Didn’t I always tell you guys that if I ever invested in the stock market or really retired the market would crash? These last two days of big losses are really nothing to laugh at but I just find it so apropos to my own life. Just when I thought I was out, they drag me back in.
This time, however, my friends, I’m not worried because I finally followed the good advice of Jane Bryant Quinn. Quinn, up until a few months ago, wrote the retirement column for AARP. Quinn, IMHO is the supreme expert in retirement planning and setting yourself up so that your money will last you through retirement.
Up until I read Quinn’s new book, “How To Make Your Money Last: The Indispensable Retirement Guide” (click here) I truly did not know what to do. And I was 68 years old at the time. Sure lots of people along the way attempted to give me financial advice. The few two times I listened to an expert, turned out to be a disaster. I lost money. BIG money.
In Quinn’s latest book, which has now been fully updated to reflect all the retirement changes as per 2020, she advises setting up a system of baskets; minimally at least three baskets (which is what I have). In one basket should be your Wall Street investment money (stocks, bonds, mutual funds, etc) This is the money you gamble with in the stock market. This is the money that if you lost it all, your life wouldn’t end. This is the money you can leave long term so that if the stock market did take a dive you can wait the 2 to 5 years for it to come back. The next basket should be semi-invested in almost sure things but at a lower rate of return (i.e. money market) This is the money that will tide you over while you wait the 2 to 5 years for your primary basket to recover.
The third basket should be filled with enough basic money to tide you over till death should the first two baskets fail. This last basket should be in a guaranteed rate of return and IMHO that would be FDIC. I have my money in this basket invested in a CD that pays 2.5% but before you scoff at that, know that people now will be scrambling for security and usually that entails Treasury Bonds. They’re not paying too well right now. I know a bunch of people who would love to be getting 2.5% on their money. Ain’t gonna happen.
I was so happy that I found someone who wrote clearly and efficiently that finally I was able to understand the complicated world of investment and retirement. In fact, I was so happy about Jane’s advice, that despite her retirement to Rome, I still wrote to her now defunct email address back In January through AARP. And guess what? Jane wrote back to me.
Here’s my original email:
And here is Jane Bryant Quinn’s reply:
The stock market went gone down 1030 points on Monday. Today, Tuesday, the market closed down another 880 points. Maybe this is a correction. And just maybe this is all due to the coronavirus. We have to wait and see. In the interim, my Wall Street investments lost all their 2020 gains as of yesterday. Today, my loss is tapping into last years gains. Not good. But I have my other two buckets and as Quinn advised, I’ll be OK till this madness is over.
In the interim, I covered those two splurges I spent on myself the other day (the ring and the handbag) with cash and paid for them outright. I was going to put them on zero interest but decided against that. This is NO time whatsoever to take on any kind of debt.
Subsequently hubby and I are back to fighting over rich vs low income again. I don’t think it odd that hubs and I attended a low country style shrimp boil the other day and met some more locals. They fled the high cost of living states (like NY and NJ) and swear low income is the way to go.
They bought double lots in questionable neighborhoods (which are now on the rise) and built custom homes and have boats and RVs and Mustang convertibles sitting in their driveways. What they don’t have are higher taxes, higher energy and utility bills and a higher cost of living expenses if they took up residences in the richer neighborhoods.
As usual, of course, I’ll do my due diligence and sharpen up my financial balancing act. Things don’t happen by coincidence. I think our lives are all predetermined.
In the interim, I’ll keep this blog up BUT all things from the before time, which was yesterday, is old news. I have to create a new mission statement and adjust the “About Me” page. See how things change in an instant? I’m not the person I was in the before time. Today is a new day with new challenges and if we are to survive in this world, we have to be able to change and adjust in the same instant.
I will be back from time to time to share with you my feelings and observations. Thanks to all of you who have left me such wonderful comments and well wishes. I highly recommend Quinn’s book. You can rent it for free from the library, which is what I do whenever I need to re-read it. Or buy a low cost ebook copy from Amazon.
Stay safe and healthy amigos.
Hold onto your hats. It’s going to be a bumpy ride.