In others states, however, the divorce decree must specifically disclaim all future rights. If it doesn’t, the law treats written beneficiary directives that are in effect at death as the deceased’s final wishes for where assets should go—even if it’s to the ex-spouse.

Case No. 2: A widow is sold unsuitable annuities and life insurance. Robert, a very successful businessman, was married to Rachel, a stay-at-home mom. They had three children under age 10. Sadly, Robert died in an auto accident.

Robert left Rachel substantial assets: a home worth more than $1.5 million, life insurance proceeds of $5 million, and stocks worth more than $2 million. Rachel was devastated and sought the help of a friend, Charles, an insurance agent.

Charles quickly got to work to protect Rachel and her children’s future, or so she thought. Within eight months, substantially all of the stocks had been sold and the proceeds placed in 10 different variable index annuities, some with surrender charges lasting as long as 10 years. Charles also sold Rachel whole-life insurance with a total death benefit of over $8 million—and premiums of almost $135,000 annually.

To pay the premiums, Charles sold Rachel a couple of single premium immediate annuities. The premiums on these totaled $1.5 million, and they generated an annual income of $175,000.

After a few years, Rachel had difficulty paying her bills because the initial premiums for the annuities and annual life insurance Charles sold her consumed most of her liquid assets. Charles, on the other hand, profited handsomely from this “financial plan.” He received more than $550,000 in commissions on the annuity sales alone. He earned another $175,000 in commissions on the whole-life insurance sales. He also charged a 3% annual fee on the total value of the annuities and insurance policies that he “managed” for Rachel. In the first three years after Robert’s death, Charles pocketed almost $1.5 million in commissions and fees.

Fortunately, Rachel consulted a registered investment advisor who put her finances on a less costly and stable path by slowly unwinding her annuity purchases. Sadly, as part of the new plan, Rachel had to sell the home in which the children had grown up.

Rachel sued Charles, who settled before trial for a substantial amount. As is often the case, Charles had spent most of his commissions and fees, and so will be paying Rachel back for decades. Even so, Rachel will never be as well off as she could have been but for Charles’s misconduct.

Lesson learned: People who come into a substantial sum are often the target of unscrupulous brokers, financial advisors, and insurance agents. They’re often sold insurance products with large initial premiums or risky investments requiring a big initial payment.

It's wise for those with newfound wealth to take their time and evaluate a variety of options. They should also make sure that any advisor has the skill and knowledge needed to give competent advice. If you consult with an insurance agent about investing, you’re almost certain to be sold insurance products—whether they’re suitable or not.

After litigating these cases for more than 30 years, my preference is to seek advice from a registered investment advisor. By law, an RIA is required to act as a fiduciary, providing advice that’s solely in a client’s best interests, and not influenced by the size of the fees or commissions the advisor might earn.

Case No. 3: A brother and sister fall out over the family business. Hobart started a small manufacturing business in the 1940s. By 2015, it had grown into a multi-million-dollar company. Henry and Harriet were Hobart’s only children, and each had grown up working in the business. Henry was groomed to be the president, while Harriett’s role was mostly part-time, doing various administrative and bookkeeping tasks while she also raised two children.

When Hobart died, he left the business in equal 50-50 shares to Henry and Harriet. One day, when Harriet came to work, her keys to the office didn’t work. There was a sign on the door that she had been terminated and would be charged with trespassing if she didn’t leave the property.

Henry not only terminated Harriet’s salary, but also refused to distribute to Harriet her 50% share of company profits. He claimed that all profits needed to be retained for upcoming company expenses.

Harriet sued Henry, asking the court to appoint a receiver to take over the company, sell it, and distribute the net proceeds equally to her and Henry. This nuclear option was extremely distasteful to Harriet, as she did not want to harm the business her father had spent years building.

She had no choice, however, because Henry had wrongly kicked her out of the business and was not distributing her share of the profits. Before trial, Henry and Harriet reached a settlement under which Henry bought Harriet’s interest in the company and he became its sole owner.

