Amanda's Take Five For Wednesday

Personal Finance

A Nobel cause; A very clucky Christmas; It's a long life, plan for it!; The salary substitution approach to saving; Finishing what you start

5th Dec 12, 8:27am by Amanda Morrall

By Amanda Morrall

1) A Nobel Cause

For the first time since 1949, the Nobel Foundation has been forced to cut back on its prize giving largess. Winners of the prestigious award saw their cash envelopes cut by 20% because even the foundation has been hit by hard times. To remedy the problem, the foundation's money managers are turning to hedge funds in hopes of generating higher returns to restore the prizes to their former lustre. Bloomberg reports on the fund's diminished returns over the decade and their plan to chase higher returns.

2) A clucky X-mas

For those of you boycotting the consumer blow-out this season and looking for a more charitable experience instead, Oxfam's livestock gift certificates may be the way to go.

3) Salary substitution

Retirement planning can be scary stuff, especially when you plug the numbers into the calculator and you discover you need to save up a million in 10 years. Rather than get overwhelmed to the point of paralysis with the big number approach, Monevator (the U.K. investment blogger) proposes you use your annual salary as a way to target savings more strategically. Read more about his method here.

4) It's a long life

Knowing how much you'll need in retirement hinges on one great big unknown: your date of expiration? Motley Fool's Robert Brokamp explores this dilemma and comes to the conclusion that it's better by far to plan for a long, long life rather than be left short.

Now vs. tomorrow

Financial planning is always a balance (nay, compromise) between living for today and preparing for the future – even if that future may not occur. Saving for retirement or college, buying insurance, avoiding or incurring debt even for “investments” such as an education or home – whether you’re doing the right thing is never certain. The best we can do is make prudent assumptions and have a Plan B ready in case the assumptions turn out to be wrong. As for how long you’ll live, you can fiddle with this longevity calculator. It can’t predict your date of death, but it’s interesting to see which factors increase or decrease projected lifespan. Finally, I’ll leave you to ponder this quote from Mohandas Gandhi: “Live as if you were to die tomorrow. Learn as if you were to live forever.”

5) Finish what you start

One of my sons has been studying piano for four years or so now. Long enough that he's quite good so it was somewhat startling to hear him declare that he's going to quit. I'm no where near a Tiger mum but did gently explain the importance of finishing what you start and did my best to explain the investment side of his efforts and talent thus far. Here's more from Get Rich Slowly on the importance of the follow through in personal finance - and in life.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall or at www.amandamorrall.com

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

23 Comments

by StanGoodvibes | 5th Dec 12, 12:18pm 1354663132

#5 my parents forced us as kids to learn the piano, and we hated it! I was finally allowed to quit when I reached 13 and promptly did, having attained Grade 5. I don't regret either having to do the lessons or quitting, and in the back of my mind I have it down as something to pick up again to keep my mind active when I get to that age where I don't need to actually work full time and live somewhere long enough to own a piano!

So, quitting is often not such the big deal we (or our parents) make it out to be, Sometimes it's worth quitting something to achieve something more worthwhile - for instance you may wish to buy your son a set of decks and get him some rudimentary lessons on mixing, as being an International DJ is waaaay cooler than being an international pianist!

To extrapolate this to a financial scenario - maybe sometimes it's worth sacrificing some of your financial goals (albeit temporarily) to go off and do something that enriches your life in other ways. For example, Steve Jobs left his early potentially lucrative employment to go do loads of LSD in India, and in his autobiography described it as one of the best things he ever did.

by ngakonui gold | 5th Dec 12, 12:35pm 1354664124

the same happened in my family ,the only difference being that me and my brother both gave up and my sister kept going and ending up playing in bands etc.

She put a deposit on her first house from money she earnt from playing the piano.

My brother and i took up drinking ,smoking and being men by playing rugby.

Oh what eggs we were.

If only . to late.

by Christov | 5th Dec 12, 1:16pm 1354666615

So what do you do..?

I play records man..I switch it up , you know, scratch it out get it pumpin..

Oh....so do you play anything , sing or whatever..?

Hey dude itchy scratchie is like art , it's fusin beats n poppin loops..!

So you don't play any instruments at all really then..? like you couldn't just bust out on the beach at a bonfire or see a piano and say well ok then...?

I guess not.....er, but ah....

yeah yeah nice talking to ya.

Hey Amanda , what your son is doing is not unusual at all . Sometimes it's more about what is relevant in his world in relation to what he is learning , piano and otherwise.

If he's anywhere from say 10 to 14, he'll have started to notice other stuff, and just maybe can't really see where the study fits in to the groove cool so to speak.

Does he have any influences musically outside of classical pianists...?

Is he interested in switching instruments for say the guitar...?

Does he show any desire to compose ...even in rock or pop format...jazz or blues...?

