The greatest generation

With my Uncle's passing,
the greatest generation continues to leave us

Leaving before high school graduation
My uncle fought WWII in the Pacific
My father in law was in the Pacific as well
Different islands
Different missions

Both men returned home
Married "later"
and went to school
My uncle went to Santa Clara
(he graduate from high school 50 years after he graduated from college)
My father in law went to plumbing school

Both men worked hard
bought houses
built communities
were back bones of their churches
and rarely
if ever
talked about what they saw in their service again.

It is the greatest generation
They put their all into our country
And we will miss them.

The big city

When you live in a small town
you learn to do without.
No chain restaurants in the area
the nearest is 25 minutes away.
The closest shopping mall is
 has JC Pennys and Dillards
that is it for 100 miles.

Both of our children live
in big cities.
One is in Maryland outside of DC
the other near Tacoma.

My life experience has mostly been in a big city
except here- and we CHOSE to move back here.
Phoenix, Wuerzburg, Washington DC, Indianapolis,
Milford, Monterey, Hong Kong, Honolulu
Riyadh, and finally the beginning of small town-
Flagstaff and now Milford again.

We actually live 10 miles from the small town here.

Missing the amenities of a big city
can be a drag to your life at times.
It is a long drive to Church.
We shop on line, almost exclusively, for clothing.
Finding shoes are a particular problem.
We do not have the option of finding anything we want
when ever we want it. 24 hour stores- you are dreaming.
Better get those rain boots while they are on the shelves.

Off we go to the city today.
We will walk to the church!
The shopping bug has hit, but we will have little time.
Costco, Safeway (ohhh- how I miss Safeway!),
a liquor store with more than two kinds of beer,
Norstroms, Macys, Crate and Barrel, REI.
We will hit them all.
Don't forget the trip to Ivar's on the dock!
It will be a set of short trips to each
getting ready for the wedding.

Do you think my mind can take in the stimulation?
How about my pocket book?

I never thought of myself as a food.

Sandwich
Gooey peanut butter (with lumps) and sweet jelly.
Whole grained wheat bread.
Smooshed together like a toddler would eat.

We fly out tomorrow for our son's wedding.
As parents of the groom we are doing the traditional
not the norm these days.
We are paying for the photographer
and the honeymoon.
Not a cheap escape
but this kid put himself through university
so it is what we are going to do.

The week after we are home
I will drive 1200 miles to my mother's.
Driving is expensive
but renting a car after flying is also expensive.
Having my own car is important.

My mother is moving to an independent living apartment
in a continuing care facility.
Her choice.
Last time mom lived in an apartment was 64 years ago
one semester
at college.
It is going to be a change- big time.

My local sibs know that I am retired
so it is my duty to go out and move her.
Actually, I love being with mom so it is not a chore.
I will stay with her
and then inventory her house
beginning the march to selling what she does not need.

Mom chose this particular place to live
because my brothers (who never call)
said it would be a much more convenient place for them to stop in.
Right now they live 2 miles each from mom
and they never stop in.
This place is not any closer....

There is a sister who does live about 30 miles away
that does everything that she can to keep my mom afloat
She and I double team mom
Why cannot the other two chip in?

I'll be staying with mom a month
it is a long time to be gone from home.
Usually I don't mind
but September is the best month of the year in Kansas.
And since my husband and I have finally reconnected
a month- the best month- will be hard to swallow.

But off I go.

Me- smooshed in the middle
trying to balance bumpy finances & sweet family
between the rough and tasty part of my life.

A sandwich.

Earthquakes, Hurricanes and the Market. Oh my!

The East coast is sure having a rocking time this week.
Hurricane Irene is supposed to make landfall soon
They have already experienced an earthquake

Take a page out of normal emergency preparedness
and make up a 72 hour kit
right now
before you are in the line with every other ding dong before a natural disaster.

What do we always have on hand?
Cash- not a lot - but enough to get gas and a meal when the computers are down.
Water- we keep on hand 10 gallons. There are only two of us and we live near a really big lake.
Food- What is your favorite type of protein? Enough for five days
Gas in your car- we learned this the hard way when we experienced a bombing in Saudi.

Sitting on the sidelines

We made a decision to sit out the market.
It is difficult to do.
We have made tremendous gains in the last four years.
Almost as much as one of us working full time.
But the time came
That we were up too early in the morning
and too late at night
wringing hands and wondering
if we would begin to lose principle.
We are only 10% in right now
So our new split is
70/20/10 Cash/bonds/stocks
We will wait until the next election is about to happen
to buy in again.
We think that US corporations are more willing to let the ship go down
without them
then risk any savings on the ship!

