A Balanced Life

A Balanced Life

Life seems like it will last forever up until about the age of 30.  Very few of us have the wisdom this early in life to understand that like in the cartoon, where one character is out playing and criticizing those that are working diligently to prepare for a harsh winter, we too will get caught unprepared.  In life, the harsh winter is also known as the Golden Years (50 years of age and older).  Despite the myth not everyone is headed for a comfortable retirement.  Those that don’t make a special effort to prepare for later in life, will find out (way too late) that time runs out for preparing for a life of comfort and security.

Life ideally is a timeline that can be divided into conflicting priorities that must be met timely in order to achieve some sort of necessary balance.  As you have come to expect from me here comes the disclaimer:  This is my perspective and you are not asked to embrace it, after all “balance, and ideal outcomes,” are in the eye of the beholder.

Just to decide where the priorities start and fade is borderline problematic. At the time that we are going through the life stages we don’t see the importance of the moment.  Hopefully we start with the advantage of solid parenting and loving relationship.  These early years can make your life journey easier or harder.  Some parts of the country/world offer varying levels of educational opportunities, from non-existent to triple a premium (the parent’s income level is a major factor).  Besides the opportunities, we individually need to show enough interest to excel.  Few people get a redo opportunity (most of us get one shot at the brass ring if we are lucky).

Since I am writing a post and not a book I shall condense my thoughts and allow you to arrive at your own conclusions (not that you need my permission).  In my instance and with the benefit of hindsight, I am very fortunate to have made some good and some great decisions.  I did make some missteps that with time and extra effort I was able to almost fully recover from.  I will never know how some of my loved ones were affected by my missteps, but I hope and pray that like me, their lives will turn out great.  Already, I can tell that they are enjoying very (apparently) happy and productive lives.

Like many of us in the world I am the product of a very loving and caring but fractured family.  My parents separated when I was six years old and soon after divorced.  Unlike many who blame most everything on their parent’s divorce, I chose to analyze what I could do different.  Unfortunately it took me two tries to get it right.

Enough for background and now to look at what needs to be balanced.  Education is a tremendous foundation to build on.  The balancing act is more difficult but can still be achieved without the formal education (simply requires much more effort and an element of good fortune).  If children are to be part of life’s formula (crucial for me) than we must provide the best of everything that we can; shelter, nutrition, health care, education, learning activities, love and nurturing, not necessarily in that order.  The meaning of that statement is that our maximum effort needs to be exerted.

Social life outside the home should take a back seat, luxury items for the parents as well.  Dependable safe transportation versus luxury transportation in other words a Ford instead of a BMW (unless you are able to afford it without requiring sacrifice).  No eating out if you must sacrifice elsewhere.  Adequate house in the best neighborhood you can afford (safety).  Wife’s and children’s education is also crucial in the first part of life together.  All this wonderful priorities must be balanced while strengthening your relationship with your spouse or significant other.  

My wife and I offered (paid for) our children the first two years of college for the purpose of giving them a head start (incentive) in the right direction.  After the children leave the house, the next priority is to refocus on strengthening the all-important relationship between the parents, to diligently concentrate on spoiling each other (including, if within the budget and Audi or BMW). 

Ideally during the time of shifting priorities the retirement was also a priority that included a pension and social security while it’s still available.  With a lot of effort and a sprinkling of good fortune the sacrifices will pay off when you need it most.  I’ve always told my children, if you take care of yourselves, your mom and I will take care of each other.  The best is yet to come…..

Rapidly Changing Times

Rapidly Changing Times

Once upon a time opportunity was everywhere.  You hardly needed to strain your brain to figure a way to multiply your money. Today with the internet and business globalization, not only do you compete in your town, city, county and State, but now you are competing with people that can get by with $200 dollars per year income, and less somewhere in the world.

Some of the hottest businesses today were not around 10 years ago, Facebook and Twitter.  Some very prominent corporations of ten years ago are either gone or on the way out.  One example ENRON, one of the top 10 corporations in the country failed in 2001.  At the time of collapse ENRON had 62 Billion in assets. Another thing that is disappearing quickly out of this country is “Made In America” label.

Even small businesses (the back bone of our economy) have become dependent on China production to increase profits, and chances for success.  We are on a nasty merry-go-round. I am not arguing for or against, but there is currently a successful effort to increase minimum wage to $15 per hour.  In some areas of the country that is as much as 30% increase and more.  The fast food corporations are not going to absorb the labor increase of as much as 100%.  The additional costs will be passed on to the consumer.  Personally I don’t think that a hamburger is worth the present price (cost), but I certainly wouldn’t pay twice as much or more for the same product. 

