Jonathan Clements's Blog, page 197

Now and Then

IT WAS YEAR-END 2007. I was about to turn 45. I was in the middle of an unhappy relationship that I didn���t have the courage to end and that would drag on for three-and-a-half more years. I was coming up on my 1,000th Wall Street Journal column, but it had become a grind. I wondered how much longer I could keep it up before my articles descended into repetitive blather. My amateur running career���a huge part of my identity for the prior decade and a belated source of athletic pride for a once-wimpy English schoolboy���was spluttering, my Achilles tendon aggravated by the bone spur growing out of the back of my right heel. My two children were my only great joy. Hannah was then in college, Henry in high school.

As of Dec. 31, 2007, I owned a house that was mortgage-free and a portfolio worth $976,000.

I mention this not to argue that money often fails to buy happiness, though I firmly believe that���s true. And I certainly don���t intend to boast. As a child, I might have imagined that self-worth and net worth were somehow correlated, but I sure don���t think that today.

Rather, I mention year-end 2007 to draw a line across my life���s calendar. The years that followed brought events���good and bad���that upset the somewhat predictable rhythm of my early financial life. I���ll talk about those events later in this essay. But it was the humdrum early years that put me on the path to financial independence.

Growing up fast. At university, I was the kid who swore he���d never get married and never have children. Two years after my 1985 graduation from Cambridge, I was married. A year after that, I became a father at age 25.

I can���t claim to be naturally thrifty. I spent my college years and my first year in the workforce accumulating credit card debt, while also occasionally overdrawing my checking account. The card debt doesn���t seem especially large today���it reached ��1,000, the maximum allowed by my card. Still, at the time, it felt like a huge burden.

In August 1986, after working in London for a year, I moved to the New York area and settled down with my PhD-student fianc��e. She had a modest stipend, so I was cast as the main breadwinner, initially earning a pitiful $20,000 a year at Forbes magazine. I had to grow up financially, and I needed to do it fast. There was no other choice.

We called these the ���lean years,��� and they were. Takeout pizza on Friday night was a questionable extravagance. A car repair was a crisis. The apartments we occupied in Brooklyn left me with a dread of cockroaches and mice that I still can���t shake. The occasional restaurant meal had me toting up the bill as the food was ordered���not exactly conducive to digestion.

Slowly, however, things improved. My salary rose, and my wife got an academic job. In 1992, we moved from Brooklyn to the house we bought in the New Jersey suburbs. The house cost $165,000, had three bedrooms and a single bathroom, and felt barely affordable. I lived there for the next two decades.

Financially, the only big hit during those two decades was our 1998 separation and subsequent divorce. But in truth, it wasn���t that much of a hit because, at that juncture, we simply didn���t have many assets to divide. I kept the house, and my soon-to-be ex-wife bought a place around the corner, so the kids could easily walk from one house to the other. A financial silver lining that I only later came to appreciate: Post-divorce, I got to call the shots on every dollar I earned.

Journalism wasn���t exactly a high-paying profession then, and it���s even worse now. Still, I had a knack for taking the somewhat tedious topic of personal finance and making it both interesting and understandable. By 1994, at the absurdly young age of 31, I was the Journal���s personal-finance columnist, at the time one of just three columnists in the paper���s news department. Within a few years, I was earning more than $100,000, the maximum allowed for a Journal staff writer.

I hustled to supplement my base salary. I signed up to write a second column each week for The Wall Street Journal Sunday, for which I was paid extra. I wrote three books over the course of a decade, each of which garnered me a low six-figure advance. I never took a book leave to write any of them, so the money earned was financial gravy���but it came at a price. I���d devote weekends and early weekday mornings to book writing, a schedule that left me ragged and desperate for a few days away from the computer screen.

I shoveled the extra money I earned into stock index funds while also adding large sums to each monthly mortgage payment. Among colleagues and readers, I became known���or perhaps notorious���for favoring stock-heavy portfolios built using broad market index funds. I���ve been wrong many times over the years, but that was one thing I got right, and I take pride in having been an early and outspoken advocate of indexing, even if my advocacy grew a tad repetitive.

While I viewed my stock index funds as my growth money, I saw my extra mortgage payments as a bond substitute. Why buy actual bonds at 4% or 5% when I could effectively earn more than 7%���my mortgage rate���by paying off my home loan? In late 1992, I remember spotting the line for extra-principal on my first mortgage-payment coupon and tentatively adding $10. The extra payments grew far larger over the years, and, by 2005, I was mortgage-free. It was the best bond investment I ever made.

While I feel I did an okay job of investing, the key to success was ensuring that I had plenty to invest���a simple enough feat: Even as my income ballooned, I kept my living costs low. A big reason was my modest home. Added to that was a general reluctance to spend on almost anything. I didn���t eat out much. I drove the same used car for years. I took the kids on fun vacations, but always kept a close eye on the cost.