Lesson learned: When a business is left in equal shares to a founder’s children, resentment can arise over control, especially when they have different levels of responsibility. As equal owners, though, each sibling is entitled to an equal share of the profits, just as those who own Coca-Cola stock are entitled to a dividend, even though they don’t work for Coca-Cola.

Henry and Harriet’s dispute was further complicated because there were no corporate governance documents. Written by-laws, shareholders’ agreements, and operating agreements can help resolve disputes between owners. For example, a shareholders’ agreement could have provided the procedure and formula to follow when shareholders need or desire to exit the business.

Family business owners can ask an experienced corporate attorney to prepare documents to avoid the type of costly litigation that eventually separated Henry and Harriet. Well-drafted corporate documents, for example, might have provided for a third-party tie-breaker vote if there was a 50-50 deadlock between Harriet and Henry that could threaten the company’s continuing existence if it was left unresolved.

Case No. 4: Do-it-yourself legal documents can fail. Mary and Moses were each divorced, and each had children from their prior marriage. Before they married, they wisely thought a prenuptial agreement was in order. Unwisely, they found one on the internet, printed it out, filled in a few blanks and signed it. They were married a few weeks later.

About a year later, Moses died unexpectedly. At his death, his sons from his prior marriage were listed as the beneficiaries of his substantial 401(k) account, as well as several other financial assets worth more than $2 million. The prenup stated that Moses and Mary would each name the other as beneficiaries of all such accounts, so Mary believed that she was entitled to that money.

The prenup was unenforceable, however, because it didn’t have the required number of witness signatures according to their state’s law. Because the prenup was unenforceable, Mary could not claim that Moses’s estate was required to pay her, from other assets, the amount she would have received if Moses had named her beneficiary. All the accounts that Mary thought were to be hers after Moses’ passing went to his sons, with whom she already had a tense relationship.

Mary and the stepsons resolved their dispute in a confidential settlement, under which Mary received some of the money that would have come to her under a properly drafted and executed prenup.

Lesson learned: Hiring an attorney can be expensive. But many times, the cost of untangling the mess that lay people create by playing lawyer is many times more costly. In this case, an unenforceable prenup drastically changed Mary’s expectation of the money she would have as Moses’s widow.

A client gave me a coffee mug that says, “Don’t Confuse Your Google Search With My Law Degree.” Important financial and business documents should be drawn up by a competent attorney.

For example, wills that don’t meet legal formalities might mean that the folks involved are treated as if they died without a will, and their assets will be distributed as directed by state law, which may not be as they had desired. A do-it-yourself business document, such as a shareholders’ agreement, a buy-sell agreement, a partnership agreement or an employment contract, might be ambiguous or omit common terms and conditions that can lead to a result very different than what the parties intended.

Poorly drafted documents like these can be so ambiguous that expensive litigation is necessary to sort out what was intended. Or they may have defects that prevent their enforcement. Attorneys often say “pay me now or pay me much more later.”

Robert C. Port is a partner with the Atlanta law firm of   Gaslowitz Frankel LLC . He is fascinated with understanding how people deal with and manage money, especially the emerging field of behavioral finance. When not in a courtroom or before an arbitration panel, he prefers to be cycling, skiing, hiking, or swimming. Check out Robert’s previous articles .

This article is for informational purposes only, and should not be relied upon as—and does not constitute—legal advice. You should not act upon any information in this article without first seeking legal counsel from someone licensed to deliver advice in the relevant jurisdiction, and who understands your particular facts and circumstances.

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Staying Alive

WHEN I TOLD MY employer I was retiring, I received phone calls from coworkers I hadn’t heard from in years. One of them was Peter. We were hired about the same time.

Peter congratulated me, and said he’d be retiring too—if he’d joined the company’s pension plan. For some reason, like a few of my other coworkers, he never took advantage of the benefit, which required employees to make regular payroll contributions.

Peter did retire about five years later. Shortly afterwards, he bought a house in a retirement community. He was fixing it up and hired painters to give it a fresh coat of paint. When the painters arrived, no one answered the door. They went around to the back of the house to see if someone was at home.

They looked in the window and saw Peter slumped over the kitchen table. He died from a heart attack. He never even had a chance to unpack the moving boxes.