 

The food chain will react with a domino effect further damaging the economy.  I can tell you from my experience in the workforce that even when a very hard working individual is deserving of an increase within his existing job assignment, he/or she don’t get that raise.  The reason is simple; within the rigid pay structure of a bureaucracy, to increase the pay of one individual within a group of 300 employees in the same pay bracket, would create discord in the least and bankruptcy at most.  In the just mentioned example the 299 workers not getting the increase could join together and demand equal pay (or even file a lawsuit).  So if you increase the one employee by $100 per month, results of your good intention could be an added production cost of $29,900 per month, or $358,800 per year, and that is just in one department, and within one pay bracket.  In case it sounds unbelievable to you, my son works for a company that employs 250,000 employees worldwide.

Who makes minimum wage? ~ By Drew DeSilver9

·       The controversy over Washington, D.C.’s “living wage” ordinance, which may prompt Wal-Mart to pull out of as many as six new stores planned for the city, has drawn new attention to those near the bottom of the nation’s wage ladder. The ordinance would require large, non-union retailers to pay their workers above the District’s $8.25-an-hour minimum wage. But who are minimum-wage earners, exactly?

·       Perhaps surprisingly, not very many people earn minimum wage, and they make up a smaller share of the workforce than they used to. According to the Bureau of Labor Statistics, last year 1.566 million hourly workers earned the federal minimum of $7.25 an hour; nearly two million more earned less than that because they fell under one of several exemptions (tipped employees, full-time students, certain disabled workers and others), for a total of 3.55 million hourly workers at or below the federal minimum.

 

Don’t think for a minute that anyone presently earning $12 per hour will stand still for a fast food worker to go from present $8 per hour, to $15 per hour and not ask for a raise or switch jobs.  Of course the domino will continue to fall.  A bad example might be that the CEO of the corporation might also want to double his compensation to maintain the gap between those that have and those that don’t.  The best is yet to come….

Honor Amongst Thieves

Honor Amongst Thieves

 

Buyer Beware (read customer)!  This time of year is the appropriate time to remember that Customer Service is not always about the customer.  Big corporations are looking out for their CEO, and Stockholders.  The days when you could walk away after making a deal and closing it with a smile and a handshake are so far removed, that most people are not even aware that it ever existed.  I expect to always be on guard whenever I am told verbally that something will be provided.  Now a days, however, almost every written guarantee is made with one of many possible disclaimers:  Subject to Change without Notice, Until Further Notice, and May be terminated without advance notice, etc., etc.

 

Once upon a time before corporate greed totally took over, a guarantee for life on a product or service, meant for the duration of the customer’s life.  Today a guarantee for life is more likely to mean the life of the product or the life of the company you contract with for the service.  Another commonly used scam is:  your interest rate can be extremely increased, if you miss a payment or your payment arrives late due to mail delivery service, to any one of your creditors.  In other words you could have a perfect payment record with a credit card company, but if you are late with a different credit card company (without any association between accounts) they will increase the interest rate you are charged across the board.

 

I remember when I was a young man, just getting started in the real world, a popular joke around the banking industry was that the banks were eager to lend you money, as long as you didn’t need it.  In today’s banking world they love lending young people money especially if you can’t afford the payments, because at the minimum payment rate, the loan will never be paid.

With the exception of the home mortgage, I could do well without the credit cards, unfortunately the banking industry crooks have arranged it so that you can’t get along in the world without a credit rating.  If you don’t have a good or great credit rating you may not be able to buy or rent a home, get a job, or buy auto insurance (at least not at a good price).

 

I was brought up trained to respect, and pursue stability (continuity).  Doing the correct thing according to my upbringing, damaged my credit rating.  How can stability and dependability cause damage to your credit rating?  Well, as soon as “online banking” was offered by my credit union, I embraced it.  Because I am dependable, I assumed that the credit card companies were dependable too (honorable).  I set up my payments to be paid automatically four days before they were due.  In the case of accounts that I wasn’t using I assumed once again that at the rate I was paying (larger than minimum payments), by a certain date my balance would be paid off. 

 

 

I applied for a credit purchase and was accepted but told that my credit was less than great.  I decided to check and found that I was making late payments to credit cards.  When I checked further, I found that the credit card companies had changed their statement closing dates (and regularly do), and because I wasn’t checking my accounts regularly, my payments were going in late and the late charges were eating up my payments. If only someone would regulate the financial institutions that we are forced to deal with as a way of life.  Oh well, wishful thinking!  Stay on guard of your finances, no one watches your financial back like you can.  The best is yet to come….

