Tuesday, November 25, 2008

Some New Blogs--Well, New to Me

This is essentially a wannabe retiree blog. As a result, most of my posts and much of my blog-reading is geared toward those saving for retirement, close to retirement, or already retired.

Thanks to Syd at Retirement Is A Fulltime Job, I have two new blogs to add to my blogroll:

First up is Analise,in Financially Free to be Me, a retired educator in her mid-fifties. I forgive her for being younger than me and for having larger savings than me. She picked a tough time to retire, but so far, isn't regretting the choice.

Another retiree's blog I've added to my list, is My Wealth Builder, a much more investment-oriented blog. I haven't read it long enough to know if I agree or disagree with the investment advice, but I particularly like this post regarding retirement during tough economic times. The author, having retired in October, 2007,(the peak of the market as it subsequently turned out) recounts mistakes made as well as what has worked out so far.

Saturday, November 22, 2008

Color Me Cranky

Here's how NOT to be a good guest.

I've had an out of town friend spend the last three nights at my home while attending a training session. Understand that I like this person immensely, and I doubt she has any clue as to how she drove me crazy during her stay.

First thing: She came downstairs to my warm living room, threw open the french doors that close off the living room from the upstairs, and said, "It's cold upstairs. Let's get some heat up there."

Umm--let's NOT!

I deliberately close off the upstairs because I don't see the need to heat the bedrooms, especially when they are not in use during the day and there are down comforters for the night. I have oil heat, and though oil is coming down in price, it is still expensive. Why couldn't she see that all the doors were closed, and obviously I did not want the upstairs heated?

Then she took a shower, and suggested I get the water pressure checked because the shower was "slow."

Again, umm NO!

Both of the bathrooms in my home have low-flow showerheads. Get used to it. I have.

She picked up the phone to make a call, but discovered I was online. Yep--Grace still uses dial-up. My friend proceeded to tell me how much better a dedicated computer line is. Well, yeah, but it also costs a heck of a lot more.

Finally, she looked in my refrigerator for a Diet Coke. There was none because none has been on sale since I got back from my vacation. To be fair, every other time she has stayed with me, I've had soda but when I said it was too expensive, she made a comment about "not taking the current crisis so seriously that I deprive myself of small pleasures."


I know she means well, but I still found myself resenting her remarks. I wish that she had kept her observations to herself and assumed that I had rational reasons for doing or not doing what she thought should be done.

I'd be even crankier, if she hadn't treated me to breakfasts in restaurants three mornings running! Feed me, and I'll forgive almost anything.

Thursday, November 20, 2008

Financial Limbo Rock

I'm probably showing my age here, but I still remember all the words to Limbo Rock, including the chorus:

"How LOW can you GO?

Do the Limbo rock!"

Not that I was ever much of a dancer, but financially, it's clear I can go pretty dang low.

Today when I checked my 401(k) balances, they were below $100,000.

Did I mention that on October 9, 2007 they stood at $174,518?

Did I mention that I've been faithfully depositing $1000 per month through December, 2007? And after that to this very day, I have been depositing $1025 per month?

Did I mention how very scary this recession is? And how worried I am that my projected recovery time of 9 years might not be enough?

I'm ready for THIS dance to be OVER!

Tuesday, November 18, 2008

Where Were You During the Last Financial Crisis?

This is NOT our nation's first financial crisis. This is NOT our nation's worst financial crisis.

So why does it prey so heavily on my mind?

Well, it IS the first financial crisis where I've been paying attention to my personal finances.

I wasn't around for the great depression of 1929. My parents were, of course, and it affected the rest of their financial lives in a positive way. But their caution did not rub off on their daughter. Maybe a financial crisis is something you have to live through in order to learn from?

But I was present for the oil price surge of 1973-1975 where stocks slumped 45%.

Of course, 1973 was the year I finished graduate school and got my first real job--I joined VISTA, the earlier incarnation of Americorps, and set out to save the world while earning $200 a month (and getting food stamps!). Being poor was noble, I had no savings, and nothing going on in the stock market really affected my personal life. If there was an internet, I had no knowledge of it.

The leveraged buyout bust (and subsequent 36% drop in the stock market) occurred in 1987. Where was I? Not saving for retirement, that's for certain. I was deep into motherhood, caring for a seriously disturbed child (with all the attendent psychiatric bills) and merrily charging up my credit cards. I vaguely knew there was a crisis out there, but, again, it didn't seem to affect my personal life.

Then there was the tech collapse of 2000-2002 during which stocks dipped 38%. I heard about that one, but I wasn't invested in tech stocks. In fact, I had just started serious retirement savings and was sticking close to index mutual funds. I got quarterly statements, but had no easy way to check on my 401(k) balances daily.

Then came 2007-2008. Suddenly, I'm worried about retirement, blogging intently, and really, really paying attention to the stock market and my personal expenses.

I need to remind myself that the cyclical return on stocks will occur whether or not I'm watching, and that what goes down, will (assuming the historical record is correct) eventually go back up.

Monday, November 17, 2008

Sticking with the Program

It gets harder and harder to just keep putting $1025 into my rapidly-dwindling 401(k) each month.

Intellectually, I understand that this is exactly the program I must maintain throughout our recession.

Emotionally, not so much.

But it helps to have Money Magazine on my side. In particular, I liked this response from senior writer, Janice Revell to a question by a similarly concerned reader. It helps to know that "in scary markets you tend to underestimate the risk of being out of stocks. In the long run - and that's what you care about - the risk of missing the upside poses a graver threat to your wealth than taking hits on the downside does."

Elsewhere in the December issue (but not online that I can find), the "Mole" (a regular columnist) writes, "Risk tolerance ebbs and flows. From 2003 to 2007, U.S. stock prices nearly doubled and international shares nearly tripled. During such good years, you tend to believe that you have a high tolerance for risk. At times like these [i.e. the current stomach-churning market], your willingness to take chances drops sharply."

