Where Did Your Grandmothers Live When They Were Older?

 My father told me that during the Great Depression, his grandmother came to live with them in San Francisco.   They had a beautiful home  on Taraval Street, in West Portal.  The poor woman had run out of money. 

 His parents slept in the master bedroom, his sisters shared the back room, and my dad had to sleep in the middle room with his grandmother.  He was a little boy, and he didn't like it.  "She smelled like Ben Gay," he told me.   "And she snored," he added.  I giggled.  I guess many  older people come off as unappealing to young children.  We don't realize that we will be in their shoes someday.

She would stay four months with my dad's family, then go for four months with another one of her children, and spend the remainder of the year with her third child.  They took turns taking care of her.  Her husband had died, and she didn't have the means to live on her own.  There was no assisted living in those days.

It's important to look at our family history with money and retirement.  We can learn so much from the past.  Do you know what happened to your parents' grandparents?

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Planning For Old Age

 

This morning I talked on the phone  with my friend about our financial plans for retirement.  We discussed how much income we will have, where we will live, what housing and living expenses will cost, and other subjects.

It is so important not to let retirement sneak up on you!  I can't tell you how many of my dancer friends have had to have unexpected surgeries at around the age of fifty.  None of us had purchased disability insurance.  (which is very expensive.)  When you are self employed, if you can't work, you don't get paid.  No one thinks that they are going to be the one on the operating table, but it is highly common.

I never imagined that I would be having my hips replaced at age fifty.  Fortunately, I had six months of living expenses in my savings account.  I also had a large stockpile of food, a productive garden and orchard, and a paid off home.  Many others aren't so lucky.  

It's wise to rehearse for your retirement.  Practice living on the amount of money that you anticipate receiving.   Factor in for inflation.  That surprises many people.  How long will your car last?  Will you need to replace it?  Can you walk or bicycle places so that you aren't wasting trips?   Keeping your mileage low really saves money.  Older cars are much cheaper to insure and register.

Will your home need a new roof?  How about your appliances?  How old is you water heater?  Do you have mature trees that need trimming?  All of these costs can sink a budget, if you haven't planned for them in advance.

I personally think an older person should have five years worth of living expenses in savings.  If there's a downturn in the market, you can pull on that cash and not lose a huge percentage of your principal.  

It's helpful to keep track of your net worth.  You can check your home's value on Zillow or Realtor.com.  If you add up the totals on what you have, you can get a visual picture of whether or not you are headed in the right direction.  Planning is everything.  Just getting started is the main thing.  

How does your future look?  Do you feel confident and optimistic about the old lady or man that you will become?  Will that person be secure and comfortable?

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Choosing Stocks, As A Woman

 I have recently gotten very involved in the stock market.  After my dad died, the brokerage firm where he had been doing business kept calling me and encouraging me to sell my Chevron stock.  It had dropped significantly in value.  I did not have a diversified portfolio, it was just a few stocks, with most of what I owned in Chevron.  I declined, and told them that I planned to hold the stocks for twenty years.  My approach at that time was one that  came to me intuitively: a third in land/real estate, a third in stocks, and a third in cash.  I just felt that it made sense.   I learned later that this was an ancient Jewish tradition.  Interesting, since I'm not Jewish.

As time went on, and my deceased parents' home sold, I started researching dividend paying stocks.  I watched Youtube videos made by investors who live off of their dividends.  This is what's called passive income.  That's what my dad did.  He sold his business before retiring, and invested that money in the stock market.  He checked his statements online daily, and didn't trade.  He lived off the interest and reinvested the dividends.  He also owned some land and a paid off home that went up in value.  California real estate has soared.  

I decided to mirror his approach, on a smaller scale.  I researched the companies that interested me, and linked my bank account with my brokerage account.  After finding the stocks that are at the price I feel comfortable with, I transfer the money for the desired amount, and then send my broker an email.  He calls me back to take the order over the phone, and it shows up on my computer screen once it's executed.

Many women are afraid of the stock market.  Suze Orman recommends only investing there what you can afford to lose.  She suggests having at least twenty different stocks, so that if one goes down, the others will probably equalize it.   It's not hard at all.  Once you start looking at your stocks each day, you memorize the companies, what you paid, what you've made, and which ones have dropped or risen in value.  It's kind of like checking what your home is worth on Zillow.  Just because it goes up or down doesn't mean you sell it.  This strategy is buy and hold.

My dad used to tell me that he managed his investments instead of working.   Now I see how wise that was.  I make far better money in quality stocks than I ever made teaching ballet or yoga.  Many artists struggle, and put everything into their art.  

I think that women can be excellent, disciplined, and successful investors.  Many trust other people to manage their money, and those advisors may behave in a reckless or self interested manner.  I believe strongly in making your own decisions with your money.  No one is allowed to touch or trade my stocks.  If you understand the companies, and feel that they'll be around for the long haul, you will probably feel safe with your portfolio.  

Once the dividends start coming in, it gets exciting.  You do need to plan for taxes, so that you aren't surprised when you owe money.  It's all part of the discipline, and helps you to earn interest on your money.  This way you beat inflation.  

Thank you for your comments.  They add so much talent and energy to the blog.  Please comment in English.  I'm sorry, but comments with links will not be published.  If you enjoy the posts here, please share them.  Comments may take a few days to appear; they are moderated.