Boomers, Markets & Money

A Down-to-Earth Discussion of Financial and Lifestyle Information for Baby Boomers


A Critical Step in Preparing for Retirement

How Are We Spending Our Money? (click to enlarge)

How Are We Spending Our Money?

Do you have peace of mind about your retirement savings? A key contributor to anxiety is that most of us don’t know how much we are spending now. And we have no idea what our future expenses are likely to be.

A financial planning fact finder can guide you in gathering important information about your assets, debts, insurance, expenses, and goals.

The good news is as you put each piece of the information puzzle in place:

  • You get a feeling of satisfaction and accomplishment.
  • Anxiety drops.
  • Ideas on helpful things to do will become clearer.

The main thing is to get started.  You don’t have to be perfect.  As you gather data, you put yourself in a place to make more realistic choices.

Everyone has a different approach to getting a handle on expense tracking. For example, my brother and his wife wrote down everything they spent money on for years.  This approach was a lot of work, but it helped them free up funds to save for retirement and to do fun things like travel.

I tried their approach for nine months and found it useful.  As I wrote in the post “Tightwad Tips:Small Recurring Savings Add Up”, when we bought a vacation home, we had an added incentive to conserve money. Writing down our expenses helped us come up with cost cuts that weren’t too painful to make.

Planning Helps Bring Peace of Mind

Planning Helps Bring Peace of Mind

After a while, I found this method too time consuming but it taught me to take a look at expenses periodically to see what I could trim.

Now we are at a new stage, where my husband is gradually cutting down on the hours he is working (unfortunately, the money goes down, too!) over the next few years.

So, to take the emotion out of dealing with this new stage, we decided it was time we worked with some investment professionals.  Right now I am gathering information for a “Financial Planning Fact Finder.”

You can get financial planning organizers from most investment firms.  You can also find many variations on the web.  Below are links to examples of worksheets I found on BalanceTrack, a financial education website.  It doesn’t matter if you track your expenses on a complicated spreadsheet or write them in pencil on a piece of paper.  Just total them up each month to see where the money is going.


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Survey Says: Give Apple Common Shareholders a Slice of Cash

DSC_1165Tech companies have a hard time accepting that they’ve grown up. Acceptance of middle age doesn’t come easy to any of us, I guess.

Weekday mornings I read the CFA Institute Financial Newsbrief, an email newsletter that collects financial articles from around the world. It’s an easy way to scan many stories quickly. This week’s poll caught my eye because it concerned Apple and dividends, two hot topics in the investment world.

The poll asked was: “What is likely to provide Apple shareholders the highest risk-adjusted rate of return on the company’s excess cash balances?” SmartBrief was kind enough to allow me to share the poll results.

Poll of readers of the CFA Institute Financial Newsbrief. Weekday email newsletter sent out by Smartbrief.

CFA Institute Financial Newsbrief. SmartBrief

I voted for the top choice: “Common stock dividends, including a one-time or a series of special dividends” which received 45.04% of readers’ votes.

Here’s why:

Companies have a natural life cycle. When they are young, they need to reinvest earnings to grow the company. As they mature, they generate more money than they need to expand. Apple clearly has enough cash it needs to research, develop, and manufacture new products.

Executives will be tempted to do something foolish with excess cash.  They might acquire a company that doesn’t add value for shareholders. Or compensate themselves excessively.

• Individual investors are looking for dividend-paying stocks because they are searching for yield.

If you want to scan a selection of stories from numerous publications quickly on the investment and business world you can sign up for the CFA Institute Financial NewsBrief. SmartBrief also offers email newsletters for other industries and all are offered at no charge.


Nemo Found Rhode Island


According to this morning’s Providence Journal, National Grid announced 187,000 homes lost electricity in Rhode Island.  We wish these residents the best.  Many people are working long hours  in uncomfortable conditions to get electricity services up and running.

Here’s a short post I wrote when I lost power when hurricane Sandy hit.  SANDY: Homeowners Insurance Coverage for Food Spoilage.

Enjoy a few pictures of the snow and birds in our yard today.


This gallery contains 5 photos


How The Heck Do I Invest My Money?

The crazy, bizarre events of the last few years have had me scratching my head as I tried to figure out how to invest our money.

The older we get, the scarier these decisions become because we have less time to make up for our mistakes. And who has the time to keep up with each new crisis and every speech politicians make? Not to mention the volatility caused by high-frequency trading.

Barry Ritholtz’s article “Keep it simple, avoid the pitfalls” has good suggestions for simplifying investment decisions. These strategies help tame some of the emotions that are involved with investing money.

Ways to Avoid Portfolio Mistakes

Avoid Investment Pitfalls

  •  Use passive investing versus active investing. In other words, instead of investing in individual stocks or hiring an active manager, use index ETFs (Exchange-Traded Funds). My post “Resources to Help Boomers Decide if ETFs are Right for Their Portfolios” details a list of reasons investors choose to use these securities. It suggests articles that give basic information about Exchange-Traded Funds and helpful websites.
  •   Diversify across asset classes and keep expenses low. You hear this advice all the time but it is important—and hard to follow. We all want to pile into to the latest hot investment as the price is rising.
  • The suggestions of dollar cost averaging and “be mindful of valuation” seem to be contradictory but can be used in combination. I try to make myself add a little bit of exposure to an asset class that is underweighted in my portfolio as markets are dropping. I don’t try to buy at the very bottom since who knows when that will happen. I just figure, if a sector is down substantially, on average, I should be OK in five to seven years.
reduce stress of portfolio decisions

Tame Emotions

  • A few suggestions are particularly important for beginning investors:

Avoid venture capital and private equity

“Most IPOs are a sucker play.”

“Avoid new financial products”

Really, do you think the big money is going to give us individual investors a good deal?! These complex products are meant to humble, confuse, and separate us from our money. Warren Buffet is right when he repeatedly says that he only buys what he understands.

I recommend Ritholtz’s easy-to-read article. “Keep it simple, avoid the pitfalls” The Big Picture