Can he sing..?

Most music instruction in my experience ( and I used to teach) is far to laboured with theory and clinical precision, then you get someone like Jango Reinhart with three fingers blowing it out the window , or Ry Cooder proving that any tuning is possible once you have an application for it.

My point is I used to ask people what it was they thought they most wanted to do with music, and how did they percieve accomplishment.

So most of the time , I would get them playing as quickly as possible, teach them some songs they wanted to learn, interest them in song construction and how chords relate(demystify ) what many tutors seem deliberatley to either make hard or appear hard.

Some got to their happy and left it at that , some decided it wasn't as cool as they thought it might be, some went on to form bands either original or cover and still do the circut today.

If he has been taking lessons for four to five years , he should be showing some natual interest if ,..A. it is there to begin with..B or his tutors just never asked what he wanted to achieve...C. the music he currently relates to does not contain a lot of piano in it's construction....

But I would like you to remind him , there is no better instrument to write with and ideas transfer to and from piano extremely well.

Good luck and don't worry too much.....the live music industry is a very very hard game , the pay is peanuts, for the longest apprenticeship you will ever serve.

So I guess Stanley has a point about digression.

He'll find his way back , if it's really a means to express himself that he desires.

I would add we must never impose continuation of a study for vicarious reasons of our own.....the resentment embitters the music. ( hits a sour note)

by StanGoodvibes | 5th Dec 12, 1:55pm 1354668952

So I guess Stanley has a point about digression

Your effusive praise is encouraging. I might have been more amenable to learning to play an instrument if I was given a choice - say, drums, or guitar. At least the guitarist in the band gets all the chicks - we all know what happens to the keyboard player... Freddie Mercury, Elton John, Ray Charles etc... you end up either gay or blind. Is that the future you want for your son?

:-)

by Amanda Morrall | 5th Dec 12, 2:28pm 1354670880

A little gift for you:) cuz I like your posts (normally).

http://www.youtube.com/watch?v=34u_3Z9_LUw

http://www.youtube.com/watch?v=Wt5EHAqhR1c&feature=endscreen&NR=1

by StanGoodvibes | 5th Dec 12, 2:44pm 1354671876

um thanks, although your compliment was tempered somewhat by the (normally) at the end. I assume that means one or two of my posts have been a bit wide of the mark. I shall endeavour to be more circumspect in future.

I'll have to watch the youtube clips at home later - I had my performance appraisal the other day and despite praise for work and skills that could only be described as 'glowing', I lost brownie points for my attire bordering on the too casual in the office, along with excessive levels of personal youtube viewing and commenting on blog sites LOL.

Thank you though!

by Ralph | 5th Dec 12, 5:26pm 1354681574

Unless you wear board shorts or a bikini o the office I think people should be able to choose their own wardrobe.

by StanGoodvibes | 6th Dec 12, 12:09pm 1354748995

Oh, I didn't think boardies were a problem. I work in the back office - I never see clients or go to client meetings. In my current role we don't even have clients.

Yet we still have to wear business attire, except, magically for Friday, when it is somehow deemed to be OK to wear casual clothing like it's not really a week day somehow. We were wearing combat pants and trainers to work in the City (of London) back in the 90s FGS.

by Ralph | 6th Dec 12, 12:12pm 1354749164

Oh, I didn't think boardies were a problem.

Ahh, so it WAS the bikini then ..

by StanGoodvibes | 6th Dec 12, 12:32pm 1354750377

No no I wouldn't be that crass. It was a mankini

by StanGoodvibes | 6th Dec 12, 12:31pm 1354750316

Thanks Amanda. I listened to them this morning. Rockin the Suburbs was great and it's nice to see you picked up the slight anti-suburbia undercurrent in some of my posts ;-) Um not sure about Brick though, other than being a great song.

I kind of missed BFF, as by the mid 90's when they started getting airplay in NZ I had left behind my grunge period (Nirvana, Stone Temple Pilots, Tribe, Letters To Cleo) and landed in the UK just in time for the start of Britpop. Of course then I went on the have my very own Damascus Road conversion experience at Glastonbury 99, where I was enveloped in a cloud of ecstacy, a light shone down, and suddenly dance music made sense. I've never looked back since.

However, since we are jumping back to the 90's here's one of my favorites from one of the many fantastic Boston bands around at the time who, inexplicably, failed to become huge. Anyone who has played Rock Band on the PS3 will know it...

http://www.youtube.com/watch?v=VSVfEiswFWk

by Amanda Morrall | 6th Dec 12, 1:11pm 1354752663

No subliminal messages with Brick apart from showcasing the guy's talent. Neither blind nor gay.

I enjoyed Tribe. Ah, the '90s. A grand old time. Sounds like you've made the most of wherever you have found yourself, which is how it should be. Rock on! StanGoodVibes.

by StanGoodvibes | 6th Dec 12, 2:12pm 1354756376

Party on! Amanda.

