By Amanda Morrall
Following a late start to my day today nursing a sick child, I stumbled into the office at precisely 11:11 am, just in time to see the website traffic numbers on our new billboard flash to 111. A few minutes earlier, driving into work, panicking over my tardiness, I gazed up at the digital clock on my car, (set five minutes early) which also flashed 11:11 a.m. If you believe the new age spiritualists, I've aligned myself with a portal to heaven (or hell).
I'm not sure what it all means but this edition of Take Five (for better or worse) can be construed as a financial wake up call. Not particularly cheery but a nudge along the path to a better place I hope.
A good weekend to you all.
1) Financial senility
More good news, not, about ageing. According to this blog from themillionairenurse.com financial senility starts to kick in around 60 and it's all down hill from there. I don't read much into research studies any more as invariably they're contradicted the next week by another study. Also, you can't make generalisations.
If Warren Buffett is losing his edge, (which I doubt) I'll blame it on the markets.
Still, there is something to be said for maintaining good health and fitness and staying intellectually spry (part and parcel of financiall well-being), a point said blogger attempts to make offering the following tips to stave off financial torpor and stupidity.
- Staying in good health helps your brain.
- Staying in good health means adequate sleep, good nutrition, and exercising regularly.
- Keeping mentally active helps you think. (TV is a brain-drain)
- To stay on top of your personal finances, you have to continue to learn (life long learning is one of my favourite alliterative phrases…).
- The older you are, the more your finances should be on auto-pilot, with index funds and age based investments that are annually rebalanced.
- You need a trusted adviser-and not that old geezer you’ve always used-he may be worse off cognitively than you are.
2) The perfect lifestyle
There's no such thing as perfect and yet lifestyle designers would have us believe otherwise. That's how they get rich, selling the dream of having it all.
I'm not so cynical as to believe that balance in life is not achievable, but tend to agree with this blogger from moneymamba.com that lifestyle designers present a bit like the Wizard of Oz; all powerful and knowing but really a bit fraudulent when you scratch the surface.
Pull back the curtain first before you buy everything they're selling and saying hook, link and sinker.
3) Wake up and save yourself
I despair for younger generations naive enough to believe 'she'll be right' and the government will save them at the end of day if they haven't done much to look after their own interests. The writing is on the wall that social securities programmes are fast coming to an end.
Is a sense of entitlement holding you back from saving yourself? Take this quiz on WiseBread.com
Having a mentor, as per the suggestion of "financialsamurai" is also a good idea.
4) Bye bye pork pensions
Okay, it's been an exceptionally volatile period. That much I'll admit. However, I'm increasingly worried about the security of public pensions. In truth I don't think they'll be anything of them when I retire.
It didn't help reading this piece in the Globe and Mail noting how the CPP (Canadian Pension Plan) has lost more than CND$1.2 billion in the last quarter alone.The investment board that runs the fund is casting about for opportunities outside the stock markets to level off the effects.
I was curious to know how the Canadian losses stacked up relative to the New Zealand Super Fund so decided to looked it up on their website.
Since June 30, 2011, the fund has lost double that amount; NZ$2.4 billion. Granted the fund was at all time high of NZ$19 billion end of June but NZ$2.4 billion? Ouch.
5) Your own worst enemy
It's often said that man's worst enemy is his mind. Based on years of personal research, I believe that to be true.
In the case of investors this old adage has proven correct time and time again with investors shifting in and out of markets at precisely the wrong time due to the heighten fear of losses.
2 Comments
"Lifestyle designer" - what does that even mean LOL?
Not covered today, but interesting for mortgage rates, came acorss this from Chicago Fed Bank President Charles Evans, who wants the Fed to "commit itself to keep short-term rates at zero until the unemployment rate falls below 7 percent or the outlook for medium term inflation goes above 3 percent."
If he gets his way real interest rates will stay negative for years!
The Sage of Omaha has added $US 25 billion in share equity purchases to Berkshire Hathaway's fund in the third quarter of this year ( to September 30 ) . This is the greatest amount of money that Warren Buffett has ever invested in a single quarter .
...... his largest plunge of new money into the market came the day after S&P downgraded the USA's credit rating .
Losing his touch , from old age ? ...... I think not , the sage has time on his side .
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