No kidding!

I am squarely in the crowd these articles are addressing--I always thought I had a high tolerance. And for the time being, I'm hanging in there. But it's hard to keep the emotions out of the program.

Sunday, November 16, 2008

Age 89? I Could Live With That!

Thanks to Meg at World of Wealth, I took this calculator to see what my current activities portend for my lifespan.

Their answer is that I should live to age 89. Sounds good to me!

The good news is that I was scrupulously honest in answering the questions even though it meant admitting that I'm a couch potato who snacks far too much. (Maybe I should have stayed in Japan longer, where veggies and fish are always available but Snickers bars are harder to find.)

After getting the calculator results, there is a link to suggestions for changes that could lead to a longer life. One suggestion surprised me--it said that taking iron supplements (which I do, both to prevent pica which I've had in the past and because my doctor keeps telling me my bloodtests show low iron) actually lowers one's lifespan. Something to ask my doctor about on my next visit.

Friday, November 14, 2008

Out of the Ashes


Not that I recommend burning down one's garage as a way to make money (and such an action might provoke a pesky arson charge!) but. . .

I came home to a huge stack of mail. Midway through it was a statement from my insurance company AND a check. Now, understand that the company that rehabbed my garage also did an inventory, as best they could, of all the burned items they tossed in the dumpster. They got everything I could remember and a lot that I had forgotten. I was asked to price the items, which I did for those things I had either recently purchased or could remember. But with so much of it, like my deceased parents' 70's era furniture, I had no clue. So the company told me to leave those items blank and they would figure it out.

Boy, did they!

While I would happily have accepted a couple thousand dollars for everything, they paid me replacement (as opposed to actual cash value) costs, which came to an amazing $9000.

Again, WOW!

After I recovered from my shock, and got that baby deposited, I figured out where it was all going:

$2000 to two of my daughters who lost their items.
(That should teach them NOT to store their stuff at
Mommy's house);

$800 to bring my "baby steps" emergency fund up to
$1000, where it has not been since April;

$1600 to pay the property taxes on my rental house
at the coast; This will be the first time in years
that I am current on those taxes and will get the 3%
discount for paying it all off in a timely manner;

$2000 for Christmas. This is a large amount, but
I am the chief provider of presents for five daughters,
six grandchildren, two spouses and one sister, as well
as the one who buys the Christmas dinner, lights, trees,
etc.; and

$600 for heating oil--I am determined that this will be
the year I do NOT run the tank dry and incur repair
charges for clogging the lines.

So that leaves me $2000 to apply to debt.

Not to mention that my neighbor is now renting my garage from me, and providing me with an additional $250 a month in income.

Pretty good, huh?

Umm--I think you should put those matches down, NOW!

Thursday, November 13, 2008

Sayonara Japan

Tokyo is our last stop--we spent five days there, but that included one side trip to Kamakura and another to Nikko.

Both Kamakura and Nikko are small tourist towns. Both were filled with Japanese tourists busy sight-seeing in their own country.

Kamakura is home to Daibutsu, otherwise known as the Great Buddha, and probably one of Japan's more famous images. It is every bit as awe-inspiring as its picture. What you don't see is that the bronze statue is hollow and can be entered, which, of course, we did. This buddha is somewhat smaller than the one at Todaiji, but because it is now outdoors (it's hall having burned down, as many wooden temples and buildings have, in Japan), it is the more breathtaking Buddha.

Nikko has many culturally significant shrines, both Buddhist and Shinto, all within a relatively small area that is easily walked (although, like many temples in Japan, they all seemed to be at the top of enormous stone staircases with no railings!). A number of families were at the Shinto shrines getting blessings for their three year old daughters. The little girls were made up like beauty pageant contestants with sprayed hair, make-up, and elaborate kimonos. But they were obviously three years old, running around and kicking their shoes off. They were having a great time posing for pictures, particularly for western tourists. Other school groups would accost me (but never my ethnically Japanese traveling companion) with little booklets containing questions with which to practice their English. "My name is Kosumi. May I ask you some questions, please? Do you like Nikko? Do you like Japan?" Of course they were so busy practicing for the next question that they didn't listen to my answers!

Tokyo is the New York of Japan--loud, lively, full of advertising. Sights are less important than people-watching. And the people-watching was great.

So what were my final impressions?

On the surface, the Japanese are wonderfully polite, their country is famously safe and clean, and they have assimilated much of western culture. But they remain inscrutably alien, which makes for a fascinating tourist experience.

What I learned that I didn't know--the Japanese drive on the left side of the road, like the British; their western toilets, whether in private homes or hotels or ryokans have heated seats, bidet functions, and will play sounds (rushing rivers or music) while being used; virtually every car has a GPS system, which in addressed-challenged Japan, has been very useful (some neighborhoods have houses or buildings numbered by the order in which they were built); and being treated with great courtesy everywhere makes one, in turn, more courteous. It just felt good being in Japan, which I attribute to the high level of politeness, whether or not it was genuine.

Financially, I made out like a bandit. I spent less than my budgeted $2000, due entirely to housing and meals provided by my friend's relatives. While Japan can be expensive (first-run movies are $18!), meals weren't, and splitting the hotel costs (which ran from $50 per person per night to close to $100 but often included dinner and breakfast) helped keep costs down.

I did wind up spending about $200 to buy Yukatas (Japanese cotton bathrobes) for all my kids.

I am so glad I went, even if it wasn't the most budget-conscious decision. I don't know when or if I'll get to the far east again, but even if I do, it is unlikely to have the same opportunities to be in local homes that this trip afforded me.