Sushi Money

     What are your real motivations for making money?  Do you want to become rich?  Or is that something that seems too greedy?  I think we should be honest with ourselves, and the sooner the better!

     Lately I’ve been wondering how many of us are truly driven to increase our wealth.  When I say “driven” I mean that one of our primary goals in life is to save, invest or accumulate as much money as possible in order to become “rich”.  Is that a goal for you?   I must say honestly it never has been a goal for me before.  And what about business and entrepreneurship?  Is your goal to succeed and become wealthy through business and working hard developing a company?  What about using personal energy and creativity to achieve great things?   For me, that was never a priority either.  But I’m finding as I grow older that what we strongly desire, what we hold in our thoughts and dreams, and what vision we have for our future can indeed become our reality.   If money is not part of that vision or dream, then guess what?  It’s probably not going to be part of our future, or a reality in our life either. 

     When I look to my future, I see a desire for a comfortable, enjoyable life, free of worry and stress about financial matters.  I also see things I would like to do, and places I would like to go.  I also see that a lot of money may be involved at times.   In some ways that bothers me… I don’t want money to be the focus of my life.  At least not in terms of trying to get “more” money all the time.  But when I am really honest with myself, I do want the things and opportunities that money can buy.  I do want to be able to give to charity, to start new companies, to travel to far-off places around the world, to help educate children and increase opportunity for others.   All of that takes money that most of us must work and save many years to gather.  But do I only want to have that money after I’m 65 years old?  No!  I would like to have it sooner…  to enjoy along the way.

   But I’ve always been about balance, and I think that has held me back.  Not too many excesses here or there, not too much risk, yet not too much boredom.  Well, except perhaps flying off of aircraft carriers in fighter jets for many years… but it didn’t seem like risk at the time.  It was just something I strongly desired and enjoyed doing.   Otherwise, I’ve led a fairly moderate life and approach to things.  Even my investments are balanced overall.  But guess what?  I don’t think a balanced approach is necessarily going to achieve great things unless given a great deal of time.   Sure, with 30-40 years of consistent saving and investing, I think almost anyone can become very wealthy.  But most of us do not consistently save or invest for that length of time!  As it stands right now, I’ll give myself 25 years as an estimate for how long I will be consistently saving and investing until retirement.  Barring unforeseen circumstances, that should allow us to accumulate a very nice nestegg.  But unless we take on a little more risk, or succeed in a business venture, we are probably not going to ever become rich.   That’s a hard notion to swallow or accept, especially if you are someone who is accustomed to success.  

     As we grow older, it seems like we go through a process of cherishing the things we can do, and accepting the things we cannot, or may not, do anymore.  But I refuse to believe that I can’t become more wealthy!  The energy and creativity that exists within the human spirit is unlimited in my opinion, and we can achieve great things at any age.  So to wrap up this self-absorbed examination of “money motivations” I think what I’m saying is that I’m now going to acknowledge my desire to become wealthy.  I’m going to accept and encourage that desire as a goal for my life over time, as well as my other goals.  I will still try to achieve balance in all aspects of living… but where saving, investing and developing creative ways to make money are concerned?  I’m excited about a future that is only ours to create!  We’ve got to start somewhere, and there’s no time like the present.

     That seems to be the question for many things we own.  For example, our dishwasher received a recall notice last month.  Normally if it was broken we would think twice about calling for a repair service, depending on what might be wrong.  The charges for labor and parts alone would probably be half as much as a new dishwasher.   But for the recall notice, after checking with the company we were given two options:

1. Parts and service to make the required repairs, or
2. A $75 voucher credit towards a new dishwasher.

    Our dishwasher is about 8 years old.  Which would you choose?  We chose the repair service because the dishwasher works very well, and has always done an admirable job cleaning dishes.   If the dishwasher had been running poorly and not cleaning dishes properly we may have rationalized gettting a new one.  But spending $300-$500 for a new dishwasher was not a good option for us, especially with the company only offering $75!   I guess they ran the statistical numbers for their own costs, but the repair gentlemen that came out today says it costs the company more than the price of a new dishwasher for all the parts and labor.  Go figure.  I would have loved a new, free dishwasher!

    But we face these same decisions every day really.  Economists call it opportunity cost and it relates directly to  the value of a different choice that we give up when making a decision.   We are giving up the next best alternative when we make our decision.  In our case, the next best alternative was $75.  That was the opportunity cost involved in having it repaired instead.  Some may argue the real opportunity cost is based on $75 plus the quality and operability of a new dishwasher over a longer lifespan as compared with our old one.  But we would have spent an additional $300-$500 for that new one, which could also be considered opportunity cost. Lots of ways to look at it, but I think we got the better deal. 