Are we giving up dreaming?

I worry that we are giving up tomorrow for today.

Here is a video clip to wonder.

Heat, Rain and the price of corn!

We had our share of heat this summer.
Often it was warmer in Kansas
than it was for my family in Tucson.

The heat was so bad that the largest lake in Kansas,
our neighborhood "pond"
is now filled with blue green algae

The rains have finally come
but they are too late for the corn fields by my house
Don't worry- the farmers all have federal crop insurance
And we will simply pay more for corn in the winter.
And then we will pay more taxes in the fall to keep
them in corn next year.

I am buying my feed corn for the turkeys now
Wild turkeys often turn to us for feed in the winter
Buying it before the price skyrockets will help us all get
through the winter grays

Like the stock market
buy low, sell high
although I will be "using high".
Just like the stock market
I am not willing to buy corn when the price goes up
Even if they are cute turkeys.

Unaccounted for incidences

My son in law's brother's house burned down yesterday.
A young family
Two children 18 months and 4
Two adults, both working two jobs

A candle left burning when naps were being taken

We all can be caught in unforeseen situations
A fall down the stairs
A fire
A car crash
A sudden death of a friend or family member

How we deal with these things
is part of our fabric

Being retired gives more time to work through them
give the incidence space
and an opportunity to serve.

Moving forward

Finding how to move forward takes time.
Some have found that they are totally prepared for retirement.
They have their hobbies lined up,
their social schedule set,
and jump right in.

That is what all the experts suggest
That was not me.

Retirement came as a jolt to the system.
Overworked, under paid and just tired
along with the full force of menopause
I quit my job
my calling
my everyday living and breathing position.

Last year I did nothing
Literally
Nothing
Lots of sitting and staring out the window.

Picked up a side job or two
but at the end of the day
otherwise nothing

Worried at first
wasting time is not in my family vocabulary

Slowly, the emergence has begun.
Looking around like a kid-
enjoying the squirrels and trees and turkeys

Went to my old school
Helped out a few teachers
Came home and thought
"that is not it".

I am ready to move forward.

Haven't been here in a while.

Feeling more comfortable with the portfolio these days.
Now we are  clearly at a 50/50 split between stock and cash/bonds/CD.
If the non liquid assets were in the mix it would be: 50 non liquid /25/25.


We don't plan on spending any of the above mentioned money. With our current income (which is less than I made as a teacher in the midwest) we are able to save for home improvements, taxes, insurance and trips to see the "children". Our basics are simple. It works for us.


Living expenses vs Savings 


The key is to figure out when you, basically, have enough. By doing this exercise I know that I/we will have enough if: 
1)My husband passes away. Besides missing him terribly, I will not be receiving any of his pension. Currently we live entirely on that pension.
2) The US decides not to honor its pension to retired military (I actually would not be surprised if this happened).
3) The economy collapses as we know it and savings have to sustain us for awhile.


Sustaining ourselves with no outside help would last twenty years at our current spending levels.  45% need/ 55% want. Granted wants include things that are good- travel, entertainment, presents, # of travel vehicles that live at our house.  We could do without those things. 
There is plenty to do here. Gardening, hiking, fishing are all within walking distance of the place.
If inflation took off we could simply cut to the wants  and get by quite nicely.  The only hang up would be property taxes. One never knows where those can end up!


Sometimes I wonder how long we should live this way- not touching the savings.  One thought is that we could take out what my husband would bring in for SS for the next five years. That way we would feel better about just waiting the Social Security out until his actual retirement date at 66.  In turn, if he should pass, I would receive a sum of money until I turn 66 (which is seven years later).


Nah---let it ride as long as possible.  We have saved for some pretty neat stuff already. A long anticipated trip to our honeymoon destination for our 30th anniversary next year. Well, that is, IF I decide that I can tolerate air travel at that point!

A different middle class

Jacob, on Extreme Early Retirement, wrote about the idea of the declining middle class. He argues that it is not really a decline, but a change in priorities. Many who make enough choose to spend more then they have or live on the edge making them appear to be losing their footing with income.

There is a different take that I am beginning to see.  There seems to be a growing group of boomers who make choices early on to be independent of the system.  They save their money.
Choosing to purchase a houses and pay it off in cash, in a low property tax state, is considered smart thinking.  Food is not abused and often supplements to the food supply are grown.  Self powered transportation is more important than gasoline powered. A clothes line often hangs in the back yard. Clothing is evaluated for comfort and utility. Excess is taken to give to others who need it. Public libraries and parks are cherished.