This was a great strategy for amassing wealth. I���m not sure it���s a great strategy for enjoying life. I was working long hours. I wasn���t counting pennies���I���ve never been one to budget���but I kept myself on a short financial leash. Despite making some substantial home improvements, I never much liked the house I lived in for those 20 years. An occasional indulgence, coupled with less self-inflicted work stress, would have taken some of the grind out of my march toward seven figures.

Second childhood. While the two decades through 2007 were a long slog filled with predictable days, the years since my 45th birthday have seen all kinds of upheaval. I left The Wall Street Journal in 2008, spent six years at Citigroup, briefly returned to the Journal as a freelance columnist, and then tried my hand at a slew of different jobs. I taught personal finance at a small college for two semesters. I wrote a column for Financial Planning magazine. I took on two major writing projects for a Wall Street firm. I gave some paid speeches. I worked with three others to develop a financial app that never saw the light of day. Eventually, I focused my efforts on HumbleDollar, the website I launched at year-end 2016, while also doing work for Creative Planning, a sizable registered investment advisor based in Overland Park, Kansas.

Meanwhile, I largely gave up running and instead turned to bicycling, racking up six memorable accidents, three of which landed me in the emergency room. Over the past 15 years, I���ve written seven books, moved house four times, got married again and���alas���divorced again. Midlife crisis? No doubt that played a role. I didn���t set out to try so much that was new. But after spending the first two decades of my adult life hewing to the straight-and-narrow path, and after saving my way to financial freedom, I was ready to explore.

In many ways, the past 15 years have seen the sort of experimentation and turmoil you���d expect from someone in his 20s���a life phase I never had because I was thrust so quickly into the role of family breadwinner. Indeed, I���ve taken to referring to the past decade or so as my second childhood. But while those in their 20s might do all this on a shoestring, I���ve been able to do it, in part, because money wasn���t an issue.

How have I fared financially through this period? It���s been a mixed bag.

When I joined Citigroup in 2008 and became director of financial education for the bank���s U.S. wealth management group, my financial house was already well in order. But with the move to Citi, my income doubled even as I continued to live like a lowly newspaper reporter. Working for a Wall Street firm for six years was an education: I got to see the advice business from the inside, I learned about financial topics I���d rarely written about, and I was forced to overcome my fear of public speaking. Indeed, I found myself delivering 30-plus speeches a year to clients. But toward the end of my Citi career, I realized that���for the only time in my life���I was working solely for a paycheck. My dollar income might have been impressive, but the psychic income wasn���t. I hung on long enough to collect a final year-end bonus, and then, in early 2014, I quit.

Meanwhile, I���ve sold three homes over the past decade. One was a rip-roaring success���the apartment I bought in New York City in 2011 during the depth of the housing crisis and sold three years later. But one was an unmitigated disaster that, when I factor everything in, probably left me more than $100,000 poorer. What went wrong? I made one crucial error, buying an apartment that had much higher ongoing fees than nearby properties, and that made it difficult to sell. But I was also blindsided���by a divorce, by a pandemic that nixed interest in owning apartments, by two buyers who made bids but then dropped out, and by the need to get a certificate of occupancy for work that had been done on the apartment more than 50 years earlier. The long-running drama���selling the place took 31 months���stole my peace of mind and cost me countless nights��� sleep. Almost all of us suffer one or two big financial hits during our life. I count myself lucky: This particular storm was bruising, but it didn���t threaten my financial future.

What about my portfolio? Like everybody else who owned stocks, my investments were crushed by the 2007-09 and 2020 stock market drubbings. But despite relentlessly arguing that the financial markets are efficient and can���t be beaten, I saw both market declines for what they were���moments of overwhelming investor fear that caused share prices to become unhinged from intrinsic value���and I bought like crazy. I went into late 2008 with some 70% of my portfolio in stocks. By the time the market bottomed in March, I was at 95%. Obviously, this turned out well, but I mention it sheepishly, out of concern I���ll be branded a market-timer. Fair criticism? I���d argue market-timing involves acting on a market forecast, whereas I was simply responding to market movements���and taking advantage of what I saw as temporary investor insanity.

Through the 2010s, my portfolio was entirely in index funds and mostly in stocks. But I had hefty holdings of index funds focused on value stocks, small-company shares, developed foreign markets and emerging markets, all of which badly lagged during the roaring 2009-20 U.S. bull market. I don���t harbor any regrets���by its nature, broad diversification means you���ll always own some of the market���s stinkers���though I also recognize that I could have fared far better if I���d owned a lopsided portfolio that focused solely on the big blue-chip U.S. stocks in the S&P 500. Still, I���m not about to change strategy. I have no clue which parts of the global financial market will shine in the decade ahead, so I���ll continue to own a little of everything.