     Sometimes we can make unreasonble assumptions or rationalizations as a way to justify our desire for having something.  Our wants can become so important that when we hear funny noises from our car, or the TV picture doesn’t look quite as good as the new TV’s in the store, or the shoes we have on just don’t look or feel right anymore?  We go out and buy new things, even if the old ones are working just fine.  We are making opportunity cost decisions, and in many cases we know that keeping the old, used car and running it a few more years will save tons of money over time.  The opportunity cost is not only based on purchase costs saved, but also the investment return the money could have provided in later years.  That’s something we don’t often consider… but it’s very important.  When we select one investment over another, or only invest $100 per month as opposed to $300 per month in our 401(k)… all those decisions can be looked at from an opportunity cost perspective as well.  Considering those decisions in the context of retirement 20 or 30 years from now can really involve incredible sums of money.

    But there are also other times when we know getting a different car or pair of shoes is just the right thing to do.  It may have absolutely nothing to do with money or logical-analytical decision making.  It may be an emotional thing that makes us feel better, and helps us do our jobs better while enjoying life more.   I’m all for that… and that’s why life and money management is all about balance, and choice!

   Our seven year old had a birthday recently.  It’s very interesting to watch kids grow up- ours is in the first grade now.  I think the birthdays of our children often promote more reflection than our own birthdays.  At least for now…  Maybe because we see the passage of time so much more quickly as the kids grow and change.  I don’t really know about that, but I do know how wonderful it is to see the joy in their eyes as they experience the excitement of life.   I also know our son will change as he grows up, and the cute little boy we have known for so long is going to morph into something almost alien in a few years! Hopefully not too much, but it’s his life, and I’ll work hard to help him fulfill whatever vision he sees for himself.   Naturally we spoiled him with gifts for his birthday.  Contrary to my semi-frugal nature, I couldn’t resist.   He wanted one of those really cool little remote control helicopters.  I found one online for half price- it works great!  I think I use it more than he does…   And he wanted a “robot dog” of some kind.  “What the heck is that?” I thought, but soon found the “robopet” at the store.  He has a new geeky friend for a while now.  And he’s finally old enough to have his own “stereo” system!  Yikes!  We found a nice small radio-tape-cd player he can use in his room… even has a voice recorder.  He laughed and laughed at his voice and mine on the tape.  I remember doing the same thing as a child.  Sometimes it’s the simple things, and seeing a smile on a child’s face really puts things in perspective.   Life’s going to be challenging enough for him in a few years… for now I feel thankful that when he wakes up, he is joyful for each day ahead.

   And now a timeout for Sushi!  I don’t talk much about sushi, but I do enjoy it.  There are only a few decent sushi restaurants in our area, so when we do visit it’s a real treat.  Today Yahoo! Beauty Eats blog wrote an overview about making healthy choices when eating sushi.  If you’re counting calories, there are some choices that are really full of ‘em!  I was surprised that they cited the noted Japanese cuisine expert Hiroko Shimbo stating that sushi restaurants do not use mayonnaise on sushi dishes?  I suspect that means in a strict and traditional sense for the art of sushi preparation, but otherwise that was not my experience after living in Japan for several years.  I found that the Japanese love mayonnaise.  You can find mayonnaise on many different foods, and especially mixed or chopped with sushi recipes that are used for rolls and other presentations.  It’s certainly not a staple or main ingredient, but more of an interesting choice on the menu.  Have you ever had pizza in Japan?  Many varieties are full of seafood and… yup, mayonnaise!

Hiroko Shimbo has written an amazing book on the subject of sushi:

The Sushi Experience

   But I think sushi is one of the healthiest food choices I have ever made.  Except that I can hardly keep myself from eating too much of it!  I love sashimi in all its forms, especially the beautiful Maguro, or tuna.  My favorite experiences were at the sushi restaurants with conveyor belts, and colorful dishes.  You chose what you wanted to eat as it passed by, and the staff would tally your bill by the color and designs on the plates.  I would usually have a stack of 15 to 20 plates by the time I was finished.  Yum!  And it’s just a pleasant experience… a little green tea, a little ginger between plates… and a relaxing dining experience.   Somehow I think sushi will only continue to grow in popularity over time.  Here’s to healthy eating! 

     How do you define retirement? How will you finance your retirement? A recent article by SmartMoney.com explores the major themes for those who have retired, or those considering the retirement journey.  The key focus these days seems to indicate that retirement is more like reinventing oneself.  Another definition might be leveraging one’s career and lifestyle for another.  In many cases older adults are continuing to work both for personal goals and financial need.  Whatever the situation, the lives of older adults have as many, if not more, of the concerns and considerations of people at younger ages. 

