How To Retire With Enough Money: And How To Know What Enough Is

Teresa Ghilarducci

It is difficult to give a succinct introduction to Teresa Ghilarducci. A labor economist and expert in retirement security, Ghilarducci’s career has included her twenty-five years as a professor of economics at the University of Notre Dame, her two appointments by President Clinton to the Pension Benefit Guaranty Corporatioin advisory board, and her current position as director of the Schwartz Center for Economic Policy Analysis. Dr. Ghilarducci, deeply concerned by the looming retirement crisis, has written How To Retire With Enough Money: And How To Know What Enough Is, a concise, single-sit read of 116 pages.

DIY era of retirement planning: a failure

Retirement in America has a history. The retirement crisis, already in evidence with the number of elderly living in poverty, did not develop without context. Ghilarducci takes a look back to the 1960s until the mid-1990s, a period of time when 75% of full-time American workers retired with a pension plan. Mandatory deductions were made throughout their careers and were supplemented by contributions from employers. The money was invested and managed by professionals, ensuring workers a guaranteed income after retirement.

The 401(k), originally used by high-income earners for a tax break on money set aside for retirement, gained popularity in the late 1990s. Employers found it cheaper to provide 401(k) matching programs than traditional pension plans. Furthermore, risk was shifted from employer to employee. The Do-It-Yourself era of retirement planning had begun, and it depended upon the employee to:

  • voluntarily save
  • have sufficient savvy to find low-risk, low-fee investments
  • keep his/her head through the ups and downs of the market
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New Year’s Resolution for 2016: Build up Core (Personal Finance) Strength

90 seconds into my first plank of 2016

DH = Dear Husband

My new dress

Christmas morning, I opened up DH’s main gift to me – a beautiful dress.


My new dress

We have three daughters, and it’s always a fairly big deal around here when I get a new item of clothing. It’s not something that happens often. “Go try it on!” they urged me.

“Now?” I asked. “You’ll wait?”

There were still several presents under the tree, but gift-opening would be put on hold while I slipped into the downstairs bathroom to try on my new dress. It fit well, but there was no way I was going to model it. “Give me a second!” I yelled, dashing upstairs. The dress comes in at the waist snuggly – a little too snuggly. I have lamented for some time the stubborn presence of my baby-bump-without-a-baby, but this gift was just bringing it into far too sharp a focus. What to do? Four people were waiting for me.


My new dress with “shapewear” now required (ugh!)

I remember as a girl being fascinated by my mother’s girdles. They looked like pieces of medieval armor. I didn’t quite understand why anyone would want to wear them, and I wondered if I would when I was all grown up. “Girdles” of today are much more subtle and sleek than those of my mother’s era. “Shapewear” they’re called – to conjure up images of fitness I suspect – and they do look like something you might see at the gym. But the “shape” here has nothing to do with getting into shape. It has to do with literal shaping – moulding. Squeeze yourself into that thing, and any baby-bump-without-a-baby is obliterated.

When I came down the stairs, ready to model, it was all, “Oooh Mom!” “That looks great!” “Are you going to wear it tonight?” I did wear it Christmas night. And New Year’s Eve too. But I had also formed my resolution: For Christmas of 2016, I will not have to resort to “shapewear” to put on that dress.

My plank-a-day resolution

I have tried in the past to resolve upon regular workouts, but with only limited success. I actually enjoy physical exercise. The “regular” part stumps me. It’s no small deal, in the midst of a busy week, to carve out regular blocks of an hour or two to change, stretch, work-out, cool down, shower. Irregular is the best I can do. But “regular” is what brings results, and therein has been my dilemma.

So what about changing up that block of time? From 1-2 hours down to 2-5 minutes? There is never a day – barring extreme situations like injury or illness – when I can’t put aside a few minutes. It doesn’t matter how busy things get, how tired I am, how bad the weather is . . . It’s always possible to find a few minutes.

And I will. Every day, I will do a plank. Every day. I’m putting that stake in the ground. I’ll start at 2 minutes, but each month, my goal will be to increase by 15 seconds so that by the end of 2016, I’ll be holding a 5-minute daily plank. I’ll still skate, ski, run, cycle, and do cardio-kickboxing – hopefully often. But I’ll do a plank. Every. Day.

Benefits of core strength

While the motive behind my personal plank-a-day resolution is one of vanity, there are loftier reasons to pursue core strength. “Core exercises improve your balance and stability,” according to the Mayo Clinic. “Core exercises train the muscles in your pelvis, lower back, hips and abdomen to work in harmony. This leads to better balance and stability, whether on the playing field or in daily activities. In fact, most sports and other physical activities depend on stable core muscles.”