Bernie was another one of my coworkers. He was hired shortly after graduating from high school. We were both big college football fans. We talked about attending football games together when we retired.

After 50 years of service, he retired at age 70. Bernie made a wise financial decision when he was hired. He enrolled in the company’s pension plan. Two weeks after he retired, he died of a heart attack.

Warren was a close friend from college. We both retired about the same time. He was financially secure. Between his income annuities and Social Security, he had a comfortable, predictable income. He also had a seven-figure retirement savings account. His house was paid off. He owned another home in the same area free and clear. He also owned a condo in San Diego County, which he visited frequently.

One evening, while sitting at home, he suddenly experienced excruciating pain. His wife called 911. They told her to give him CPR. But she couldn’t get him out of his chair and onto the floor, where she could administer it. By the time the paramedics arrived, it was too late. He died of a heart attack.

Bob was my neighbor in Long Beach, California, where I used to live. He retired about five years ago. He also has a company pension. He and his wife were enjoying their retirement—until one night, when Bob woke up, sweating profusely. He felt terrible. He got out of bed and found his way to the living room, where he plopped himself in his chair.

The next morning, he had no energy and his voice was weak. His wife took him to the emergency room. He was told he had a heart attack.

The No. 1 threat to your retirement might not have anything to do with what the stock and bond markets do today or tomorrow. It also might not be your poor choice of investments or spending habits. Instead, it could be the No. 1 killer in the U.S.: heart disease.

According to the Centers for Disease Control (CDC), one American dies every 34 seconds from cardiovascular disease. The American Heart Association’s 2021 report notes that 77.5% of men and 75.4% of women ages 60 to 79 have some type of cardiovascular disease, while 90% of those aged 80 and older have it.

Fortunately, we can reduce the risk of heart disease by having a healthy lifestyle. Here are six steps you can take to live a long and active life:

Understand your risk. If you’re between age 40 and 75 and haven't had a heart attack or stroke, you can use the American Heart Association's risk calculator to estimate the possibility of having a cardiovascular episode in the next 10 years.
Shed excess pounds. Being overweight can increase your risk of heart disease by putting too much stress on the heart and blood vessels.
Eat and drink healthily. Eat lots of fruit and vegetables and fewer processed foods. Stay away from foods high in saturated fats, trans fat, salt and sugar. Don’t overdo your alcohol consumption. According to CDC guidelines, moderate drinking is no more than two drinks per day for men and one drink for women. Too much alcohol can cause high blood pressure.
Get moving. Exercise can help you maintain a healthy weight and lower your blood pressure, blood cholesterol and blood sugar levels. The Surgeon General recommends adults get 2½ hours per week of moderate-intensity activity, such as brisk walking and bicycling.
Take prescribed medicine as directed. Statins are a group of medications that can lower the low-density lipoprotein (bad) cholesterol in your blood and help reduce the risk of heart disease and stroke. In an AARP article, James Min, former director of the Dalio Institute of Cardiovascular Imaging at New York-Presbyterian Hospital, commented, “Half the people prescribed statins will not be taking them after one year. And by five years, 90% are not taking their medications.” Don’t stop taking your medicine without talking to your doctor, nurse or pharmacist.
Don’t smoke. Smoking cigarettes can significantly increase your risk of heart disease. The chemicals you inhale from smoking can cause atherosclerosis, a condition where a sticky substance called plaque builds up inside your arteries.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor's degree in history and an MBA. A self-described "humble investor," he likes reading historical novels and about personal finance. Check out his earlier articles and follow him on Twitter @DMFrie.

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College Conundrum

MY DAUGHTER IS MORE than halfway through her junior year of high school. College and career choices are hot topics in our household. My wife and I have a dilemma: Should we encourage our daughter to pursue a college degree that matches her passions—or nudge her toward one that has a better chance of paying the bills?

My daughter is no slouch in math and science, but her true love turns in another direction. She devours good books, and writes fantasy and poetry as a hobby. She’s a Latin scholar and thinks linguistics textbooks are a fun read. Words are her element. A life immersed in literature and language calls out to her.

