Wisdom on Wealth

WEDNESDAY MORNINGs AT 7:45

Everyone has money questions, whether it's what to do about retirement, or how to invest for the first time. Each week, Byron Moore offers practical, down-to-earth advice on handling money; and shows that even though money is important, paying attention to it can keep it from ruling your life.

Income Inequality

Sep 19, 2018
Stelios Lazakis / Flickr.com https://www.flickr.com/photos/slazgrc/2976222844/

Income inequality – what is it really? And is it a problem?

Well, it depends on whom you ask.

Representing the “Yes, it’s a problem” camp is Christine Lagarde, a French politician who serves as the managing director of the International Monetary Fund. The IMF is a global lending organization (formed by 188 countries) that is best known for stepping in when troubled nations are having difficulty paying their bills. They offer loans for troubled economies, but also usually require strict budget cuts.

Predictions

Sep 12, 2018
Thomas Hawk / Flickr.com https://tinyurl.com/y8xhg4xu

Stop trying to aim at (and hit) a target you can’t see. Doing so usually results in harm to yourself or others.

Here’s a news flash: the future is really, really difficult to predict. For every economist pessimistic about the remainder of 2018, I can find you an optimist. But to be honest with you, I have no idea which one is going to be right about 2018. Or 2019.

 

In April 2000, the International Monetary Fund released a statement affirming that “the picture for global growth is a strong and quite positive one for the year 2000 and we believe beyond.”

Aim For the Sweet Spot

Sep 5, 2018
William Murphy / FLICRK.COM https://tinyurl.com/ycp3vcyn

“What really makes for a good financial plan?”

“What all I should try to plan for?”

“What do most people do?”

I get these sorts of questions from individual who come to see me for the first time.

What do most people do? Nothing.

Or they wait, saying they’ll do “something” later. Waiting allows you to do nothing, but with dignity.

ShinyPhotoScotland / Flickr.com https://tinyurl.com/y7m4j3vl

Are you an optimist or a pessimist?

 

You remember what Garrison Keillor used to say about the children of Lake Wobegon, who are “all above average.” Sociologists have tagged this “illusory superiority,” or the tendency we all have to overestimate our positive qualities. CBS News reported on a classic 1977 study in which 94 percent of professors rated themselves above average relative to their peers.

So, most people view themselves as positive, optimistic, capable people. If this is how you see yourself, you are…average (sorry).

Jamie / Flickr.com https://tinyurl.com/yakqnb3e

If you are someone old enough to be thinking about retirement budgeting, think realistically…and don’t forget your meds.

 

I find many pre-retirees assume that their post-retirement medical expenses will go down, since they no longer have to pay for health insurance.

Medicare to the rescue, right?

Well, if that’s you, hold your horses, Roy Rogers. You need to check your assumptions.

Craig Edwards / Flickr.com https://tinyurl.com/ybhqbua2

I remember the day he came to see me.

“She’s just so emotional,” he said, as if he was talking about a disease. “About everything really, not just money. How can I get her to see that?”

 

“See what?” I asked. “That’s she’s emotional?”

Buddy, she already knows that. My guess is that she needs to see that you value her emotions as the powerful force for good they can be. Then, with that assurance, she can also see that her emotions don’t need to run her life (or yours)…just enhance it.

Thomas8047 / Flickr.com https://tinyurl.com/yd9xg6v8

Question: I’ve worked for the same company for most of my career. Now they are offering me a retirement pension check or a lump sum of money instead. Which is usually better?

 

Sometimes individuals approach me and ask my opinion about a retirement option being offered to them by their employer.

Having worked for the same folks for many, many years and expecting a retirement pension check once they reach retirement, now they are being offered a choice between taking the monthly pension check guaranteed for life, or a lump sum of money.

401(K) 2012 / Flickr.com https://tinyurl.com/y82mdaws

Annuities may be a useful tool in your retirement income toolkit. But they are no substitute for a plan.

An annuity is guaranteed money in your mailbox every month.

 

The most common way to get that check coming your way is to make a contract with an insurance company (that’s what’s happening when you buy an annuity). You may either give them a lump sum of money (for example, $100,000) or you may make a series of payments to them (such as $1,000 per month).

Getting back to normal

Jul 25, 2018
Ren Kuo / Flickr.com https://tinyurl.com/yb9a5cqa

When are things going to get back to normal?

Funny, isn’t it - things are always getting back to normal. But they are rarely normal. What’s that all about?

In math, they call this reversion to the mean. A simpler way to express this might be “the more things change, the more things stay the same.”

Christos Tsoumplekas / Flickr.com https://tinyurl.com/yb3qazpm

Fear is a funny thing – it often tricks us into exchanging one perceived problem for a much larger one.

I don’t know too many folks who break into a cold sweat when they get into a car to drive a few hours. But let that same person board an airplane, and they are much more likely to experience a heightened sense of fear, even dread.

 

The National Safety Council estimates your lifetime odds of dying in a car accident at about 1 in 100. For air travel, the lifetime odds are about 1 in 200,000.

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