Archives for Money

Want to Be Independent Later On? Elder Wisdom Says: Save Now!

It’s a pleasure to share a guest blog by our third summer intern, Zoe Eisenberg. Zoe is a sophomore financial independenceat Ithaca College. She is majoring in gerontology and plans to minor in Legal Studies. Zoe was excited to learn from the elders themselves through the Legacy Project’s in-depth interviews. This lesson about the role of financial planning in maintaining independence throughout life came from Richard, age 68.

Here’s Zoe’s post:

Independence is a value held dearly by many, and it is something that we often express without thinking twice. During my interview with Richard, the importance of independence in his life stood out as a recurring theme and valuable lesson.

Richard grew up in an environment that encouraged independence. His father died at a young age, and within his small family he was expected to be responsible for himself. As a young man, he traveled extensively while serving in the army and working in the computer industry. Though Richard was married briefly, he never had children and he pointed to this as one of the reasons he continued to lead such an independent life throughout middle age.

When reflecting on the choices that have allowed him to maintain his independent lifestyle, Richard emphasized the importance of saving financially for one’s future:

That’s why it’s important to think about your future, and think about money, and think about saving. Don’t get into debt, save for your retirement at an early age. I wish I would have known that. I didn’t really start until I was in my 50’s, you should start when you’re in your 20’s.

 

If I had done it at 20, I’d be a millionaire. I did it at 50 so I’m a “thousandaire.” It’s a huge difference. And you don’t know when your life is going to be over – Plan for the longest time. Start saving! And then do things you want to do.

Today, Richard is adapting to new levels of interdependence as he manages health challenges that have limited his mobility. However, his determination to be self-sufficient to the greatest extent possible is fueling his recovery and adaptation to changing circumstances. Valuing independence continues to serve Richard well – and careful financial planning is one way to do it.

Money Advice from the Wisest Americans

Some of the most common New Year’s resolutions have to do with money: saving more, making more, spending less, andelder advice money so on. America’s elders, however, urge you to take a broader view of money and what it means in your life. The “experts on living” in the Legacy Project have some excellent advice on the topic.

And I didn’t even have to write it up for this blog post! Because the highly talented financial journalist Morgan Housel at Motley Fool wrote an excellent article (10 Money Lessons from Elderly Americans Who Have Seen It All), based on my book 30 Lessons for Living. Take a look – it will help you think “outside of the box” about money issues over the coming year.

Accumulating Stuff is of Little Importance

First, let me say that I love the holiday season. But, as Christmas approaches and we are inundated with advertisements and messages to spend wildly, it’s worth taking a break for elder wisdom. In the Legacy Project, over and over the elders told us that people and experiences matter more than things. In hundreds of interviews, they unanimously caution that time spent getting a lot more stuff than you really need is time wasted. The holidays seem like the right time to listen to our elders and think twice about how much we buy.

Steve, 78, tells how he learned to put material rewards in perspective, focusing instead on the accumulation of love for family and friends. As I’m planning my Christmas shopping, I try to keep his lesson in my head!

We were among the very lucky ones. Both my wife and I were born into middle class merchant families, with caring parents in small communities where you knew and were known by your neighbors. My wife lost her father when she was only 13. She, her mother and sister moved to another, beautiful small community where life was comfortable though not luxurous and values for the young were set by the example of parent and community. My childhood with loving parents and an older brother was uncomplicated and also filled with good values set by example. Owning and accumulating was not an important part of life for either of our families.

This upbringing undoubtedly established most of our values and attitudes for the adult years. Honesty, integrity and compassion for ones fellow human beings remained the anchor for all decisions. As we matured, reared and educated four children and attempted to pass along those values to them, we learned that listening is far more important than lectures, and though it sometimes seemed we were not heard, the example of our lives spoke loudly to our youngsters.

Now, at 71 and 78, as we progress through our senior years, living comfortably — not luxurously — we are increasingly aware that accumulating STUFF is of little importance. The accumulation of love for each other, of our children and of life-long friends and extending that love to those less fortunate than we have been is the centerpiece of our lives, of humanity and civilization.

Sensible Lessons about Money

Sometimes I find myself thinking: Whatever happened to good sense? When it comes to money, the elders offer advice that is, well, sensible. They came from a generation of savers, re-users, and careful consumers. Here’s 91-year old Betty’s advice for financial well-being:

You need a checking account and a savings account. Take each paycheck to the bank and deposit, don’t cash it. Hold out enough for cash purchases, groceries, etc.  Leave enough in the checking account to pay current bills. Whenever possible, put a little in the savings account. This is your emergency fund for unexpected expenses and a start toward your savings.

