While LifeNuts and longevity go hand-in-hand, the connection between the two is not simply diet and exercise. Accordingly, my blogs will focus on all aspects of being a LifeNut, one of which is financial management.
Financial health is just as important to a LifeNut as having a low BMI. What happens if you can’t pay your mortgage or the rent? Or what if the interest on your credit card bills gives you headaches when you’re trying to get to sleep? Those credit card collectors won’t stop calling, you know.
Many Americans lose sleep, gain weight, get divorced, lose their jobs, and suffer from countless other troubles because they lack financial expertise. LifeNuts, on the other hand, take responsibility for their financial decisions and they learn from their mistakes.
A story in the New York Times (9-20-12) commented on the shrinking life expectancy for the least-educated segment of our society, especially women without a high school diploma. The writer posed possible reasons, “The reasons for the decline remain unclear, but researchers offered possible explanations, including a spike in prescription drug overdoses among young whites, higher rates of smoking among less educated white women, rising obesity, and a steady increase in the number of the least educated Americans who lack health insurance.” Ironically there’s no mention of financial ineptitude.
Yet, without adequate finances, it’s difficult to survive, let alone thrive. Even high-income wage earners suffer from this dilemma. You know, it’s the keep-up-with-the-Joneses syndrome. I need to have that new car, a boat, a condo in Florida, a house in Aspen. The list never ends.
Problem: Most folks go through high school and college with little or no financial education. Once they get a good job, they want the high life, which of course costs money. Some people who earn more than $500,000 a year live from paycheck to paycheck. Hard to believe, but it’s true. I’ve known some. There are some people with masters and doctoral degrees who will never be able to retire because their net worth is so low. Yes, they’re educated in certain fields but they lack financial and investing skills.
What happens during financial turbulence? If you’ve studied our website or read LifeNuts, you know that any kind of stress (financial pressure is one type) leads to a biochemical reaction in the body. One notable chemical, cortisol, has been shown to lower one’s immune response, resulting in diseases ranging from the common cold to cancer. Cortisol, if it hangs around for a long time, is not your friend.
Solution #1: Live within your means and save at least 15% from each monthly paycheck. Put this amount into a “power account.” It’s called a power account because, if you fund it each month, it will give you financial independence one day. Obviously the younger you are, the better. Many baby boomers will need to work for the rest of their lives because they did not accumulate significant savings. If you’re young and smart, you’ll heed this warning.
Solution #2: Become an investor. This topic scares people. And, with the ups and downs – especially the downs – of the stock market in the past two decades, being scared is not an unusual reaction for most people. Read the section on financial management in LifeNuts. Read Barrons and other weekly financial publications. Read books on investing. But don’t get sucked into the day trading dog fight. Unless you’re on the floor of the stock exchange, you’re at a disadvantage here. Diversify. Don’t put all your eggs in one basket. And, for goodness sake, don’t let someone manage your money for you. I can’t believe how many people I know who have entrusted their life’s savings to someone and lost huge amounts. Avoid sharks … especially ones like Bernie Madoff.
Solution #3. Set financial goals. What will your net worth be at age 30? At 40? At 60? Begin when you’re young. Believe me, time flies and old age doesn’t wait for anyone. It comes knocking sooner than you would expect.
If you feel you’re not good with numbers, consider the case of a poor, high-school educated coffee shop waitress. This young lady decided she was going to become a millionaire and set a goal of accumulating that figure by age 40. When she reached her goal, she adopted a child – as a reward to her and her husband. She had very little, if any, financial education. She didn’t have a college degree. No affluent parents. But she had determination and she read and learned, teaching herself. She’s rented a home for the past several years and is almost ready to buy one … but not until the market bottoms, which it will eventually. You can read about this millionaire mommy next door at: http://millionairemommynextdoor.com/2010/04/wait-until-2012-to-buy-a-home/
Jen Smith was making minimum wage, had only a high school diploma, and was a woman in a man’s working world. If she can do it, so can you. Get started now and join the LifeNuts club!
