Wisdom on Wealth

Wednesday at 7:45 a.m.

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.

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The best time to fire someone is before you hire them. And sometimes the best loan for you is the one you don’t take out.

I’ve had people come to me loaded down with poor past decisions, currently reflected in a crummy credit rating. Then, while treading water in a sea of maxed out credit cards, they find it… their dream home! It would be perfect for the kids, perfect for the neighbors, perfect for work and..well…it's perfect!

Matthew Peoples / Flickr.com https://tinyurl.com/znrbpep

“Ladies and gentlemen, this is your captain speaking. I’d like to welcome you aboard Retirement Airlines. We know you have a choice when you fly and we’d like to thank for choosing Retirement Air.

“The tower is telling us we’ve got some bumpy weather ahead of us….European debt down drafts are pretty strong still and we’ve got some pretty strong winds blowing out of the housing depression as well as some unemployment turbulence.

Guilia Forsythe / Flickr.com http://tinyurl.com/zatmg97

If the purpose of a financial plan is to predict the future for you, I’d say save your money. You’ll do about as well with a monkey throwing darts at some charts.

But if you want to know what the real purpose of a financial plan is, look no further than what happened to the University of Arkansas Razorbacks and the New Orleans Saints football teams a few years ago.

If you aren’t a football fan, here’s a little background on both teams: each had a great season in 2011. And both teams brought most of their key player talent into the 2012 season.

Pablo Ricco / Flickr.com http://tinyurl.com/zpdh9r2

By now you’ve probably figured out that something has changed.

A lot of us thought we would be a lot closer to being able to retire by now. But for many in their 50s and 60s, retirement isn’t exactly over the next hill.

In fact, there are a lot of people who will be waiting quite a while longer before they are able to retire.

But while you are waiting, consider the difference between waiting in line at Disney World or waiting in line at the drivers license bureau. Both involve waiting, but the sense of anticipation could not be more divergent.

Jeff Turner / Flickr.com http://tinyurl.com/jjxhg88

Thinking about buying a bigger house?

Well, you never just buy a bigger house.

You also buy a bigger light bill, heating bill, water bill, insurance bill, decorating bill, remodeling bill, lawn care bill. And if you happen to move into that nice upscale neighborhood, you might also tack on to all the rest a larger set of expenses for a more upscale lifestyle (food, travel, entertainment).

None of this is necessarily good or bad. It’s just reality.

Garrette / Flickr.com http://tinyurl.com/zzs4gle

When it comes to making decisions about your cash flow, precision beats perception every time.

Let’s say you’ve taken your car in for several repairs in the last couple of months. You might start assuming you’ll need to replace it soon. You starting checking to see whether or not you’ve got enough cash…should you try to get one of those zero percent finance deals or use my cash?

eltpics / Flickr.com http://tinyurl.com/hb92hfg

I find that the farther away an event is, the more willing people are to accept risk now in hopes of dealing with it later. But when later comes…

Why else would a 45 year old man keep telling himself, “I’ll do some retirement planning…when the kids are out of school.”

The same is true for many a 60 year old who says, “I plan to self-insure for long-term care,” when they may know very little about the risk they are now so blithely accepting.

Ken Teegardin / Flickr.com http://tinyurl.com/jvdw3g5

How is anyone supposed to do any financial planning these days?

After all, we don’t know if taxes are doing down, the affordable care act is going away, jobs are coming back or a border fence is going up!

How are we supposed to know what to do next?

Really? Is it really that difficult?

Or are you just stuck because your concept of financial planning is proving to be fatally flawed?

Jake Stimpson / Flickr.com http://tinyurl.com/z92e48x

It is a story too often repeated.

A woman used to being independent and self-sufficient insists on living by herself, even as she ages. Over time, the family notices that some of the people working for her are “borrowing” money from her. Or they hear (after the fact) of a sales person who has come to her house to sell her some financial product she neither understands or needs.

Her children become concerned because Momma does not always know what day it is. But what can they do?

First, you can call it what it is – financial elder abuse.

Flickr.com / duncan c / https://creativecommons.org/licenses/by-nc/2.0/

What is your time horizon when it comes to your retirement planning?

Before you answer, check your calendar, your watch…or maybe your birth certificate. I’m guessing your time horizon is a lot longer than you might realize.

If, for example, you said that you have a 20 year time horizon, I’m guessing you mean the time until you plan to retire. So that would make you mid-forties (sorry to give that away).

You feel like you are at the base of your own personal financial Mount Everest and you’ve got a mere 20 years to climb to the top. Fine.

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