Be wary of credit cards. Never use one unless you can pay the bill in full at the end of the month. The interest can be devastating to your finances.

Aim toward home ownership. Rent is a constant drain with nothing to show for it.

For major purchases, save first and pay cash. This goes for cars and it can be done.  As soon as I’ve bought a car, I start saving (in the savings account) for the next. Making payments adds much more to the cost. That money can be yours to use.

When you have your finances organized and are keeping out of debt you are ready for the next step. Start your life savings. It is all right to start small but you can’t start too soon. Locate a full service brokerage firm and appointment with a financial adviser, who will listen to your needs and advise accordingly. Medium risk stock will likely serve you best. Later you can use the dividends for extra income. If you keep increasing your stock portfolio, it will provide financial security for retirement. Never buy stock from a small outfit that only deals with a limited type of stock or on advice of an individual.

Sensible Elder Lessons about Money

Sometimes I find myself thinking: Whatever happened to good sense? When it comes to money, the elders offer advice that is, well, sensible. They came from a generation of savers, re-users, and careful consumers. Here’s 91-year old Betty’s advice for financial well-being:

You need a checking account and a savings account. Take each paycheck to the bank and deposit, don’t cash it. Hold out enough for cash purchases, groceries, etc.  Leave enough in the checking account to pay current bills. Whenever possible, put a little in the savings account. This is your emergency fund for unexpected expenses and a start toward your savings.

Be wary of credit cards. Never use one unless you can pay the bill in full at the end of the month. The interest can be devastating to your finances.

Aim toward home ownership. Rent is a constant drain with nothing to show for it.

For major purchases, save first and pay cash. This goes for cars and it can be done.  As soon as I’ve bought a car, I start saving (in the savings account) for the next. Making payments adds much more to the cost. That money can be yours to use.

When you have your finances organized and are keeping out of debt you are ready for the next step. Start your life savings. It is all right to start small but you can’t start too soon. Locate a full service brokerage firm and appointment with a financial adviser, who will listen to your needs and advise accordingly. Medium risk stock will likely serve you best. Later you can use the dividends for extra income. If you keep increasing your stock portfolio, it will provide financial security for retirement. Never buy stock from a small outfit that only deals with a limited type of stock or on advice of an individual.

Putting Money in Perspective

Many of the elders grew up in the Great Depression, and they knew what it was like to live on almost nothing. But there was something else they learned: you could be very happy with almost nothing if you had a loving family, a supportive neighborhood, and you weren’t competing with a lot of other people who had more than you did.

Maybe this is why so many of the life lessons of the elders had to do with not over-valuing material things. They don’t want us all to be starving artists, but they want you not to be ruled by possessions or an overwhelming urge to make money.

Ed, 76, a retired engineer, told me:

You don’t want your things to own you. The best example that I can give you is my mother and father. Their house was their idol. All the stuff in it was pristine and laid out and my mother saved every book she ever read, every lesson plan, everything she’d ever done, and the house was chock full of all kinds of stuff. Some really good stuff, but, after my father died we took a few things and all the rest went into the dumpster. All that worry, all that thought. And it’s hard to shake. You look at all the stuff and think ‘all this crap owns me, I’m a prisoner of it.’ There’s a lesson in this that I hoped I’ve learned while I’m still alive. I’m not owned by expensive things because they’re expensive.

Micah, 77, stressed not choosing work just for the paycheck:

That was always the way people that measured a success when we were young. Some people went to college but most people went to work. They got a job and went to work, and everything revolved around ‘what are you earning? what are you making?’ and stuff like that. So  the more money you made the more successful you were. And that became of more importance than ‘what should I do with my life? what do you want to develop? what do you want to learn?’ But by learning and experiencing that part of your life, you’re going to be doing something you like doing, you want to do, and money follows. Money follows.

That’s the way it works. And if money doesn’t follow, you’re doing something you like anyway. When I was a kid, down the street we had a shoemaker. He was a father with his kids and they all did the shoes, leather soles and stuff, and they were a pretty cool family. They loved working there. They were making shoes and fixing shoes. So there’s ways to be happy without having to be this big shot corporate guy.