“People simply aren’t going to retire. They’re going to readjust their lifestyle.”

                                                                                         Harold Evensky

     That quote is pretty self-apparent, but that’s the key… it’s the “readjust” part that most of our questions and challenges are about.  And while the article above makes some excellent points about retirement considerations while managing your financial life, a lot of it is about getting there in the first place.  For many people, retirement is a far off goal, and something they didn’t really consider until middle age.  Like so much in life, it can sneak up on you, especially in terms of financial well-being.   So that’s really the first goal for most of us- ensuring enough money and cash flow is available to meet one’s needs for living expenses.  If cash flow must be increased, many people will certainly be working part or full-time, even during retirement.   The media often paints a rosy picture of the ideal retirement scenario.  I think we must be careful not to judge our situation against a fairy-tale metric that we read about in magazines.  Most people will work hard to have enough cash flow in retirement to meet their needs and goals, but often it’s other factors such as health care, or caring for a spouse or family member that increases our need for money over time.  This article from 2004 offers an excellent look at how to estimate cash flow for retirement.

     Sometimes net worth doesn’t even matter, but rather how much income is coming in on a regular basis to meet your living expenses.   I know of an elderly woman who is land rich.  She sits on more than a million dollars of real estate, but she lives frugally on social security as her only income each month.  Whether she doesn’t really want to sell it, or whether she wants more for the land that it’s worth, I don’t know.  She has not had any serious offers for the land these days, yet turned down a reasonable offer just a few years ago.  At this point, regardless of her real estate wealth, she has very little disposable income to meet her needs. Ideally, as we approach retirement we try to prevent or remedy a scenario that may take place such as this.  And that’s also where a good financial planner can help. 

     Many textbooks and articles cite retirement living expenses as 60% to 80% of pre-retirement living expenses.  That may be true, and it may not.  Each situation is unique, and while one individual or couple may find 60% more than enough, another individual or couple may actually be spending more money in retirement than they did in earlier years.   I think there are a few specific things we should consider before and during retirement:

1. Make a realistic assessment of your financial situation and a needs analysis for retirement.  Look honestly at your net worth, the budget for expected living expenses, and a desired standard of living in retirement.  Conduct an annual review and update the financial need analysis over time.

2. Continue to set aside at least 10% of income for saving and investing throughout our lives.  And work first to achieve an emergency fund of 3-6 months normal living expenses.

3. When considering future withdrawals from investments and savings, think about  how much you’ll need.  Annual withdrawals of no more than 4% of assets are often necessary to fund a lengthy retirement.  Real determination of withdrawal rates and asset comparison must be done with analysis of such factors as life expectancy, forecast cash flow, investment portfolio growth and expected income needs.  But 4% is often a realistic number for many people.

4. As many authors emphasize, diversify financial assets!  If you don’t know how to do that, then read, research or get help.  Diversification is very important.  This site from the SEC  has excellent information for those trying to understand diversification and asset allocation.

    Where do you fit in?  If you’re thinking carefully about your financial needs then you’re probably ahead of the pack.  And there’s lots of help out there. 

• Here’s a great article about strategies for a successful retirement. 

• AARP has excellent resources and information.  

• Two of my favorite sites are RetirementLiving.com and the 360FinancialLiteracy.org retirement section .   

• For social security concerns and information, you can research your expected social security retirement benefits online. 

• There are even inspirational retirement sites such as Retirement With a Purpose.

     Whatever your situation, it’s worth noting that there are many, many other people facing similar challenges and decisions as they approach retirement, and exploring new options in retirement.   Finding ways to increase cash flow is becoming a focus for many businesses, such as those offering reverse mortgages, specialized annuities, etc.  Be careful with whom you do business!  While there are many good companies out there that work with seniors, there are also many unscrupulous individuals.  Just don’t jump into anything without a good second opinion.  I’m a firm believer in finding an independent certified financial planner for a first and second opinion!  The good news is that most people believe their retirement years, even while working in a new field or living a new, sometimes very different lifestyle, is probably the best they’ve experienced in their lifetime.   I don’t know where I’ll be, or exactly what I’ll be doing in the decades ahead.  But suffice it to say that my goals are set to achieve a lifestyle that will meet our needs in a variety of circumstances.  Now all we have to do is work towards them and stay the course.  But having goals in the first place is really important- it helps frame the vision for what we want to achieve.

     P.S. Don’t forget estate planning!  Getting our financial lives in order includes making sure our wills are up-to-date, and that we have thought about what happens after we’re gone.  It will sure make things easier, and less expensive, for family members and others!  Have you heard of the Five Wishes?