Staying Within Budget 2

Staying Within Budget 2

This post is an update to: Staying Within Budget, posted October 12, 2013, http://www.being50.com/2013/10/staying-within-budget.html

There are many good reasons to save money or resources.  There is, however, such thing as going over board: here are some examples from my years of growing up.   

Back in the mid 1950’s when we lived in Texas my stepfather discovered what is known as Gleaning.

Gleaning (also called scrounging) is the act of collecting leftover crops from farmers' fields after they have been commercially harvested on fields where it is not economically profitable to harvest.  Some farmers embrace the practice because it gets the fruits removed (that were not ripe when the harvest took place) rather than rotting on the tree.

We always had delicious fruit desserts that were free of cost in exchange for spending a few hours out on the orchards as a family unit picking fruit to take home.  Plenty of oranges, lemons, water melons, cantaloupes, tomatoes, and grapefruits.  I can’t begin to put a price on the amount of money that we saved.

Another favorite trick of my stepfather’s was to cross the border into Mexico (Matamoros, across from Brownsville) once a month on a payday to purchase our red meat supply.  The prices were much cheaper than in Texas.  We also purchased other items that were cheaper in Mexico like alcoholic beverages, and we always included a meal (feast) at a nice restaurant (about 10% of the cost in Texas). My stepfather also started buying Mexican manufactured cigarettes, again at a fraction of the cost.  In case you are wondering about the length of his life with his alcohol, and cigarette habit, he lived to the ripe old age of 96.

When we finally moved to the Pacific NW in 1959 he immediately went from earning $60 per week to near $260 per week plus a home supplied by the employer (a nice 4 bedroom home out in the country).  In retrospect, his pay, back than as a foreman for a 9,000 acre farm, was only $2.25 per hour, plus a home and pickup truck, but his hours were unlimited.  He was a true workaholic, and he averaged well over 100 hours per week.  Well, all that good fortune didn’t translate to easy street for the family.  A lifetime habit of pinching pennies is hard to break.

During the cold winters our oil furnace would get turned off at bed time (around 10:30 at night).  That’s right, not turned down, but actually turned off at night. Whom ever got up at around 4 am would light up the furnace and run back under the covers to wait for the house to warm up.  I swear winter nights were just as cold inside our house as it was outdoors.  Personally, I am the kind of person (family provider) that places a lot of emphasis on family comfort.  I don’t smoke or drink, so my disposable budget goes to added family comfort.

Besides, as I get older I am not as tolerant of cold or hot temperatures.  I like to provide as much comfort to my children as a way for them to set high goals to live up to, once they strike out on their own.  Our mother could have driven us to the school bus stop (a mile away), but my stepfather insisted that we walk and save the gasoline (22 cents per gallon).  For many reasons including safety, I won’t let my granddaughters wait for a school bus or even walk to the park.  You might say that I am the butler to the 3 princesses.  There are many other areas where we can cut corners that don’t have anything to do with children’s safety.

Always remember not to be penny wise and dollar foolish.  Make sure that your savings are real and not just savings with money costing consequences.  For example if you turn off the heater at night, you will be required to run the heater on high in the morning to warm up the house, and that could cost you more than you save by turning the heater off.  Instead lower the thermostat to 65 degrees.  Better yet if you have the right kind of thermostat you can program it so it lowers the temperature while you sleep, and turns it back up one hour before your alarm goes off.

When it comes to money matters, there is more than one way to balance the budget; you can reduce your money out-flow (decrease your expenses), or increase your money intake.  I’ve always chosen a balance between reducing costs, and increasing cash intake (part time job or side business).  I am the first to admit that not everyone has a solution to a money problem.  When you reach a certain age with a limited income. You find yourself having to turn to family, the church, or the State; in that order.  The best is yet to come…

Staying Within Budget

 

Staying Within Budget

There are many good reasons to save money or resources.  There are two main reasons why you should save money.

1.       Because you need to   

2.       Because you can

There is such thing as going over board: here are some examples from my years of growing up.  I’ve said before that my step father was so tight with money that he could squeeze the buffalo off of a nickel.  Before we moved to the Pacific NW we lived in the Rio Grande Valley part of Texas.

·       The Rio Grande Valley (RGV) or the Lower Rio Grande Valley, informally called The Valley, is an area located in the southernmost tip of South Texas. It lies along the northern bank of the Rio Grande, which separates Mexico from the United States.