It is kind of weird hearing teenagers like my niece going 'Who are Nirvana?", or someone describing something as Old School 90's music. It doesn't seem that long ago to me!

by Amanda Morrall | 5th Dec 12, 6:16pm 1354684560

Cristov, His father is a musician so yes he's been exposed to a wide range of music and is currently grooving on my grunge collection and hip hop. He's not been beaten by a metronom or any such tactics. I think the discipline and mental challenge is good for him, plus he shows a lot of talent without trying too hard for it. Anyway, I mostly use these personal anecdotes as creative entry points for what can by very dry financial information. Seems like it works. Thanks for your creative and colorful input.

by Christov | 6th Dec 12, 10:10am 1354741801

Cheers Amanda , grunge...! never would have picked it,love it myself , you name it I got it, just reading Dave Grohl's (FF) story at the mo , recommend it, a real survivor , with a great business head .....so as a business model a very hard man to beat...I.E. Chris Cornell (Sound Garden) equal in talent to say the least ,but lacks the business savy.

I don't go much on the mainstream hip hop but of course I think Marshal Mathers is prolly the most potent social comment writer since Dylan, so, got everything he's ever done along with some NWA and so forth.

Coming back to my point, relevance, if he's into some of the stuff your saying, then an instrument switch might just be the ticket .....after all it comes down to the need to express , convey emotively.

I still don't know his age but as he gets to ,uh well you know an age where he needs to flex a bit...........guitar, it ah, covers quite the spectrum.

by StanGoodvibes | 6th Dec 12, 11:50am 1354747806

Dave Grohl's credibility died the day Foo Fighters played at the IPhone 5 launch. A Bono-class sellout. They're dead to me.

by Christov | 6th Dec 12, 12:31pm 1354750293

Stan your being emotional....selling out is the idea.

Unless you wanna join the dead poets .....sellouts are just another way of saying everybody started getting into it for one reason or another...Pearl Jam , Tool ,Rage,Live, etc all became mainstream because the audience widened...just a fact of fashion.

I get what your on about , but there is no doubting Grohl's ability on any number of instruments , that boy just has ...it...in him.

Chris Cornell would like the sucess Grohl has enjoyed but still to this day can't get the reco he deserves.....go back to Soundgarden's Day I Tried to Live , still wows me even now.

Maybe there's more to the term Mainstream eh ...a bit like being watered down just so you can get in the money pool with some clean wholesome togs on.

Grohl's credibility is in his musicianship, whether Jimmy crack corn or not....I remember when he had nothing, I appreciate the effort not necessarily the direction.

Stay well.

Oh P.S. yeah Bono's a first class twat with average talent, but hey, he never let that get in the way.

by powerdownkiwi | 5th Dec 12, 2:29pm 1354670988

#1 - what irony.

If they put the 1926 Chemistry prize-winner on their Board, they might realise that hedge-funds are a negative pig too.

"Soddy wrote that financial debts grew exponentially at compound interest but the real economy was based on exhaustible stocks of fossil fuels. Energy obtained from the fossil fuels could not be used again. This criticism of economic growth is echoed by his intellectual heirs in the now emergent field of ecological economics".^[3]

Intellectual heirs eh?. well well well :)

by StanGoodvibes | 5th Dec 12, 2:59pm 1354672777

#1 I think you'll find that the Nobel Foundation is losing funding in direct proportion to how fast it ls losing credibility. A cursory Google search for Nobel Prize EU returns a sizeable resultset of news articles about laureates and politicians denouncing the decision to award the EU the peace prize, along with plenty of commentary about how a Nobel Prize doesn't have the same cachet that it used to.

In light of this I recently removed Item #73 Win the Nobel Peace Prize from my bucket list.

by Ralph | 5th Dec 12, 5:23pm 1354681406

I am pretty sure that if we lived as if we were to die tomorrow the idea of a bucket list would be quite redundant.

by StanGoodvibes | 6th Dec 12, 12:05pm 1354748718

well yes there would only be one item on it - #1 Plan funeral. I think the defintion of list stipulates >1 items.

The other problem with living as if this could be your last day on earth is that if we did so none of us would have a job and none of us would be planning for the future, financially or otherwise.

However I get your meaning and agree but I think the bucket list is more a reminder to do those things that you would do if you knew you only had a very short time left instead of the all-too-easy trap to fall into of putting off the fun/adventure stuff while you just get your career going, pay off the mortgage, buy an investment property, put something away for retirement...

by Ralph | 6th Dec 12, 12:11pm 1354749098

I just liked the juxtaposition of two of the prevailing common wisdoms.

by StanGoodvibes | 6th Dec 12, 2:08pm 1354756110

and um, what exactly would the justaposition be exactly?