financial advice

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Windfalls come in all shapes and sizes

I remember a guy who came to see me years ago from out of state. He’d won a big lawsuit and his part of the settlement was over $1,000,000. He never dreamed he would see that much money in his life. He took a vow of poverty, promised to “not change anything” and to not be one of those foolish people who spend it all. This was his ticket.

Well, three years, two wives and one very unfortunate trip to Vegas later, he was broke.

Maybe your windfall comes from an inheritance. Or maybe you won the Lotto.

Dispute
Neil Moralee / Flickr.com https://bit.ly/2OP9HCA

You’re married and you handle the money in your family. Your spouse likes it that way, as money has just never been their thing.

But lately, things have gotten out of hand. Your finances are in trouble,

Should you keep your partner in the dark?

No.

And as much as you hate the thought, you don’t want to keep him in the dark any longer. It isn’t helping him and I’m sure it isn’t helping you.

A.D. Modlin / Flickr.com https://bit.ly/2k2sMEm

James Joyce called mistakes “the portals of discovery.”

So, don’t fear making mistakes. Fear not learning from them and repeating the same few endlessly.

When it comes to financial matters, here are a few of the most harmful mistakes that, if made and repeated over and over, can do irreparable damage to your the financial security.

However, if these same mistakes are recognized, admitted, learned from and then run from, they might just do some good.

401(K) 2012 / Flickr.com https://bit.ly/2w8kxci

Living within your means is an illusion, and when you are awakened from your dream, it will be too late.

Most of us have the idea that if we are living within our means, we’re OK, even if it means we can’t save anything right now. You’re not racking up debt, but you’re also not saving. Is that OK for a while?

No.

If life was a straight line of experiences and expenses, each one following predictably after the other exactly as planned, you might be able to pull this “living barely within your means” thing off.

GotCredit / Flickr.com https://bit.ly/2W0iyVQ

Did you get a tax refund this year?

 

Maybe you look forward to getting a tax refund every year. Maybe you pay off some credit cards with it, other times you take a little vacation, do a small home renovation project or make another large purchase.

It’s almost like a savings account, right? Or better, an annual bonus payment!

But then you have this know-it-alI friend at work that says you’re giving the government a free loan. Are they right?

Well, back when savings accounts were paying 5%, your friends had a point.

Youchao Wang / Flickr.com https://bit.ly/2Z3S3xJ

I am sometimes approached by young people, often recent college graduates, who want to know if I have any financial tips for someone their age.

If you’re a young college graduate and you’re already thinking about how to be financially responsible, congratulations on separating yourself from the crowd by doing two things most people your age often don’t: seek advice and think ahead.

401(K) 2012 / FLICKR.COM https://bit.ly/2VKkIoI

Last week I talked about the benefits and limitations of taking your Social Security benefits early…before the so-called “normal retirement age (NRA).”

So now, let’s see what happens if you take your Social Security benefits “on time” or on a delayed basis.

401(K) 2012 / FLICKR.COM https://bit.ly/2VKkIoI

When should you begin taking your Social Security benefits?

Should you opt to begin your benefits as early as possible, usually age 62? Or should you wait until your normal retirement age (NRA), which may vary from age 66 to 67 these days. Or you may want to wait until the last possible minute, age 70.  

The first thing to do … is get your facts straight.

401(K) 2012 / FLICKR.COM https://bit.ly/2EP7y37

Have you gotten to the age where your investment company is sending you the required minimum distribution amount from your IRA each year?

 

If you’re like a lot of folks I know, you don’t really need the money, so it’s just sitting in the bank, earning nothing.

If that’s you, you may be wondering if you have other options.

JM / Flickr.com https://tinyurl.com/y5f92zuz

“I trust my wife completely,” he said to me. “It’s the guy after me I’m worried about.”

“I’ve decided to buy a pretty large life insurance policy on myself so that if something happens to me my wife can keep raising the kids,” he explained his reasoning to me…

 

“She would have to forgo much of her career to raise our kids alone, so it wouldn’t be fair for her to have to go back to work later in life just because I died early.”

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