Good Thought for the Season: Being Happy In Spite of Hard Times

As we prepare for the holidays, many families are worried about their financial situations. Perhaps we can take some reassurance from the elders in the Legacy Project who experienced real hardship in the Great Depression.

Among adults, the Great Depression caused the disruption of professional and personal life and led to immense stress and uncertainty. For the Legacy Project elders – who were children or teenagers at the time – a somewhat different picture emerges. With few better off to whom they could compare themselves, and without high expectations of material excess, they simply learned to have a good time with what they had. This can be a powerful first lesson for how to be happy in spite of difficult financial times.

For example, two elders told us:

I grew up during the Depression, but I didn’t know I was poor because we had our own garden, our own car, our own chickens- everything that we had, we produced. I learned also to try to be happy – you went dancing, you went to baseball games, and most of it didn’t cost much. (Evelyn, 91)

I would say that our generation came from a more impoverished society, so our expectations weren’t that great like you guys are. You people grew up with computers and everything else, but we didn’t. So we didn’t expect it. We have it now, but if I lost it tomorrow morning it wouldn’t bother me, I’ve lived most of my life without it. (Phillip, 87)

I also think of Jennifer, 85 years old, with such good health that she traveled last year to Germany, Canada, and Alaska. She is an active volunteer and participates in continuing education programs. When approached by us, she quipped: “’Advice about life’ for younger generations in your letter surely opens the gates for us oldies!”

Her life’s lessons clearly represent the “happy in spite of” mentality:

In spite of growing up and attending college in the Depression years, the “good life” for me began in earliest childhood when I was raised in a loving and encouraging family and enriched by many inspiring role models. Then, fortunately, our marriage was a happy and rewarding one that enabled us to meet ups and downs together. For both of us, gratitude and giving thanks to our parents and others along the way was simply a way of life. I am not sure the importance of a simple “Thank you” or caring gesture is stressed enough today. We likely became more conscious of this as our family grew, and greatly appreciate seeing this attribute in our grandchildren and their young children.

It may sound like old-fashioned advice, but a focus on “gratitude and giving thanks” may help all of us this holiday! And if you have wisdom to share about the holidays, please post it here!

Older Americans, Debt, and the Election

In this election season, political commentators are busily debating why different American subgroups vote the way they do. This year, they’re paying increasing attention to older Americans, largely because the elderly are more likely to vote than young people.

I’d like to shed light on what concerns older Americans in this election cycle, but I solemnly swear that I will not mention polling numbers. Instead, my analysis is based on surveys we have conducted with over 1,200 older people on their core beliefs and values, and the kinds of advice they have for future generations (described in my book on the topic). I make the following disclaimer: My comments are not partisan — any party that finds them useful is welcome to them!

In hundreds of interviews with America’s elders, I learned that there is one thing about which they have strong – sometimes visceral – feelings. It makes them deeply uneasy, even afraid. And contemporary attitudes about it are staggering to many of them.

For the oldest Americans, the real four-letter word is debt.

Where does this fear come from? It stems in part from the Great Depression. They saw people lose their livelihoods and their homes, making them aware of how tenuous financial security is. They saw what happened to people who couldn’t pay their bills, and it instilled in them a frugal mentality. Even 70-year-olds, born after the Depression officially ended, were affected by the experiences of their often traumatized parents.

For this reason, we heard one clear message from the elders: Live within your means. What separates seniors from the baby boomers and later generations is a debt-avoiding mentality: If you can’t pay for it now, don’t buy it. Older people are natural recyclers, repairers, and re-users. For example, for many “recycling” gift wrap means opening it carefully and saving it for a future present (and the same holds true for tin foil and plastic wrap).

How deeply ingrained is this mentality? Here are a few examples from the elders we talked to.

Evette, 83:

What should young people avoid? Debt! They’ve got to have the instant gratification thing. I struggle with my granddaughter about it all the time because she doesn’t have the patience. She’ll get way in debt for something she’s gotta have and I keep saying: “You’re not ready for this; you don’t have a good down payment.” And also, I want her to have a cushion because sometimes it takes a while in between jobs, and she’s just not prepared to do that. She’s just like; “Well I know I’m going to have this job always.” Well, my first husband; in ten years of marriage, he had thirteen different jobs. And we had three small children and it was very nerve-wracking.