Amid the financial triumphs and disasters of the past 15 years, perhaps the biggest change is this: Even as I continue to spend my days writing and thinking about money, I spend very little time thinking about my own finances. In a world where so many folks worry about how to cover day-to-day expenses, I���ve come to see not thinking about money as perhaps the greatest luxury that money can buy.

I have also become a little more carefree in my spending. I enjoy going out to dinner once or twice a week���and, unlike in my 20s, I never worry about the size of the bill. I���m quicker to book trips, both weekends away and longer vacations. Every year or so, I buy a piece of art, usually an oil painting. I enjoy helping my two kids financially and funding my grandson���s 529, and I���ve belatedly become more focused on charitable giving. There is, I���ve found, greater happiness in spending on others than spending on myself.

Not all is right in my financial world. My big regret: I continue to work far too hard. As a teenager, I would happily take to the couch and surrender an entire day to a novel. Today, there always seems to be something that needs to get done, and that something is usually work. Like a force in motion that stays in motion, I���ve found that decades of working hard have created a momentum of their own, one I struggle to resist. In part, I chalk this up to the delusion that what I do is important, which perhaps it is, but not nearly as important as I imagine. I love what I do each day���the sense that, with my writing and editing, I���m helping folks to lead better financial lives. But in the end, managing time is more important than managing money, because time is the ultimate limited resource. I should lead a more balanced life. I know that intellectually. But I���m still trying to convince myself.

This is the 30th and final installment in the "My Money Journey" series. All 30 essays will appear next April in a book published by Harriman House.

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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Bonding for Life

WHEN MY WIFE AND I were young, it was common to receive savings bonds for major events, such as birthdays and religious celebrations. We carried on the tradition with our two sons and we���re planning to do the same for our grandchildren.

With our sons, we bought savings bonds to mark significant childhood milestones. We held on to those paper bonds for many years, and gave them to our sons when they graduated college. They appreciated the significant sum and used the money to help fund the transition from college to the working world.

But one bond they each received was unexpected���and extremely meaningful.

The story begins in summer 2004. My mother, who lived with us, was diagnosed with B-cell lymphoma. At first, brain surgery and aggressive chemotherapy seemed to cure her. But weeks after her last chemo treatment, the cancer came back and ravaged her brain. By December, it was clear there were no treatment options, and she chose to go on hospice care at our home.

My mom was especially sad about losing the opportunity to see her nine grandchildren grow up. They spanned a wide range of ages, and she had a special relationship with each of them. At the time, our oldest son was a senior in college, and she lamented that she wouldn���t see him graduate.

That reminded my wife and me of something my wife���s grandmother had done. She bought savings bonds for her great-grandchildren to commemorate religious milestones that would come later in their life. My mother-in-law held on to the bonds that her mother had bought, and then gave them with a card to each great-grandchild as the milestones occurred, which was often long after their great-grandmother had died. It was a nice way to connect them with a beloved family member.

We asked my mom if she���d like to do something similar, and possibly write a card to each of her nine grandchildren. She thought that was a great idea, so I went to the bank and purchased nine $100 savings bonds. That was the easy part.

Meanwhile, my wife bought a variety of cards she thought each grandchild would like. Then, with the help of several boxes of tissues, she sat with my mom so she could add a message to each card. Writing was well beyond my mom at that point, so she dictated a personal message for each grandchild, while my wife wrote the cards. It was an incredibly emotional but very special time that they shared. My mother passed away a few weeks later.

At our son���s graduation in May 2005, after the ceremony and the celebratory lunch, we pulled him aside and gave him the card. He was surprised and moved to receive the card and the savings bond. We asked him to keep it to himself, so that his brother and cousins could later experience the surprise themselves.

Two years later, we were able to repeat the event with our youngest son. He also was touched. Over the years, this was repeated with my mom���s remaining grandchildren at events such as college and high school graduations.

At the end, my mom had few financial resources. I think she was glad she could pass along a modest but tangible gift to her beloved grandchildren���along with a timeless message of her love.

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Divide and Conquer

IF WE GO TO the movies and buy a mega-tub of popcorn, we���ll eat a lot, probably too much. If, however, that same amount of popcorn is packaged into four bags, we won���t eat nearly so much.

Why? With the four bags, we keep arriving at a decision point���that moment when we have to ponder whether it���s worth opening a new bag. This is the insight of behavioral economist Dilip Soman of the University of Toronto���s Rotman School of Management, who offers the popcorn example to illustrate a simple yet profound insight into our decision-making.