·       The Rio Grande Valley is not a valley, but a floodplain containing many oxbow lakes or resacas formed from pinched-off meanders in earlier courses of the Rio Grande. Early 20th-century land developers, attempting to capitalize on unclaimed land, utilized the name "Magic Valley" to attract settlers and appeal to investors. The Rio Grande Valley is also called El Valle, the Spanish translation of "the valley", by those who live there. The residents of the Rio Grande Valley occasionally refer to the area as "El Magico Valle del Rio Grande" ("The Magical Valley of the Rio Grande"), and also simply by the initials R.G.V.

·       The region is made up of four counties: Starr County, Hidalgo County, Willacy County, and Cameron County. As of January 1, 2012, the U.S. Census Bureau estimated the population of the Rio Grande Valley at 1,305,782.  According to the U.S. Census Bureau in 2008, 86 percent of Cameron County, 90 percent of Hidalgo County, 97 percent of Starr County, and 86 percent of Willacy County are Hispanic.

·       The largest city is Brownsville (Cameron County), followed by McAllen (Hidalgo County). Other major cities include Harlingen, Edinburg, Mission, Rio Grande City and Pharr.

Cost of Living 1956

·       How Much things cost in 1956
Yearly Inflation Rate USA 1.52%
Yearly Inflation Rate UK 4.7% 4.7%
Average Cost of new house $11.700.00 Average Monthly Rent $88.00 Average Yearly Wages $4.450.00 Cost of a gallon of Gas 22 cents Average Cost of a new car $2,050.00 Ground Coffee per LB 85 Cents

My family would go over the grocery (newspaper) ads, and actually drive between towns to buy the price leaders (the lowest priced items used to draw you into the store.  Grocery shopping used to take up to 6 hours and 40 miles for driving to get the best prices.  Try to remember that gasoline back then was a mere 22 cents per gallon (at that rate we would only spend about 66 cents on gasoline, at today’s gas costs you would spend almost $10).

Payday for my stepfather was every two weeks $120 take home per paycheck or approximately 81% of the average yearly Gross income. I am very proud of the old fella (he did very well for the times).  With the economic turmoil of 2008 the average national income for 2009 was $39,423.00.  Many young families struggled then and still do now to make 75% of the average yearly income.  Look for “Staying Within Budget.”  The best is yet to come…..

Budget 101

 Budget 101

I was recently standing in line at my Credit Union where my wife and I have been members for some 25 plus years.  I started paying attention to the television monitor on the wall behind the counter where the cashiers are seated.  There are mostly news articles but every so often they make a mention about other services that are offered by the Credit Union.  The one ad that I am about to address is going to save my wife and myself and at this point at least 10 other families untold amounts of money. What I am about to tell you will most likely surprise you.  Paying attention to the monitor reading the article and following up on it will save my wife and me over $120,000.00 over the next 30 years. I know I still can’t believe it either.  You hear all this talk about home refinancing, but half the time you can’t believe the hype. 

A large percentage of home mortgages end up owned by Fannie Mae, or Freddie Mac (government agencies).  The way it works:  banking institutions like Wells Fargo, Bank of America, Home Street, Credit unions, etc., promote their mortgage departments, and once they have a customer, they package a bunch of loans and offer them to Fannie Mae or Freddie Mac for sale.  There is a lot of money to be made over the term of the contract, just by looking at my savings and you know they are making more off of me than I am saving.  The problem for the smaller institutions is that they have to hold on to the mortgage for the length of the contract to realize the big profit.
By selling to the government agencies, they can make a quick sum for the sale and free their own money to keep financing homes.  What you need to know is that at present the interest rate is hovering right around 3.5%, so if you have a rate higher than say 5 or 6% you would save as much or more than I did.

There is a catch, you do have to qualify; make sure your mortgage is financed by one of the government agencies mentioned above (even if you are making your payments to Bank of America for example), and your income to debt ratio has to meet the requirement.  You don’t have to have positive equity but if you do it still works, this program is for people that are in trouble with their mortgage, but even if you are not you can qualify.  It’s worth checking out.

Just to tie this post to the blog theme, I will share something from the past.  The first home I ever bought was in Eastern Washington in 1971 and I bought it for $21,500.00.  The following are statistics for life in in the US (1971):

Cost of Living 1971

How Much things cost in 1971

Yearly Inflation Rate USA 4.3%, Year End Close Dow Jones Industrial Average 890 Average                                                          Cost of new house $25,250.00, Average Income per year $10,600.00 Average Monthly Rent $150.00 Cost of a gallon of Gas 40 cents Datsun 1200 Sports Coupe $1,866.00 United States postage Stamp 8 cents Ladies 2 piece knit suites $9.98 Movie Ticket $1.50

As we use to say back then put that in your pipe and smoke it.  Remember the best is yet to come….