Pru, 75:

One of the things that I would tell any young person was save a little money every week for yourself. Make sure those few dollars a week are put away because that compounds and at the end of fifty years you’re going to have a nice nest egg if you pay yourself first. We have granddaughters that are paying off student loans that are just out of sight. They both worked as waitresses and if they had put aside a few dollars a week for themselves, they might not be struggling so much.

Florence, 91

For major purchases, save first and pay cash. This goes for cars and it can be done. As soon as I’ve bought a car, I start saving (in the savings account) for the next. Making payments adds much more to the cost. That money can be yours to use.

We learned that older Americans are baffled by America’s debt culture, and when the housing bubble burst, they could easily have said to us: “I told you so.” On the issue of the federal deficit, the personal and political are mixed: the abhorrence of being deeply in debt extends from their own financial lives to anxiety about our national debt. And we heard this response from most of the elders we interviewed, whether their party affiliation was Democrat, Republican, Libertarian, or Green.

Therefore, the advice to any politician or party that wants to appeal to the 70-and-over set is this: Convince them that you really care about the debt we’re in, and give them reasonable and detailed plans for dealing with it.

Older Americans are sometimes accused of hoarding societal resources (like Social Security). But remember, these are people who know how to sacrifice – just ask someone who held her family together during World War II, or was a child during the Depression. Our interviews suggest that they would be willing to sacrifice again, if they truly believe it will reduce the national debt.

Someone should offer them a deficit-reduction plan they understand and can support. I predict they would cross party lines to do so.

Advice for Graduates: From the Wisest Americans

We looked over our surveys of over 1200 of the oldest Americans, to see what advice they would offer new graduates hitting the job market. This month’s grads hit one of the worst job market in 100 years – so why not ask the advice of those folks who started looking for work in the worst job market (in the aftermath of the Great Depression)? Journalist Catey Hill summed up the advice nicely for the new website Next Avenue.

Here are the wisest Americans’ five lessons for having a fulfilling career and advice from experts on how to implement them effectively:

1. Say “yes”: This was the biggest message Pillemer heard over and over again. “People who passed up promotions, or opportunities to do things like work abroad, or who didn’t apply for a job because they thought they were underqualified said that not saying “yes” was their No. 1 career regret,” notes Pillemer. 

For Boomers with grown children, it may be easier than ever to say “yes.” Lower expenses may make it easier to finally take a chance on a less lucrative career or to move to another city for work, if necessary.

“Often there are a lot more opportunities to say ‘yes’ once the kids are out of the house,” says Lisa Adams, founder of the career-transition firm Fresh Air Careers. “You can finally take a chance on a less lucrative career or something you’ve really wanted to try.”

How to make it happen:  One obstacle people face in getting to “yes” is that they view a new job or opportunity as permanent, which makes them more risk averse, says Michael Jeans, president of New Directions, a career transition consulting firm. Instead, look at the offer as an adventure for the next two years or so.  

You may be tempted to say “no” because of a fear that you won’t like the new job – or that you won’t have the necessary skill set to be good at it. To combat this response, “do a 360-degree assessment of the opportunity,” says Lavie Margolin, a career coach whose firm is called Lion Cub Job Search. Ask the employer for details on what the job entails, then make a list of the positives and negatives, noting how well-aligned your interests and skills are to each job task, Margolin says. Once you’ve made this assessment, you can make a more informed decision and you might want to quickly bolster any skills you’re lacking.

2. Figure out what kind of job would make you happy – even if it means taking a pay cut: “This group overwhelmingly said that intrinsic rewards were much more important than financial ones,” Pillemer says.  

How to make it happen: Take a career personality test to figure out what kind of job might make you happy, Margolin says. This type of test, offered by many colleges and career-counseling centers, lets you assess your interests and skills then match them to potential careers.

It’s also important to make a list of the things that have made you happy (these could be hobbies, social interactions or work tasks) and create a list of jobs that could let you do them. Then “talk to people who do the job you think you want,” Jeans says. “Ask them what they do all day and what the challenges are in their jobs.” If possible, give the field you’re interested in a test drive, Margolin says. “Take an adult internship or volunteer with an organization where you can try to do what you want and see how you like it.”

3. Make the most of a bad job: Even if you’re toiling in a job you hate and feel you can’t leave it, do whatever you can to turn it into a learning experience. In his book, Pillemer says you should modify the Stephen Stills song lyric “And if you can’t be with the one you love, honey, love the one you’re with” to “And if you can’t have the job you love, honey, find something worthwhile about the one you’re in.”