Financial health is just as important to a LifeNut as having a low BMI. What happens if you can’t pay your mortgage or the rent? Or what if the interest on your credit card bills gives you headaches when you’re trying to get to sleep? Those credit card collectors won’t stop calling, you know.
Many Americans lose sleep, gain weight, get divorced, lose their jobs, and suffer from countless other troubles because they lack financial expertise. LifeNuts, on the other hand, take responsibility for their financial decisions and they learn from their mistakes.
A story in the New York Times (9-20-12) commented on the shrinking life expectancy for the least-educated segment of our society, especially women without a high school diploma. The writer posed possible reasons, “The reasons for the decline remain unclear, but researchers offered possible explanations, including a spike in prescription drug overdoses among young whites, higher rates of smoking among less educated white women, rising obesity, and a steady increase in the number of the least educated Americans who lack health insurance.” Ironically there’s no mention of financial ineptitude.
Yet, without adequate finances, it’s difficult to survive, let alone thrive. Even high-income wage earners suffer from this dilemma. You know, it’s the keep-up-with-the-Joneses syndrome. I need to have that new car, a boat, a condo in Florida, a house in Aspen. The list never ends.
Problem: Most folks go through high school and college with little or no financial education. Once they get a good job, they want the high life, which of course costs money. Some people who earn more than $500,000 a year live from paycheck to paycheck. Hard to believe, but it’s true. I’ve known some. There are some people with masters and doctoral degrees who will never be able to retire because their net worth is so low. Yes, they’re educated in certain fields but they lack financial and investing skills.
What happens during financial turbulence? If you’ve studied our website or read LifeNuts, you know that any kind of stress (financial pressure is one type) leads to a biochemical reaction in the body. One notable chemical, cortisol, has been shown to lower one’s immune response, resulting in diseases ranging from the common cold to cancer. Cortisol, if it hangs around for a long time, is not your friend.
Solution #1: Live within your means and save at least 15% from each monthly paycheck. Put this amount into a “power account.” It’s called a power account because, if you fund it each month, it will give you financial independence one day. Obviously the younger you are, the better. Many baby boomers will need to work for the rest of their lives because they did not accumulate significant savings. If you’re young and smart, you’ll heed this warning.
Solution #2: Become an investor. This topic scares people. And, with the ups and downs – especially the downs – of the stock market in the past two decades, being scared is not an unusual reaction for most people. Read the section on financial management in LifeNuts. Read Barrons and other weekly financial publications. Read books on investing. But don’t get sucked into the day trading dog fight. Unless you’re on the floor of the stock exchange, you’re at a disadvantage here. Diversify. Don’t put all your eggs in one basket. And, for goodness sake, don’t let someone manage your money for you. I can’t believe how many people I know who have entrusted their life’s savings to someone and lost huge amounts. Avoid sharks … especially ones like Bernie Madoff.
Solution #3. Set financial goals. What will your net worth be at age 30? At 40? At 60? Begin when you’re young. Believe me, time flies and old age doesn’t wait for anyone. It comes knocking sooner than you would expect.
If you feel you’re not good with numbers, consider the case of a poor, high-school educated coffee shop waitress. This young lady decided she was going to become a millionaire and set a goal of accumulating that figure by age 40. When she reached her goal, she adopted a child – as a reward to her and her husband. She had very little, if any, financial education. She didn’t have a college degree. No affluent parents. But she had determination and she read and learned, teaching herself. She’s rented a home for the past several years and is almost ready to buy one … but not until the market bottoms, which it will eventually. You can read about this millionaire mommy next door at: http://millionairemommynextdoor.com/2010/04/wait-until-2012-to-buy-a-home/
Jen Smith was making minimum wage, had only a high school diploma, and was a woman in a man’s working world. If she can do it, so can you. Get started now and join the LifeNuts club!
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