The separation of bigger decisions into smaller choices is called partitioning. It gets us away from automatic or abstract thoughts, such as ���I like popcorn,��� to a more specific decision: ���Do I like popcorn enough right now to open a new bag?���

At that moment, we make a cost-benefit analysis of our choice. We might weigh the enjoyment of more popcorn against the effect it may have on our waistline. Somewhere before the fourth bag is opened, people tend to realize that they���ve already eaten enough.

Partitioning has obvious benefits for money management, too, and saving in particular. If we earmark funds for ���house purchase,��� ���kids��� college��� and ���retirement,��� it lets us visualize our goals. That���s better than thinking of our wealth as one collective pot available for any need.

Naming our goals also makes them more tangible, which can encourage us to direct more money toward them. With this kind of intention, we might even achieve our goals faster.

In addition, having a named savings goal gives us a yardstick to measure our progress. For example, we might compare the growth rate of our college fund to the rise in tuition costs to see how we���re doing.

On the spending side, inserting partitions is helpful, too, because it adds an extra step called a transaction cost. Transaction costs make us pause before we spend money.

For example, when I turned old enough to gamble in casinos, my father advised me to think���and then rethink���the maximum amount I was willing to lose. I then set that amount apart from any other money I had when I walked into the casino. Once my stake was gone, whether in three hours or three minutes, I walked away.

That���s good advice and it works for any form of gambling, including investments. Got an itch for risk? Think and rethink, and then put up a wall around your possible losses. You can designate that any gains be reinvested in the cause. Once your stake is gone, however, ignore that voice that says, ���Maybe I���ll just put in a little more to make it work.���

To be sure, the siren���s call of the sunk cost fallacy is hard to resist. Still, a partition may be just enough of a check to keep you from going overboard in any one direction. Perhaps, like the Greek hero Ulysses, you might even plug your ears with wax to resist temptation.

We all have projects and adventures we want to spend money on, whether remodeling the house or having a grand family vacation. It���s wise to partition money for these goals as well. If we set a dollar limit at the start, it helps us resist the temptation to spend more than we can truly afford.

For other types of spending, we can invent our own transaction costs. Put the credit cards in a special place where it���s an effort to get at them, though perhaps freezing them in ice may be a bit much.

Another type of transaction cost: Impose a 24-hour pause before completing any big-ticket purchase. Or, similar to the casino example, take a limited amount of money when shopping, either at the mall or online. Then hold that line.

The objective is to get ourselves to think before we spend. It���s like the Second World War poster that discouraged the waste of gas and oil. ���Is your trip necessary?���

Of course, with behaviors we want to encourage, we should look to remove partitions. Setting up automatic deposits to our 401(k) account removes transaction costs. Making healthy snacks like carrots easily accessible helps to make them our first choice.

Partitioning is so commonsensical that many are surprised it has to be offered as advice, let alone studied by behavioral economists. But it���s these very simple steps that are often the most overlooked, even if they offer the easiest of remedies.

We know we should consciously think through our spending decisions. Yet it���s almost as if the system is set up to encourage us to part with our money unthinkingly. That, however, is a topic for another day.

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 elementary, middle and high school students about behavioral economics and media literacy. He's also authored several educational children's books. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. They have a book that examines the impact of social media influencers on youth consumerism and identity development coming out in 2023.��Check out Jim's earlier��articles.

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Steady as He Goes

WHEN I GRADUATED high school in 1961, my parents offered this advice: ���Find a good company to work for and stay there.��� At the time, my choices were the phone company, a major insurance company and a utility. I applied to all three and would have taken a job with any of them, but ended up at the utility. I worked there until I retired in January 2010.

Today, my parents��� advice seems almost quaint, especially with the average job tenure at less than five years. Still, while I may have missed opportunities that���ll be forever unknown, following that 1930s-style advice served me well, giving my wife and me a financially secure, no-forced-frugality retirement.

I enjoyed a steady paycheck for half a century���and I���m still focused on collecting a steady income. Today, that income comes from several sources. There���s my pension and our combined Social Security. Together, those income streams exceed my base pay on the day I retired. That���s the income we live on.

When my former employer cancelled Medicare supplemental coverage for retirees in 2021, it provided us with a health reimbursement account to buy replacement coverage. While it won���t be true later in retirement, for now that money covers our Medigap and Medicare Part D premiums.

My annual required minimum distributions from my IRA provide additional income. I wish it didn���t���because I���d rather the money stayed invested. I generally reinvest the net proceeds in a taxable account, but this year some of it was spent on remodeling projects. Meanwhile, our investments in a taxable brokerage account provide capital gains and interest payments. Those are currently reinvested, but they���re available if we need extra income.

Three municipal bond mutual funds pay tax-free interest every month, which we again reinvest. We opened those funds when I took Social Security at my full retirement age of 66. I was still working, so we invested both my wife���s and my Social Security benefit in the three muni funds.