How to make it happen: Identify the factors about the job that are making you the most unhappy, says career expert Julie Redfield, of PA Consulting Group. It might just be a single factor – like a long commute or disagreeable coworker – that could be easily remedied. Talk to your boss or the person contributing to your unhappiness to see if something could be done. Maybe you could work remotely a few days a week to avoid the commute. Or you could move desks to be farther away from the disagreeable co-worker.

If your boss is making you nuts, try to have a candid conversation with him or her. Don’t become accusatory or try to change the boss’ management style, but do see if the two of you can come up with ways to improve your working relationship.

If you can’t change what’s making you hate the job, try to gain new skills that will help you transition to a different job with the same employer, Jeans says. This could mean anything from helping out another department in your spare time to taking advantage of your employer’s college tuition reimbursement programs, he says.

4. Improve your people skills: You may be the most talented engineer or the most exacting architect, but you won’t get as far as you want without the ability to work well with people, Pillemer says. “Older Americans overwhelmingly said that emotional intelligence trumps every other type.” Getting along better with others at work will also make your job less stressful and more enjoyable.

How to make it happen: “Don’t just be an interesting person, be interested in other people,” Jeans says. To do this, ask people questions about how their day is going or offer to help them with projects. “You can start small,” Margolin says. “Tell yourself to ask one person one question about himself or herself per day.”

It’s also important to stay even-keeled and temper your criticism. “Before you speak, take 10 seconds to think about how what you’re going to say might impact the person, he says. “If you feel yourself ready to blow up, excuse yourself to take a bathroom break.” Similarly, before sending an email, reread it to make sure the tone isn’t accusatory or mean. You might even have a trusted coworker look over it.

5. Look for work with autonomy: “Career satisfaction has a lot more to do with how much autonomy and freedom you have than how much money you make,” Pillemer says. “You need the freedom to make your own decisions.”

How to make it happen: Find ways to get better at what you do at work. “If you excel at your job, your boss is most likely going to get off your back,” Jeans says. Try to get regular feedback from your boss, so you can then do what’s necessary to improve. You might also try to talk with a superior about establish approaches to work that might allow for less intervention – or at least reduce the need for it.

Certain careers – typically ones that are specialized and require more education – tend to be more autonomous, Margolin says. If you have a job like psychologist, social worker, counselor, financial adviser or graphic designer, you’re the expert, so people don’t meddle as much.

Your years of experience can help you sculpt an autonomous job by leveraging your experience into a consulting gig. Tap your professional network via LinkedIn or flip through those business cards to get started) or check out the Small Business Administration’s start-up guide online.

Next Avenue: 5 Career Lessons From the Wisest Americans

Want to Avoid Regret? Stay Out of Debt!

The news tells us that Americans are finallly getting more cautious about getting into debt. Our elders, many of whom lived through the Great Depression, think it’s about time! One of their strongest lessons is to save up the money before you buy something – or your may regret it.

Here’s what some of the elders interviewed for 30 Lessons for Living told me:

What should young people avoid? Credit card debt. They’ve got to have the instant gratification thing. I struggle with my granddaughter about it all the time because she doesn’t have the patience. She’ll get way in debt for something she’s gotta have and I keep saying: “You’re not ready for this, you don’t have a good down payment.” And also, I want her to have a cushion because sometimes it takes a while in between jobs, and she’s just not prepared to do that. She’s just like; “Well I know I’m going to have this job always.” Well, my first husband; in ten years of marriage, he had thirteen different jobs. And we had three small children and it was very nerve-wracking. (Evette, 83)

One of the things that I would tell any young person was save a little money every week for yourself. Make sure those few dollars a week are put away because that compounds and at the end of fifty years you’re going to have a nice nest egg if you pay yourself first. We have granddaughters that are paying off student loans that are just out of sight. They both worked as waitresses and if they had put aside a few dollars a week for themselves, they might not be struggling so much. (Pru, 75)

Unfortunately, I never had the money to save when I was in my twenties. That’s what I say to my kids now. I say that I wish I could have started saving when I was their age, when they’re in their twenties and like that. If you’ve saved money, like I stress that younger people should do, and then you can really relax when you get older and retire and enjoy life and like that. And think about having your house all paid for, and sit back and enjoy your hobbies and do volunteer work when you get older, and enjoy your grandchildren and travel. But if you’ve saved money and like that, you can do that and not have to keep working. (Flora, 71).

Worth taking a look at before you pull out those credit cards!