HAPPY RETIREES

#HappyRetirees #mortgages #MultipleSourcesOfIncome #FullCalendar
There are three characteristics that make happy retirees.
Those are a paid-off, or at least paid-down mortgage, multiple sources of income and a full calendar of activities.
So says Wes Moss, who writes a Money Matters column for The Atlanta Journal-Constitution, and has a Money Matters radio show on WSB in Atlanta. He discussed happy retirees in his April 24, 2018, newspaper column.
Moss narrowed the happiness criteria down from the research he did for his book, “You Can Retire Sooner Than You Think.”
The mortgage issue is certainly up for debate. Certainly, when one is working, paying down mortgage debt is certainly a good use of money. It’s not a substitute for saving and investing, but if you have a relatively high mortgage interest rate, applying extra money to one’s principal in mortgage payments is like putting money in your pocket.
Of course, if your interest rate is relatively low, and you have a good financial adviser, you can probably do better saving your cash and investing it well. A rule of thumb: if you have a 5 percent interest rate on your mortgage, and you have a good financial adviser who can certainly make you a good deal more than that on your money – on average, of course – then saving and investing could be more lucrative over time.
On the other hand, in a down financial market, paying down that mortgage debt IS a good use of excess cash you might have. It’s certainly better than spending it on frivolous things.
Keep in mind that the more debt you pay down early in the mortgage, the less interest you’ll be paying toward the end of the mortgage. As more of your monthly payment is applied to principal, the sooner your mortgage will be paid off.
Multiple sources of income is also a good thing – not necessarily more income, as Moss points out.
We think of income sources for retirees in terms of a pension, Social Security and perhaps a low-stress part-time job that you like doing.
If you’d been a good saver and investor in your working years, you might also use some of the dividends, interest and other income your nest egg is now earning for you. Try to refrain from touching your nest egg’s principal. Whether you die young or live a long time, as long as your principal is relatively intact, you will NEVER outlive your money.
As for a part-time job, it may serve two purposes. It will provide some pocket money and keep you busy in your elder years. However, if you don’t need the job, your time may be better spent pursuing your favorite hobbies or other activities like, say, golf or travel.
Or, you could add to your sources of income one of the many vehicles out there that allow folks – retirees or not – to make a potentially substantial income by spending a few part-time hours a week. To check out one of the best such vehicles, message me. It could allow you to spend some non-stressful, even fun, time adding to your income sources and help friends do the same.
The lesson here is to plan for your retirement while you are young. You never know when you will retire – or be retired by your employer. You never know when that one bad manager comes into your orbit and kills your career.
If you plan well, perhaps forgoing some immediate pleasures to save money, you can retire, as Moss’ book title says, sooner than you think. If you are forced to retire before you want to, good planning could allow you walk away from that job with a smile.
Peter

DEBT: WEALTH VEHICLE AND WEALTH KILLER

There’s good debt and bad debt.
Of course, having no debt at all is ideal, but often, to have what you want in life, you sometimes have to borrow money.
Mortgage debt is among the good kind. As you pay it down, you are paying a part of it to yourself in the form of equity in your home. The more you pay down, the greater the equity. As a bonus, you are living in your house, too, so there’s an absence of rent payments. When your house is completely paid off, you essentially are living there for free.
In this economic milieu, when you sell a house, it’s not an automatic profit. But if you HAVE to sell your house, one of the considerations is that for however long you’d lived in your house, you didn’t pay rent – all of which goes into someone else’s pocket.
College loan debt used to be considered good debt. You were getting money for an education that ultimately was going to lead you to a better job than if you hadn’t gone to college. It made college available to non-wealthy families.
But Carolyn Thompson, reporting for the Associated Press, asserts that student loan debt is widening the gap between rich and poor. Her article ran in the March 30, 2014, edition of The Tennessean newspaper in Nashville.
Thompson’s point: those who came out of college with lots of debt – roughly 37 million people saddled with $1 trillion in debt – will have a hard time catching up with the wealth of their peers who graduated with no debt at all. In short, those from wealthier families, long term, will have a leg up financially on their cohorts that were forced to borrow to go to school.
Looking at the big picture, a college education isn’t what it used to be. Decades ago, a college education gave you a shot at jobs that those who didn’t graduate or finish college wouldn’t get. Companies hired raw brains, and trained them for the jobs they wanted them to do.
Today, some of those degrees we cherished years ago are almost worthless in terms of job opportunities. You may have studied what you loved, or found your passion in, say, the arts, but converting that to economic advancement can be difficult.
Therefore, if you borrowed money to study what you love, or to find your passion, you need to do something to pay back all that debt. Unemployment, or constant job hunting, isn’t going to make that debt go away. Even if you get a good job out of college, as Thompson asserts, you’ll still have a potential six-figure debt out of the gate. Those years it takes to catch up to your debt-free peers may find you not getting a mortgage for the house you want, and having to settle for a lesser lifestyle for a long time. It could keep you from starting young to save for retirement.
In short: if you have to borrow money to go to college, you had better find it all worth it, regardless of what you study. You may come out an expert on Shakespeare’s works, but you could be making a living pouring coffee. Though there’s nothing wrong with having smart coffee pourers, you won’t be paying down your debt quickly, and may have little in savings at age 60.
There are numerous solutions to this problem, besides skipping college altogether. If you are not college material, don’t fret. There are other ways to make money. For one of the best, visit www.bign.com/pbilodeau . You may find a way to earn a substantial income without interfering with your academic loves or passion. If it fits you, and you start before college, you could have a financial leg up on all your peers.
As radio talk show host and financial expert Dave Ramsey might advise: don’t let debt be your financial death.
Peter