I don’t know who said it, but this seems more and more appropriate…

“The older I get, the smarter I used to be.”

I used to think I was halfway intelligent, and could understand most legalese I came across. But credit card agreements have always been a little confusing, and when I get halfway down the page I feel like I need a translator, or a brain massage! I just want to know my due date, grace period, billing and how the interest rates and penalties may be charged on the account. But it’s never that simple. One of my major credit cards recently sent “Important Changes” to my credit card agreement. This is a card I usually pay off each month, but sometimes go a few months with payments larger than the minimum due. It all looked pretty standard until I tried to make sense of the minimum amount due, and “adjusted” minimum amount due.

Honestly, I don’t really expect anyone to read this mumbo jumbo, but if you can make sense out of it (especially the adjusted minimum amount due) and know why they may have changed the terms I would be very interested! A good bet that the new terms bring in more dollars for the company, but there’s just too many “or” words in there.  This is really consumer friendly isn’t it?

Minimum Amount Due
Each billing statement will reflect a Minimum Amount Due. Payment is due by the time and date shown and in the manner prescribed on the statement. The Minimum Amount Due will not exceed the New Balance. You may pay more than the Minimum Amount Due, up to the entire outstanding balance, at any time. To calculate the Minimum Amount Due, we add together the following amounts, round the result to the nearest whole dollar, and then add any amount past due:
(1) the greatest of:
(a) 2% of the New Balance (excluding from the New Balance any over-limit amount and any late fees or over-limit fees);
(b) the lesser of:
(i) current billed Finance Charges plus 1% of the New Balance (excluding from the New Balance any over-limit amount, any late fees or over-limit fees and finance charges), or
(ii) 4% of the New Balance; or
(c) $15;
(2) any over-limit fees added during the billing period;
(3) any late fees added during the billing period; and
(4) 1/24th of any over-limit amount (the part of your New Balance in excess of your credit line).

Adjusted Minimum Amount Due
Summary: If you consistently pay more than the Minimum Amount Due outlined above, we may calculate your minimum payment without any late fees, over-limit amount or the additional 1% of the balance referenced in (1)(b)(i). If we do this, and finance charges are more than 2% of the balance, we may add $15 to your minimum payment. For information about how this works, read the detailed description below.
Detailed Description: We may adjust the outlined calculation above by removing the late fees in (3), the over-limit amount in (4) and “plus 1% of the New Balance” in (1)(b)(i). In the adjusted calculation, we will exclude only the over-limit fees from the New Balance in (1)(a). After the adjustment, if (1) is equal to the current billed Finance Charges, we will increase your Minimum Amount Due by $15 We will apply the adjusted calculation to your Account if:
the sum of your payments (credited to your Account in the six consecutive billing periods ending with the Closing Date of the current billing period) is greater than the sum of the Minimum Amounts Due (for the six consecutive billing periods ending with the Closing Date of the previous billing period, not using the adjusted calculation and including the amount past due in only the first of those six periods);
- the sum of the Minimum Amounts Due is equal to the sum of your payments and it is less than or equal to $90;
- the sum of the Minimum Amounts Due is zero and we used the adjusted calculation in the last billing period when your Minimum
- Amount Due was not zero; or
- it is the first billing period ending on or after November 16, 2007, and your Account was opened before that date.
If we adjust your Minimum Amount Due, we will do so for at least six billing periods, and if we stop adjusting your Minimum Amount Due, we will not adjust it again for at least six billing periods, regardless of your payment history.

ConsumersUnion.org estimates that as many as 27,000 Americans become victims of identity theft each day. That’s an amazing statistic. So score one for personal empowerment and the prevention of identity theft with Transunion’s announcement that consumers can now “freeze” their credit authorization on request with the click of a mouse. A credit or security freeze bascially “locks down” your credit files, preventing anyone from using your credit history and authorization for taking out new credit. Before any use would occur, the consumer specifically must approve the use or access to their credit. The credit freeze service offered by Transunion is not offered directly by the other major credit reporting agencies (Experian and Equifax), however the ability to freeze your credit files is guaranteed by law in at least 40 states. ConsumersUnion.org has an excellent guide to state security freeze laws, highlighted by state.

Many of us are surprised to see some states not listed, but legislators in these states are wrestling over exactly what a good credit freeze protection law is. Most of the laws have been passed in the last 3-4 years, so all U.S. states should eventually pass laws due both to consumer interest, and a viable need for control over credit data. With Transunion’s move offering this service to consumers in all 50 states, the pressure is on for the other credit scoring agencies. It’s about time… to really manage our personal credit files, we must have access to their use and control, and especially the ability to prevent others from accessing or using our credit. Good for Transunion, and come on other guys!