Like everyone who has written before me, I owe many thanks to Jonathan's writings and the many contributors who have helped me stay connected and informed as my own career in the finance industry ended upon retirement. Jonathan was simply too young to now be gone, but as we mostly know and accept, there is seldom a "good" time to depart. To his family: I grieve for your loss and thank you for sharing him with us for along as we had him.
I spent my career in the wealth management business, trying to get clients to develop and stick to a budget plan - with varying success! In retirement, I like you, do not work from a budget. However, I track closely how our investments perform and what our sources and amounts of income are. I've been retired 13 years and am comfortable with my approach. However, everyone's pain points are different and careful budgeting for some may be what helps them sleep.
I suppose the answer to this problem in part depends on how much you have to invest. Like you, I have been raising some cash over the last year as my confidence in the economy wanes. At age 77, I am reasonably certain that my wife and I have enough to last us the rest of our lives - absent some major economic or other catastrophe. I remain mindful, however, that one of us could live another 10-15 years and need extensive care at some point. I have also factored in that our son will likely receive a considerable amount from our unused IRA balances that he will be able to withdraw over a 10 year period. Given this time horizon, equities will need to remain an important part of our asset allocation in order to combat the effects of inflation.
I am curious that you didn't mention high yield bonds. Yes, they are positively correlated to equities, but if you are willing to buy them when they are cyclically cheap and sell when they begin to look a bit pricey, you can generate some capital gains, with a healthy current income stream.
I grew up in a family that had lived through the Depression and WWII, and the efforts they made to scrimp and get by were passed down. My wife and I have been determined savers our whole lives and are secure in our retirement. Our biggest problem is spending what we have while we are living and what to do with the rest when we are gone. Our savings efforts were successful in part because of determination, but more importantly because we also had the means to save. For too many families, good savings habits won't necessarily help much if the amount of their income is insufficient. This is in part an income and spending problem, but it is exacerbated by the lack employer retirement savings plans, especially in small businesses, that would help more people better prepare for their retirement years.
My wife and I have never had large numbers of credit cards, but over time we have whittled down the number to a bare minimum. Store and gas cards are not that important as most businesses also accept major credit cards. We don't have an airline card, nor a major credit card that earns travel points or other travel benefits. We also don't pay a fee for any credit card, no matter its color, and our current credit limit is far more than we'll ever need. Instead, we each carry one card on a shared credit account and payoff the balance due each month. We also use our cards for most of our purchases and carry very little cash. Finally, because we pay off our balance each month, our credit card company pays us a generous cash-back amount each month, paid for by other card holders who carry a balance.
A reminder of the old saying "Fools plan, but the future decides." Most planning tools are just that: tools. Tools are made to help us better identify possible future outcomes, but they are not crystal balls that can actually tell us what the future holds. As I often told clients who were seeking greater certainty "If I could read the future, I'd be rich and you'd be talking to my replacement." On a more practical level, we all need to understand that any plan only encompasses a moment in time and to remain effective, our plans need to be regularly updated to meet changing circumstances. Estate plans are not a one and done effort. Financial plans are even more volatile.
I worked in the investment biz and one year was a part of the employee benefits communications team for our company's 401K plan. While I generally knew that too many employees were too conservative in their investment choices, I was appalled when I spoke to individual employees about their plan choices. The number who were entirely invested in the cash option and their reasons why (safety) was revealing. Not only did many employees not understand the basic concept of the time value of money, our company had utterly failed to help its employees understand this concept in order to make better long term investment choices. Save early and save often are just the starting steps to successful investing. People also need to understand that a reasonable exposure is their only sure way of growing their savings on an inflation adjusted basis.
We miss you, and especially your thoughtful comments on investing. I hope your family is doing well as this form of cancer is both awful to have and awful to watch. Best regards, and thanks.
The investment biz is constantly in search of new "sizzle" to part dollars from unwary investors. I have come to the conclusion that much of the investment process is not all that hard. What is hard is not panicking when markets turn and having the discipline to start early and save often. There is nothing magical about this and most people can be taught the basics of how to manage their money. The investment business, on the other hand, makes the process look overly complicated, which requires the aid of an investment professional to navigate - even though the long term results of most such professionals isn't all that special.
Comments
Like everyone who has written before me, I owe many thanks to Jonathan's writings and the many contributors who have helped me stay connected and informed as my own career in the finance industry ended upon retirement. Jonathan was simply too young to now be gone, but as we mostly know and accept, there is seldom a "good" time to depart. To his family: I grieve for your loss and thank you for sharing him with us for along as we had him.