Finally, we own two utility stocks���one is my former employer���s. Those pay regular dividends, also at present reinvested, but that may change if we need to accumulate more cash.

It all boils down to income streams. For sure, my pension makes me somewhat atypical. Still, I���d argue it���s important to build a retirement income stream that���s as far removed from the gyrations of the stock market as possible. I claim no expertise when it comes to investing. But my approach keeps me happy, my wife happy, and someday my children and grandchildren will be happy. I hope.

I forgot one item: There���s also income from my blog. Last month, I earned $5.54. The hosting company doesn���t pay me until the amount owed is $100. When I get paid, it goes to my PayPal account, which I then upload to my Starbucks account. Ya gotta cover all the bases.

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The Humble Landlord

MY FATHER WAS BUILT like a linebacker and hollered like a coach. One evening in the late 1950s, I accompanied him as he went door-to-door to collect rents.

A tenant called Schoenfeld���I only recall his surname���paid his rent reliably, but he was always a month late and he didn���t include the late fee. This drove my father nuts. That night, he unloaded on him. When I asked my father why he had to be so hard on Schoenfeld, he had a few choice words for me, too.

���Stevie, you���ll go to one of those pom-pom colleges,��� my father said. ���I graduated from the school of hard knocks. You���re too soft. Don���t be a wimpy landlord.���

Today, I, too, am a landlord, and have been for the past four decades. Along with my wife, I���ve owned 30 or so properties over the years, and we still own 12 today. I never wanted to be a pushover for my tenants, but I also never wanted to pulverize the lives of people who, in some sense, were in my care.

Folks who rent worry about their safety, their comfort and their budget, just like homeowners do. Pride of ownership is fine as far as it goes. But what about pride of partnering? Of course, there���s an inherent conflict of interest and a hierarchical relationship between owners and renters, but I believe there���s also a common thread. Both want a living space that���s functional and presentable.

Partnering doesn���t only help the renter. We once had a scheduling snafu and couldn���t arrive in time to meet a prospective tenant at the property. The vacating person offered to show her around the apartment on his own time. I like to think he was returning the respect he received during his stay with us.

Though never reviewed on Yelp, I know I���m appreciated. In the midst of the COVID scourge, we voluntarily renegotiated leases and, in one instance, gave a single working mother a two-month rent holiday. We set up a delayed payment schedule for a valued renter whose finances were temporarily tied up in a divorce proceeding. Over time, I collected almost all the rents due. A prospective buyer of a fourplex once requested multiple walk-throughs that unduly inconvenienced people. We gave everyone a onetime $25 rent credit.

Compassionate landlords are often derided as na��ve by the real estate cognoscenti, who say our trustworthiness is just a cover for our spinelessness and that we���re frequently duped by deadbeat renters and unscrupulous service people. Unfortunately, I think this is sometimes true, and it behooves landlords to be vigilant.

I made a colossal blunder in 2015, when a fire destroyed our 16-unit Victorian office building, the crown jewel of our mom-and-pop enterprise. To my dismay, I discovered that I���d neglected to get insurance coverage for loss of rents. For five months, I had the usual fixed expenses like mortgage, insurance and property taxes, with zero income to pay them. I can still hear replays of my father���s admonition about my unfitness for business.

Remember those eight wonders of the world? You���re probably also well-versed in the wonders of jacking up rents as fast and as high as local regulations permit. Besides being repugnant, that playbook is financially counterproductive. It���s a sure way to alienate renters and motivate them to suddenly come up with problems that need fixing.

That brings me to some real estate blasphemy: Macho management is a losing financial proposition. I don���t like to raise rents too much because I risk losing good tenants. In my book, if there are no calls, no problems and reliable rent payments, I���ll only ask for a small increase.

Recently, however, I blew it. I raised a responsible renter $100 and she left in a huff. ���So what,��� you say. ���Just increase the rent by $200 on the bloke coming in.���

Talk about na��ve. First, I had to primp the unit, including $200 for carpet cleaning, $175 to caulk the tub and another $200 to fix a leak under the kitchen sink. Next, I had to pay $5,000 to paint half of the two-bedroom duplex.

Sound bad? We aren���t done yet. Throw in a month���s ���rent up��� fee���the payment to a real-estate broker to find us a new tenant. Add in the lost income from a unit that���s vacant for at least a month, while we prep the unit and find a new renter. It might take over two years to recoup these various expenses. I���ll place my bet on longevity any day. Ditto for my property manager, who has held my hand through 38 years and many rocky times.

By my parents��� standards, I was never cut out to be a landlord, and I���m still haunted by my father���s misgivings about me. My life and career were jumpstarted by the diligence and perseverance of my parents, and���strange as it may sound���that���s made me glad I���ve been a responsive, caring landlord. I feel doing so has enriched the lives of my renters, folks who didn���t get as good a number in the birth lottery as I did.