Core strength in personal finances

DH and I are in the fourth year of our journey out of debt, and we’ve made great progress. Following Dave Ramsey’s steps to a “total money makeover”, we have:

  • paid off our consumer debts ($21,000)
  • paid off our business debt ($81,000)
  • made headway in saving an emergency fund to see us through 6 months of income loss (50% funded)
  • made steady payments against our mortgage ($37,000 down)

We’ve paid a whopping $139,000 off of our original total debt of $257,000. We’ve got $118,000 to go. No problem. We’ve got this, right?

Not quite.

We’re switching gears now. Past the point of putting all of our focus upon debt-repayment, we now require more . . . balance. Short-term savings; emergency savings; investments; mortgage payments; and an increase in giving. I felt more directed and sure when it was all about paying off our consumer and business debts. Intensive focus. Big changes. It was satisfying. Now, our progress is spread out, slower, smaller, and to me at least, less satisfying.

I’ve come to recognize in this journey out of debt how impatient I am. Impatience played a big role in getting us into our debt-ridden state (“I want it NOW!”), and I don’t want it to sabotage the financial health we’ve been building – any more than I want my belly to sabotage my new dress. I need the core strength – the stability and balance – of patience in my approach to our shifted financial goals. Muscles in the human pelvis, lower back, hips and abdomen ideally work in harmony. Efforts towards our savings, investments, mortgage payments, and giving can also progress towards an ideal of harmony. No rush. Slow, steady, progress. Balance. Stability. Just breathe . . . and hold a little longer . . . like a plank.

Do you have any New Year’s resolutions? Do you find it difficult to maintain the balanced steadiness needed to develop core strength in personal finances? Do you wear “shapewear”? Your comments are welcome.

Just a note on planks. 2 minutes is actually a fairly long plank. If you’re just starting to work on core strength, don’t be discouraged if you can only hold a plank for a matter of seconds. Start where your are : ) 

Merry Christmas!

  • DH = Dear Husband
  • DD1 = Dear First Daughter
  • DD2 = Dear Second Daughter
  • DD3 = Dear Third Daughter

I’ll be back next year : )

Christmas time is crazy for us, and there’s no getting around  it. DH is working around the clock as his home business has warped into hyper drive for the Christmas rush. The concept of balance is just that – a concept – with no basis in reality. Life is good – it’s just jam-packed. And so I’m going to bow out of the online world until the New Year.

I’m enjoying DD1’s visit home from the west coast – yay! And I’m looking forward to DD2 joining us at home after she writes her last exam for the semester tonight (yep – an exam Saturday night) – yay! DD3 just started her holidays from her high school – and so did I (I’m a teacher) – yay! There will be visits, shopping, card-writing, gift-wrapping, and baking ahead – as well as preparations to host the big family dinner on the 25th. 23 people this year. I love this stuff! We’re doing it all on a budget, but there’s a large dose of chaos involved, and this is not our most stellar time of year in terms of sticking to it. I’ll report later on how we manage.

I’d like to wish you a wonderful holiday season, and if you celebrate Christmas, I wish you a very merry one : ) See you in 2016!



*Image courtesy of Vicious-Speed via Wikimedia Commons

Judgment In Personal Finance: It’s All Wrong

Irritated by someone’s poor financial management

Last weekend, as I was walking our dog, I found myself thinking of someone I know who has been struggling with her finances since long before I met her. She is a woman who worked with me for a few years, and the last time I happened to see her, money was still an issue. I found myself feeling a judgmental irritation. To me – and to others – it is obvious what she needs to do to improve her financial situation.

The impact of childhood sexual abuse

She was sexually abused as a child. The thought came to me out of nowhere. And it was true. It was something that she had confided in me and that we had discussed many times. An abuse that had lasted for years at the hands of someone in the family. And nothing had been done about it. When she had tried to bring it to light, she was the one who was rejected.

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*Photo courtesy of Sunny

Feeling Gross from Spending (Good sign – I think)

Not the way we planned it. Our dining-room set joins the items to go on Kijiji.

John’s diet and planned “cheat”

I remember my friend and colleague John (who is featured at Fruclassity this week) telling me about a Sunday morning visit to the pancake house with his daughters. He had been following a strict diet for a prolonged period, and this pancake breakfast was a planned cheat. He was looking forward to the indulgence, and he ordered the option that had been his regular choice before he had started his diet. Yum! A stack of pancakes! So different from the apples and cucumbers I’d seen him munching at work.

He couldn’t make it through half of them. They made him feel gross.