Post: Farewell Friends
Link to comment from September 24, 2025
I spent my career in the wealth management business, trying to get clients to develop and stick to a budget plan - with varying success! In retirement, I like you, do not work from a budget. However, I track closely how our investments perform and what our sources and amounts of income are. I've been retired 13 years and am comfortable with my approach. However, everyone's pain points are different and careful budgeting for some may be what helps them sleep.
Post: Budget, What Budget? (Know Thyself)
Link to comment from September 20, 2025
I suppose the answer to this problem in part depends on how much you have to invest. Like you, I have been raising some cash over the last year as my confidence in the economy wanes. At age 77, I am reasonably certain that my wife and I have enough to last us the rest of our lives - absent some major economic or other catastrophe. I remain mindful, however, that one of us could live another 10-15 years and need extensive care at some point. I have also factored in that our son will likely receive a considerable amount from our unused IRA balances that he will be able to withdraw over a 10 year period. Given this time horizon, equities will need to remain an important part of our asset allocation in order to combat the effects of inflation.
Post: Not Staying the Course
Link to comment from September 20, 2025
I am curious that you didn't mention high yield bonds. Yes, they are positively correlated to equities, but if you are willing to buy them when they are cyclically cheap and sell when they begin to look a bit pricey, you can generate some capital gains, with a healthy current income stream.
Post: Best Bond Funds for Your Portfolio: Treasurys, Corporates, and Municipals Explained
Link to comment from September 20, 2025
I grew up in a family that had lived through the Depression and WWII, and the efforts they made to scrimp and get by were passed down. My wife and I have been determined savers our whole lives and are secure in our retirement. Our biggest problem is spending what we have while we are living and what to do with the rest when we are gone. Our savings efforts were successful in part because of determination, but more importantly because we also had the means to save. For too many families, good savings habits won't necessarily help much if the amount of their income is insufficient. This is in part an income and spending problem, but it is exacerbated by the lack employer retirement savings plans, especially in small businesses, that would help more people better prepare for their retirement years.
Post: Being poor, even low income in retirement is no fun and society makes it more difficult
Link to comment from September 13, 2025
My wife and I have never had large numbers of credit cards, but over time we have whittled down the number to a bare minimum. Store and gas cards are not that important as most businesses also accept major credit cards. We don't have an airline card, nor a major credit card that earns travel points or other travel benefits. We also don't pay a fee for any credit card, no matter its color, and our current credit limit is far more than we'll ever need. Instead, we each carry one card on a shared credit account and payoff the balance due each month. We also use our cards for most of our purchases and carry very little cash. Finally, because we pay off our balance each month, our credit card company pays us a generous cash-back amount each month, paid for by other card holders who carry a balance.
Post: What is your credit card rewards strategy?
Link to comment from September 13, 2025
A reminder of the old saying "Fools plan, but the future decides." Most planning tools are just that: tools. Tools are made to help us better identify possible future outcomes, but they are not crystal balls that can actually tell us what the future holds. As I often told clients who were seeking greater certainty "If I could read the future, I'd be rich and you'd be talking to my replacement." On a more practical level, we all need to understand that any plan only encompasses a moment in time and to remain effective, our plans need to be regularly updated to meet changing circumstances. Estate plans are not a one and done effort. Financial plans are even more volatile.
Post: Navigating the Unknowns of Financial Decisions
Link to comment from September 13, 2025
I worked in the investment biz and one year was a part of the employee benefits communications team for our company's 401K plan. While I generally knew that too many employees were too conservative in their investment choices, I was appalled when I spoke to individual employees about their plan choices. The number who were entirely invested in the cash option and their reasons why (safety) was revealing. Not only did many employees not understand the basic concept of the time value of money, our company had utterly failed to help its employees understand this concept in order to make better long term investment choices. Save early and save often are just the starting steps to successful investing. People also need to understand that a reasonable exposure is their only sure way of growing their savings on an inflation adjusted basis.
Post: This post contains a secret and words I used in a few forum posts ago. Why is it not encouraging.
Link to comment from September 6, 2025
We miss you, and especially your thoughtful comments on investing. I hope your family is doing well as this form of cancer is both awful to have and awful to watch. Best regards, and thanks.
Post: Health Update
Link to comment from September 6, 2025
The investment biz is constantly in search of new "sizzle" to part dollars from unwary investors. I have come to the conclusion that much of the investment process is not all that hard. What is hard is not panicking when markets turn and having the discipline to start early and save often. There is nothing magical about this and most people can be taught the basics of how to manage their money. The investment business, on the other hand, makes the process look overly complicated, which requires the aid of an investment professional to navigate - even though the long term results of most such professionals isn't all that special.
Post: Inventing Problems
Link to comment from September 6, 2025