Steve Abramowitz is a psychologist in Sacramento, California. Earlier in his career, Steve was a university professor, including serving as research director for the psychiatry department at the University of California, Davis. He also ran his own investment advisory firm. Steve's previous article was Calling for Yield.

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Independent Minded

I WOKE UP THIS morning at 4:15 a.m. I don���t need an alarm clock. My internal clock makes sure I���m up at that time.

I hopped out of bed and did a quick shave with my electric razor. I put on my running shorts, shoes and T-shirt. I headed down to the kitchen. I ate half a toasted organic sprouted-wheat muffin with a thin layer of peanut butter and a small portion of a banana.

I felt pretty good this morning, so I decided to run rather than walk my three-mile loop. When I returned, I had an egg white omelette with mushrooms on a whole wheat tortilla. I also had nonfat plain yogurt with fruit.

After breakfast, I brushed my teeth with my nondominant hand. Such activities, I believe, are good for my brain. My wife asked me to pick up tuna fish and kidney beans at the store. I looked at the label on the tuna fish to make sure the only other ingredient was water. I also made sure the kidney beans had no sodium.

This afternoon, I did some strength exercises in the garage with a few weights and resistance bands. For dinner, we had fish with vegetables. Afterwards, my wife and I went for a walk.

At 8 p.m., I took my cholesterol pill. Since it���s thought your cholesterol production is highest at night, I felt it was a good time to take it. I read a little and then called it a day.

That���s my daily routine. As I grow older, I become more health conscious. I try to eat a healthy diet and stay active. No, I���m not afraid of dying. I���m also not trying to live a longer life. What I���m trying to do, at age 71, is stay independent. The best way to do that is to maintain my mobility and mental capacity.

I want to continue to live in my house that has 18 steps leading to our bedroom upstairs. I don���t want to live in an assisted living or retirement community. I like where I live. I want to stay here until the end. The only other person I want to live with is my wife. I also don���t want to be a burden to her.

When I was younger, my goal was to be financially independent. Today, I realize that isn���t enough if you want to live life on your own terms in your later years. For that, you also need your health.

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Farewell Paycheck

I ADMIT I'M ENVIOUS of people who feel passionate about their careers. People who have no desire to stop working. People who can���t imagine how they���ll fill their days when they finally retire.

I spent 37 years in the workforce. My first few years, I held multiple part-time jobs to put myself through college. Once I completed my master���s degree, I began working fulltime. For 30 years, work was just a daily chore.

During three decades of employment, I never took an extended period of time-off. I never went on maternity leave. I didn���t take a sabbatical. The two times I made career changes, I stopped working for my old employer on a Friday and started my new position the following Monday.

I have a file folder filled with glowing recommendations, positive annual reviews and multiple nominations for performance awards. I almost always felt the work I did was appreciated. But I never felt passionate about what I was doing.

For 30 years, I worked five days a week. While my body went through the motions Monday through Friday, my mind was usually focused on the weekend. Saturday and Sunday were the days I could spend time doing what I truly enjoyed.

Every hobby I had, whether it was competitive pistol shooting, training dogs or writing, came with its own set of daydreams. I spent countless hours thinking of ways to turn the activities I loved into a career. I���d fill notebooks with business plans and estimates of potential income. I would research the cost of medical insurance policies. I���d admire people who ran their own businesses and wonder if I could achieve similar success.

Inevitably, I���d give up on my dreams. I was never confident enough in my abilities to take the necessary leap of faith. I was too afraid of giving up the security of a fulltime job for the unknown of self-employment.

Finally, in early 2022, I did what I���d imagined doing for years: I gave notice to my employer. My final day of work coincided with my 55th birthday.

The first two weeks of my retirement were hectic. My husband and I sold our home in Oregon. We packed up our four dogs and moved to Arizona.

Those first days in Arizona felt a lot like work. I spent hours every day unpacking boxes, cleaning and organizing. I felt compelled to be productive for eight hours a day. Instead of compulsively checking my work email account, I began compulsively checking my personal email. The idea of spending an entire day reading a book was incomprehensible.

My husband, who retired four years ago, encouraged me to slow down. He reminded me the days belonged to us. There were no deadlines. There were no fabricated goals to be met. There was just time.

I gradually began to devote less energy to unpacking boxes. I spent more time training our dogs. I started setting aside at least an hour a day to write. I started playing my clarinet���something I haven���t done since I was in high school.

My husband and I are starting to develop a daily routine that allows both of us the time to do the things we enjoy. We���re both up before the sun rises so we can exercise our dogs before the heat sets in. After that, we plan our activities for the day. Most of the tasks are mundane. But we find pleasure in simple things like riding our bikes to the grocery store.