How does this tie into Jacob?
This group of boomers are "off line". Yes, we are- mostly- solidly middle class.  We really don't have to "use" much money so we let it ride. In turn the money does not show up as income or capital gains.  It is just there, making more money.

 Huffington points to our group and says, "they are slipping away into poverty." Only by our taxes are we poor. Are there more of us out there than the "surveyors" think?  Maybe some of those people who appear to be living on social security alone have plenty in the bank. When you get your own savings out of the bank- no one charts it.
 Do people who live on savings get an earned income tax credit?

I asked Jacob if he considered himself middle class.  His answer was yes - and no.  As a fifty something looking at a thirty something - with lots of degrees- my reading of his blog indicates that he feels that he is solidly middle class and not poor.

My husband and I  see ourselves as middle class, but next year we will be "deemed" poor.  A friend of mine is a wealthy widow, but she is "poor" in the eyes of the tax man.

Are we poor or  simply a different, more frugal, more prepared middle class?

Portfolios

According to the "rule of thumb" our portfolio should be about 60% in bond and 40% in equities.  This is something I have worried about. We are heavily in the market right now- about 55%. Where are my bonds? I just don't understand bonds well.
David Laibson spoke at a Merrill Lynch round table on retirement.  He and others hit several things that should be taken into consideration need.

Social Security is a bond
Yes, 75% of the money that is collected by payroll taxes goes straight to the people now retired. What we don't consider is that 25% goes into a lending structure- a bond- for the US government to borrow. At this point the fund has several trillion dollars in waiting.
Thinking of the bond of social security helps me balance out my portfolio.


Is your house a RIET?
We own our home. At this point we are seriously considering lending money to our son for his home and letting him pay his "mortgage" to us.  That is a balance in a portfolio. We actually own the land instead of owning a piece of a an office building.   Yes, we have to have someplace to live. My thoughts are take the lowest price that the houses in the area are selling for and use that as a base. Check Zillow for some assessments.


Look overseas for investment
We are checking our portfolio this weekend.  What is the mix of US and overseas investments? After living in China, we are very skeptical about investing in Chinese companies. US citizens are very nieve about what other government can do.  In my childhood Mexico "reclaimed" all land as their own. That left many Arizona residents without their second home.  It was a shock. They simply said, "It is ours now."  


The same is true with companies.  China is a communist state. If the middle class gets out of alignment, will the government choose to reign them in.  This is not as far fetched as one may think. Many countries could care less about foreign investors.  


What to do? When we look at our portfolio we will be looking at companies who serve overseas.  It ends up that most of those companies are "large cap" companies.  We are heavily invested in the large cap.  We will seriously look at those large caps to make sure they are invested overseas as well as at home.


My final assessment is that our portfolio is much more diverse than we originally thought. Not considering social security or house, here is our real balance:
equities 53%
cash 35%
bonds through retirement plans 12%
With the house the mix turns more like:
 48% house, 27% stocks, 17%cash and 6% bonds. 


My real worry should be more about the cash than stocks. Thinking of our Social Security as a bond helps.

Something I cannot prove

The classrooms of today are filling with autistic children. The rise is dramatic. For the last twenty five years  the numbers have climbed, but the last ten have been astonishing.

Some parents blame vaccines. Could it be something even closer to the child on a daily basis?  How about baby bottles ?  I am serious. How many mommies put their child's plastic liner or plastic bottle in the microwave- just for a second?  Do we really know what is happening when those waves heat the plastic? Now the plastic is melted and the baby drinks it down.  With a unformed immune system, the coating on cells must be interesting to watch, if it were not our grandchildren. 

Doesn't it seem strange to anyone else that autism "arrives" when the brain moves its synapsis to the language center from gross motor at about two? Could that be where the coating is most damaging?

So, grandparents, think about giving your daughter or son glass bottles to feed your grandchildren with. Best yet, encourage breastfeeding at the breast. It may be a long shot, but it is one of the only consistent things I can think of changing in the last twenty years.  

Let it ride

 Twenty years ago I made the mistake of listening to a young broker who had taken over my account from his mother.  He had a wonderful picture of a yacht on the wall in his office and wore an expensive suit.  His mother, the only female broker in the office twenty five years ago, had guided me through some great stock moves.  With baby burp shoulder and children in a  double stroller,  I stopped in to see him. I should have known that my gut was much more in tune with scandal than his.