Even so, my daughter is no fool. She understands the value of money, and plans to exit college on a path to a decent paycheck. She’s prepared to relegate her ardor for literature to hobby status. We wonder if she could have both, a job that’s satisfying to the soul as well as the bank account. Our thoughts turn toward an academic career as a possible option for her, but what are the prospects?

Maybe not so bright. Every business needs customers, and for schools that means students. Enrollment at colleges and universities is down, according to the National Student Clearinghouse Research Center. After losing students in 2020 and 2021, during the COVID-19 pandemic, schools hoped for a return to pre-pandemic enrollment levels in 2022. Instead, combined undergraduate and graduate enrollment for fall 2022 continued to run 5.8% below 2019’s level. This loss of students is in step with a trend that started in 2012, when the number of college students began to diminish.

To my mind, a dwindling student population equals a decreasing need for new instructors. According to the Bureau of Labor Statistics, the number of English language and literature teachers working at U.S. colleges and universities is projected to increase by 4,600 between 2021 and 2031. For a point of reference, I checked the BLS stats for my own profession of physical therapy. The forecasted number of new physical therapy jobs between 2021 and 2031 is 40,400, nearly nine times that of post-secondary English teacher positions.

What do those numbers mean when it comes to landing that first job after college? I know that a newly minted physical therapist has excellent prospects of finding a job that pays a decent wage. One of my roles at work is fostering relationships with students so we increase our chances of hiring them after graduation. A frequent conversation in hospitals and other businesses within the rehab industry concerns the abundance of available job openings and the dearth of therapists to fill them.

By contrast, talk inside the English department about the shape of the academic job market isn’t so rosy. According to an article in The Chronicle of Higher Education, the outlook for employment as an English professor is dim and growing dimmer. Authored by an English professor at Yale University, the article highlights information from the Modern Language Association (MLA) about the shrinking job market for English teachers at colleges and universities, including data tracking teaching jobs advertised through the MLA. The number of positions listed fell 55% during the decade ending 2017-18, and continued to drop through 2020, according to the MLA. The organization calls the state of affairs “a crisis.”

Where does that leave our daughter’s career choice? At the root of our concern is our hope for our daughter’s future happiness. Yes, she could have fun now pursuing an English degree, but the odds are low that it would lead to employment within the field itself. Instead, she could fall short of her goal and wind up with a job that feels like a consolation prize. “Search engine optimization specialist” may be a great occupation. But it isn’t as likely to stir her blood as introducing the next generation to the heroic deeds of Beowulf or the rousing words of Henry V.

On the other hand, pushing passions aside and setting sights on one of the hot jobs of the future may lead to a case of buyer’s remorse down the road. To find examples, my wife and I need look no farther than the mirror. After starting our adult lives in jobs we didn’t greatly enjoy, we both returned to college in our 30s to train for a career that both sparked our interest and provided a decent income.

I know ours is not the first family to consider similar choices and, let’s face it, we’re also concerned about our own happiness. As the financiers of our dear daughter’s education, we’d like to avoid the regret of buying a degree that sits idle on the shelf.

Ed Marsh is a physical therapist who lives and works in a small community near Atlanta. He likes to spend time with his church, with his family and in his garden thinking about retirement. His favorite question to ask a young person is, "Are you saving for retirement?" Check out Ed's earlier articles.

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Priceless to Me

AT AGE 55, I'M PERHAPS a bit young to spend time reflecting on my life. My maternal grandmother died at 101, so I could have many more decades to go. Nevertheless, I find myself more nostalgic now than I was just a few years ago.

I often think back to my childhood and how it shaped who I am today. In 1976, when I was in fourth grade, my parents purchased a two-and-a-half-acre property in a small town outside of Eugene, Oregon. Within a couple of years, our hobby farm was filled with a variety of animals. Twelve Siberian husky dogs, a handful of barn cats and a herd of dairy goats resided in the various outbuildings my father constructed. Rabbits, chickens, sheep and a couple of pigs eventually moved in as well. My love of animals grew out of my daily interactions with our menagerie.