The most difficult part of retirement for me has nothing to do with time. It has everything to do with money. Not getting a regular paycheck feels odd.

I struggle with the idea that I no longer contribute as much to our household expenses as my husband, who receives a generous pension. Since I was 18 years old, I���ve always paid my own way. I never received an inheritance. I never had a college fund. Every penny I have today is there because I earned it myself.

I���m thankful my husband and I are in a better financial situation than I expected. We sold our house in Oregon for more money than I thought possible. Having a substantial cash reserve in the credit union helps relieve some of the stress I feel.

If the need arises, I���m willing to go back to work. I feel confident I could find a part-time job. But for now, I���m happy spending my days getting caught up on all those things I put off for the past three decades.

As for those boxes that still need unpacking? They���ll still be there next week.

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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A Bad Trip

FALLING IS ONE of the scariest health risks that seniors face. According to the Centers for Disease Control, more than one in four seniors fall each year. The CDC estimates that over three million older people are treated in emergency rooms for falls annually, and more than 800,000 are admitted to hospital.

Most hospitalizations after a fall are to treat head or hip injuries. Falls also cause broken bones, especially in wrists, arms, ankles and hips. The fear of falling is known to cause seniors to limit their activities. My wife and I saw this firsthand with our parents.

Sadly, a fall often precipitates a downward health spiral in seniors, leading to hospitalization and death. No wonder so many seniors have an oversized fear of falling. The CDC groups the causes of falls into seven general categories:

Lower body weakness
Vitamin D deficiency
Difficulties with walking and balance
Tranquilizers, sedatives, antidepressants or over-the-counter medicines that affect balance and steadiness
Vision problems
Foot pain or poor footwear
Broken or uneven steps, throw rugs or clutter that leads to tripping

I took a tumble on July 3 while attending a family party. My issue was No. 6 on the above list���poor footwear. I rarely wear flip-flops, but I did on this day. The right flip-flop caught the edge of a concrete patio as I was carrying plates of grilled hotdogs and a bottle of barbecue sauce.

With both hands full, I couldn���t use them to break the fall. I hit my left upper shin on the sharp edge of a tile. It created a near-straight line cut. Initially, I was more embarrassed than hurt. To add to my humiliation, the barbecue sauce jar hit the ground and exploded, spreading sauce on the patio and splattering my clean white shirt.

Within about 20 minutes, my shin had swollen to the size of a baseball and started to hurt. Luckily, my wife is an experienced nurse. She had me sit down and elevate the leg. My sister-in-law supplied an ace bandage and an ice pack. This worked well and reduced the swelling by about 50%.

Everyone was nice to me. They served me dinner and some of the lovely cabernet sauvignon I���d brought to accompany the food.

The next day, my shin was swollen and sore, but I could walk without pain. Two weeks later, it was still somewhat swollen and the area was visibly bruised. Clearly, there was internal bleeding.

What can you do to prevent falls? The CDC developed the ���stopping elderly accidents, deaths & injuries,��� or STEADI, initiative to try to reduce falling among seniors. It offers educational material and tools for individuals, caregivers and health care professionals.

In my case, I believe continuing to improve my health and fitness is the key to living a happy and safe retirement. Proper footwear is doubly important to me. I have previously written about an arthritic joint on my left foot, at the base of the big toe. It has grown quite large, which makes finding shoes difficult.

A friend���s uncle once provided some sage advice: ���Two things in life you should always buy quality���a bed and shoes���because, if you aren���t in one, you���re in the other.���

Wise words. Sadly, my flip-flop days may be numbered.

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A Sad Situation

I RECENTLY CHATTED with a clerk at an art supply store. We both complained about the Texas heat. Whenever I engage in small talk or meet new people, the weather is my safe, go-to topic. As the saying goes, ���Everyone talks about the weather, but no one does anything about it.���

Changes in the weather affect us to varying degrees���pun intended. Some effects are minor, like rain interrupting our outdoor plans. Others are more serious. When the fall and winter bring darker and colder days, many people experience seasonal affective��disorder (SAD).��Symptoms vary, but SAD is manifested by listlessness or sadness, if not outright depression. In extreme cases, there���s a feeling of hopelessness or worthlessness and an all-around negative view of life. It���s an extensively documented medical condition.

An estimated 6% of the U.S. population are affected by SAD. Another 14% suffer from a lesser form of seasonal mood change known as the winter blues. It���s more common among people living farther from the equator, where daylight is in shorter supply. Fourteen percent of residents of Oslo, Norway, have seasonal affective disorder compared to 4.7% in New York City.

This mood disorder can affect our decision-making, including our financial decisions. Negative and unsure feelings increase risk aversion among investors. Risk-averse investors are less willing to buy stocks, and may even consider selling the stocks they already own.

