I am rereading The Millionaire Next Door by Thomas Stanley and William Danko and am enjoying the many pearls of wisdom provided in this easy read. Stanley and Danko, who are both PhDs, did extensive research on millionaires a few decades ago and their surprising findings are presented in detail. I remember when I first read the book, my husband was just starting his medical practice. I wanted to make sure that we did not fall prey to the mistakes that “Dr. South” was making in the book. Almost 19 years later, I can say that we followed the principles of “Doctor North” in the book and have successfully built wealth such that we can fund our son’s 4 year private college education and retire comfortably today if we desired.
The stock market has advanced sharply this year. Can we expect more of the same in 2014?
Invariably, investors expect recent trends to persist indefinitely. Psychologically, we have a very hard time moving against what has worked well for us lately. Similar to a gambler at a craps table, when we watch our stack of chips increase quickly, we get sucked into the momentum and are reluctant to take some money off the table.
If you are over 70 1/2 and have retirement accounts or you have an inherited IRA, you will likely need to take RMDs, or Required Minimum Distributions, by the end of the year. Failure to do so would result in a penalty of 50% of the amount not taken.
Did you happen to see some of the videos that captured the crazed shopping frenzy that took place Thanksgiving and Black Friday? If not, here is a link to some eye-opening videos. As I watched these clips, I became disappointed in how the Christmas holiday has changed over the years. Instead of spending quiet time with loved ones, we are fighting with fellow shoppers over discounted items that we probably don’t need and cannot afford.
When it comes to driving retirement decisions, women often take a back seat.
Why is this? It appears that women tend to be intimidated by all things financial. Many believe they lack the appropriate knowledge or skill to make investment and financial planning decisions, so they either delay these important decisions or delegate them to the men in their lives— whether it is a spouse, family member, or financial advisor.
The Baby Boomer Burnout epidemic continues. Workplace stress seems to be the common complaint for most of my clients who are anxious to trade in their daily workplace grind for the rosier picture of an unstructured day with a late wakeup call. They are anxious to replace the actuality of stress-filled days with the idealistic vision of a lifestyle punctuated by travel, hobbies, and relaxation.
Indeed, the post financial crisis put pressure on companies to maximize profits. Employees that weren’t fired were given far more tasks and responsibilities. They were told to do more with less. The growing work load was not always rewarded with higher pay. The end result is that many individuals in their 60s and even early 50s are anxious to call it quits.