Helping to care for all those creatures fell squarely on my shoulders. Every day, there were goats to milk and stalls to clean. Doing daily chores was a given. In return for my efforts, no monetary compensation was provided. I suspect my work ethic was shaped, in part, by the hundreds of hours I spent performing manual labor on our farm.

In sixth grade, I became a member of the local 4-H club. During summer 1978, I attended my first county fair. Staring at the trophy table—filled with an assortment of gaudy plastic figurines mounted atop faux marble bases—my competitive nature was ignited.

I walked away from that first fair with just a handful of ribbons. But I vowed to return the following year and bring home some hardware. For the next 12 months, I dedicated myself to learning as much as I could about the various competitions. My work paid off. My bedroom soon overflowed with trophies. These days, I compete at dog shows instead of county fairs. But my competitive drive is every bit as strong at age 55 as it was at 12.

I learned other skills as a child that stayed with me as an adult. My meticulous, handwritten 4-H record book won me accolades for my “attention to detail.” The notebook I use today, to track my personal finances, is equally thorough.

There were also deeper, more meaningful aspects of my adult life forged during those childhood years. A recurring theme in many HumbleDollar essays is the emphasis on spending money on experiences rather than on possessions. When I reflect on my life, the experiences and possessions I cherish the most are intertwined.

Despite moving—and downsizing—several times over the past 40 years, I still have a collection of mementoes from my childhood. The box has been pared down multiple times. These days, it only contains a few items, but they conjure up fond memories. I have some faded, tattered blue ribbons I won at a state fair when I was a teenager. I have a black-and-white photo of my parents mushing our team of sled dogs down a snowy trail. I’ve also kept a binder that’s filled with stories and poems I wrote when I was 10 years old.

As an adult, I’ve never owned many items of value. I don’t have a nightstand overflowing with jewelry. I don’t have a display case filled with crystal or china. An estate sale liquidating everything I own would likely bring in just a few hundred dollars.

My treasured possessions are still those items documenting experiences that fill me with joy. I have thick scrapbooks chronicling the life of each of my dogs. I’ve got a ticket stub from a rodeo I attended with a close friend. The numerous greeting cards my husband has given me—filled with his handwritten prose—are displayed on our living room wall.

None of the items that mean the most to me has any monetary worth. Instead, they provide me with something far more valuable. They allow me to relive experiences that delivered the most happiness in my life.

Kristine Hayes Nibler recently retired, and she and her husband now live in Arizona. She enjoys spending her time reading, writing and training their four dogs. Check out Kristine's earlier articles.

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The Envelope Returns

HAVE YOU HEARD of the latest budgeting technique? It’s called cash stuffing. No, it’s not shoving money into your mattress. It’s the new name for an old budgeting method, where you divide your weekly pay into envelopes earmarked for various spending categories, such as food, gas, rent, vacations, clothing and so on.




For each expense, you spend only from that envelope and, when it’s empty, that’s it. No cheating. No dipping into other envelopes.




I’m sure you get the idea. After all, this isn’t a new phenomenon. I remember my parents sitting around the kitchen table, apportioning the family salary into various envelopes that they’d carefully budgeted money for. My father had one marked “house money”—a catch-all for food and miscellaneous small expenditures related to running our household.




This time around, cash stuffing has sprouted into a popular industry. You can buy all manner of envelope sets, such as envelopes of different colors for different categories. There’s a budget planner binder and even a genuine leather all-in-one deluxe version for $89.




The more you spend on these organizers, the more sophisticated and supposedly inclusive the binder, with all manner of compartments and zippered pouches. You can get them personalized, glamorized and customized.




We’re now offered cash-stuffing budget sheet planners, stickers and even tear-resistant envelopes—on and on, ad infinitum. You can purchase a plethora of these must-haves on the Amazon and Walmart websites.




The market for products relating to cash stuffing seems to still be in its infancy. Soon, an even more amazing variety of items will no doubt be available. You get it, don’t you? You have to spend money to budget money. Oh—and some sellers have renamed the cash envelopes “currency envelopes.” Fancy schmancy.




Before long, we’ll need a new budget envelope to pay for all our cash-stuffing supplies. Whatever happened to "keep it simple"?

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