According to a paper that analyzed the flow of money between mutual fund categories, investors prefer safer mutual funds in the fall and riskier funds during spring. The same researchers found this trend was offset by six months in Australia, where the seasons are reversed.

A study published by the Federal Reserve Bank of Atlanta concluded that stock returns vary seasonally with the amount of daylight in the fall and winter. Another study by the University of Toronto���s Lisa Kramer found that, on average, markets tend to decline following the fall time change.

I draw two key lessons from this research. First, we are human beings, not unemotional Vulcans like Star Trek���s Spock. Outside factors, like diminishing hours of daylight, may affect our emotions, whether we���re conscious of it or not. Second, this emotional changeability can affect our decision-making ability, rendering us less rational.

What can we do to combat the effect on our investment strategies? Here are three approaches that work for me.

First, have a solid investment strategy and stick with it. A good safeguard is to own a balanced portfolio with a blend of risky and safe investments that you feel comfortable with. In our case, this means having about five years of spending money in cash investments. On top of that, my husband Jim���s 403(b) is invested in a guaranteed fixed-rate annuity.

My IRA is invested mostly in stock funds, with a tilt toward value and small-cap shares. I follow investment advisor Paul Merriman���s ultimate buy-and-hold portfolio. Regardless of the season or the economic conditions, I buy and hold. When the stock market took a tumble this year, I made no changes.

Admittedly, I���m uneasy seeing the value of my IRA decline significantly. But knowing that I don���t plan to touch that money for another 15 years means I can afford to ride out this downturn. I also remind myself that, during the Great Recession of 2008-09, I took advantage of the steep decline by continuing to buy stock funds, and those purchases proved very profitable.

Second, while we can���t eliminate or completely control our emotions, we can set up a system to eliminate the temptation to act irrationally. In my case, this means investing automatically. With automatic contributions, I buy even when the market is down, no matter what my mood.

Third, I recognize that there���s a seasonal component to our emotions. When my mood is low in winter, I understand that it���s probably only temporary. As the saying goes, ���What goes up must come down������and vice versa.

It helps to have a strategy to get through the rough patches. I surround myself with things that are comforting and try to go easy on myself. This was especially true in 2020. Not only did we face the COVID-19 lockdown, but my father���after a prolonged illness���passed away that December.

I was lucky to have the companionship of Jim and the cats. I started drawing and painting to get through the day, and tried to keep in mind that spring was just around the corner.

Jiab Wasserman, MBA, RICP��, has lived in Thailand, the U.S. and Spain. She spent the bulk of her career with financial services companies, eventually becoming vice president of credit risk management at Bank of America, before retiring in 2018. Jiab lives in Texas with her husband Jim, who also writes for HumbleDollar. She's an advocate for addressing the issue of gender inequality. In addition to writing and playing tennis, Jiab creates and sells art, which is available through her online shops. She and Jim are working on a new book, due out in 2023, that examines the impact of social media influencers on youth consumerism and identity development. Head to Linktree to learn more about Jiab, and also check out her earlier articles.

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Inflation and Me

INFLATION IS HURTING all of us���but in different ways. Even as the Federal Reserve tries to tame the inflation beast, it���s also prudent to look at our own spending and see if there are ways we can help ourselves.

What are some of the things my wife and I are doing? We had a recent discussion about the issue and came up with a list of modest changes we plan to make:

We���ll drive less. Most anything in our town is a modest walk or easy bicycle ride away. Parking in the summer can be a challenge in our seaside town, so biking or walking also means less aggravation.
We���ll try to cook more. We like going to restaurants, but prices have gone way up. In our area, there are a number of BYOB restaurants. This is a great way to save money. Another idea: Go out to breakfast or lunch. Those meals are usually less expensive.
We can share dishes. Many restaurants serve large portions, more than we want or need to eat. We frequently bring home leftovers. Instead, we���re planning to share an appetizer or salad and then split an entr��e.
We���ll look for sales and bargains, especially in the grocery store. In addition, we plan to be more conscientious about not wasting food. We���re lucky to have a number of excellent farmer���s markets near us. Our town���s Wednesday market has great local produce, and it���s easy to get there by bike.
We���ll be more aware of our spending. While I don���t consider us spendthrifts, we also don���t agonize over spending. But perhaps we should: We���re recent retirees, the financial markets have suffered steep losses and we���ve spent a significant sum on home improvements in the past 18 months. The good news: We���re close to the end of our home improvement projects and this ���above budget��� spending should be sharply reduced.

Admittedly, most of these changes will have a modest impact on our day-to-day spending. One item in our budget that we plan to increase significantly in the next five to 10 years: travel. There are many places left on our bucket list, and fewer years left to see them. We���re starting to discuss where���and how���we want to travel, while we still have our health. This is money I look forward to spending.

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