He hemmed and hawed about the marvelous thing that WorldCom was. Not only should I keep the money in the stock, which had tripled several times over, I should give him my house savings to buy some more.
 I wasn't that foolish, but I did keep my money in.  Four days later it was gone.  We still have a lump sum of capital losses to write off almost ten years later.

Fast forward to today.  I pulled every penny out of the market about three weeks before it crashed two years ago. We have returned most of it back in- starting at 7200.  Today, as the market hit 11000, my stomach began to sour.  I believe the market will stabilize, but staying in becomes risky at this point. My husband is not convinced.  He says stay, in fact lets dump my IRA in.
Tomorrow we will look hard at numbers.

When you buy Ford at 2, do you let it ride?

Thank the Lord the market is closed on the weekends.

Is it a barn or a storage closet?

Barb at Frugal Texas discussed deciding on heirloom or clutter.
We have lived in some exotic places. Add to that my grandfather collected art in the 1930's and 40's. Together they fill part of a barn that desperately needs to be dealt with. There is little question all this stuff influenced our choice of  barn (and the home attached to it).

We probably have twenty boxes that have not been opened since they were packed between fifteen and thirty years ago. Don't laugh! The one with the description of what is inside in Chinese drives me crazy.   Maybe I should sell it as a mystery box.

 Man vs Debt put out a fabulous book on getting rid of your crap. He has loads of ideas on how to sell the stuff.  My problem is back to Barb's...what is a heirloom and what is clutter?  At this point it is all clutter to me since it lives in my barn and not my house.
Then there are my adult children. What is their heirloom?

The easy answer is to call up my children and ask what they want.  Not so simple. My son is in the military and not yet married.  Would his future wife like my grandmother's tea set? My daughter's husband just left the Marines. They have a small child. Shouldn't I be nice and just hold on to pieces while they make their next ten moves before settling?

What happens if our children become nomads like us?  Would we be doing them a favor getting rid of this stuff? Maybe my siblings should be involved in the ridding of the "grandfather" objects.

If you have collected some interesting things, what have you done with it? Please don't tell me scrap books. Those overwhelmed me about five years after my daughter was born!

Maybe I will deal with it when we move, in about ten years.

Budgeting for a fixed income

Simple, isn't it?
Budgeting
You have either been doing it all of your life
or not.
We have, but it has not been precise
A year before retiring we wrote down, in general,
how much we spent.
This is different than how much we thought we would spend.

Categories began to emerge.
First ones are easy:
taxes, travel, food in, food out, gasoline, electricity....
The next categories were a bit more complicated:
Car repair (is an oil change a repair?),
clothing purchases (is that a part of our individual allowances?),
pet fees (we never tracked that one- should we track their food as well?).

Slowly I saw the trends.
The taxes and insurance are far more than I expected.
20% of our budget goes to those.
That is AFTER we paid our mortgage off.
The dogs are another surprising expense.
Even though we cannot see our lives without them
there is a cost to having your furry friend at home.

We spend far more on our adult children than either of our parents ever did.
That is something to process.
Are we giving them too much- and in turn a false sense of security?

When we stopped working full time our gasoline expenses and clothing costs dropped dramatically.
I shouldn't be surprised, but I am.

It is important to continue saving for the end of retirement
so I decided to work part time for that. Substitute teaching.
We are both young.
Most likely I have 45 years and my husband 30 according to
how long our parents lived.

There is a lot to process.
Anyone have a better way of working through it?

The pull of working

My husband and I both quit on the same day

the last day of school 

last school year.

Does anyone else miss work?

The day to day grind is not missed,

but the interaction with my students is.

My father missed "making a deal" when he retired.

Income is not the part that concerns me.

We don't have buckets, but we have plenty.

There is a pull of work for me.

My husband had huge projects lined up.

Most of mine have fizzled.

Not as exciting as I thought.

Going back full time- no way.

I think retirement will take more thought 

than I thought it would.

Fourteen years and moving forward

Wandering the country going to university ended with marrying an Army officer and wandering the world. Fourteen years ago our Army wanders ended and our "settled life" began.
I became the financial person in our house about twenty years ago.
Squirreling away enough to pay half to buy a place when we "got out".
Choosing to sell that wondrous spot just before the market tumbled.
Investing.
Putting a lump down and buying our "farm".
Investing.
Retiring.
Investing.
I see this blog as a chance to view the past while getting ideas for the future.