Not a nice feeling, but a good sign! It meant that John’s “normal” was changing. The foods that had tempted him all through his life were not so tempting anymore. There wouldn’t be quite so much effort, so much “self-denial” required for him to continue his healthier diet.

Our renovations

Our ongoing (but almost finished) renovations have been the big deal around here lately. To give a bit of context, we’ve been on a focused mission of debt-reduction since June of 2012, and although we have wanted new furniture and new flooring since even before that time, we’ve been on a “diet” – of budgets, tracking, earning extra income, saving, and putting as much against our debt as possible. Our diet did not allow for new furniture and flooring . . . until June of 2015 – when we paid off the last of our $102,000 non-mortgage debt.

Having hit that milestone, we gave ourselves permission to “indulge” – in the form of renovating. DH had long since outgrown his home business office, and for at least a year we’d planned “some day” to switch things up and give him more space.  But it wouldn’t just be a practical move to address needs; it would also be a move towards getting what we wanted. “Some day” had come!

Great! (at first)

Like John and his planned pancake house excursion, I looked forward to this “cheat”. Wooo-hoo! My initial endorphin rush was alarming, but I got it under control. We would go about everything without rush, taking frugal measures along the way. Yes, we would get what we wanted, but we wouldn’t go crazy.

The first several “bites” were delicious! After the practical work of moving DH’s home office to its larger space had been accomplished, we replaced the stained-beyond-reason carpet in his old office with hardwood, and bought furniture for a cozy new living-room (10′ x 10.5′). Here’s how it unfolded:


Stained-beyond-reason carpet from DH’s old office space.


Hardwood in same room.


Cozy little living-room.

The final step was the biggest. Our old family-room, a 17′ x 17′ space, was to become a combined dining-room and sitting room. Carpet was ripped up, hardwood installed, and we bought a new love-seat and two chairs along with an ottoman and tables for the sitting-room part. Here is how it went:


DH’s hardwood installation work in progress.


Sitting-room furnished.

The problem with our dining-room set . . .

We put our dining-room table and chairs in the other half of the combined room . . . and realized it didn’t work. Our table was too wide for the space. The chairs were too fussy and big. Could we put up with it? Like good soldiers of frugality fighting for debt-freedom? No. After devoting so much effort and money (that we’d saved in advance) to this plan, we couldn’t stand the idea of it being not-quite-right. So we’re buying a new dining-room table. I know!

Our old table and chairs are in fine form, and will hopefully fetch a good price on Kijiji. We have picked out a new table – one that is thinner, more rustic, with simple chairs and a bench – and the price is better than we’d thought we’d find. But this is not how we had planned it. This move will bring up our renovation expenses another significant notch. I feel like John must have felt by the time he got to that 3rd or 4th pancake in the stack on his plate. Enough already.

Unlike John, however, I can’t say that I regret the indulgence, and I don’t think we’d do our renovations any differently if we could. The point is, I’m longing for apples and cucumbers again. I’m looking forward to switching our focus back to our mission – to finish saving up our emergency fund and to start our assault against our mortgage. I’m a bit shell-shocked by all of the decision-making we’ve done for big-expense furniture and flooring. I want to get back to things like figuring out ways to come under budget in our groceries.

This is a new sensation for me. And just as John was taken aback by his inability to stomach his “normal” pancake house breakfast, I’m surprised too. But I recognize it as a good sign. “Normal” has changed for me – just as it did for John – and I’m eager to slip back into the patterns of our healthy financial diet.

Have you ever felt gross about spending? Have you ever become aware of a new normal? Your comments are welcome.


7th Semi-Annual Report: $137,000 Down – $120,000 To Go

Rocky and his injured dew claw. One of our expenses these days.

DH = Dear Husband

“Step back for periodic perspective,” I wrote last week. “7 years IS a long time, and you’re more likely to make it to the finish line if you take stock of the milestones you achieve along the way.” Well, it’s time once again for me to “take stock.” We’ve been on our journey out of debt for exactly 3.5 years now. According to our personal finance guru Dave Ramsey, we’re at the average half-way mark.

Our story

Let’s go back to the beginning for a moment. Like the majority of North Americans – perhaps Westerners in general – DH and I considered debt to be a normal part of life. We had a mortgage, car payments, and credit card bills “just like everyone else.” We were gainfully employed with my part-time teaching position and his high-tech career, and we carried our debts very comfortably. Leading up to the turn of the millennium, we bought our big home (which came complete with a big mortgage). We were expecting our third child. And DH lost his job.

What followed was more than a decade of stress. DH went on a 5-year career roller coaster which included 3 well-paid positions . . . with companies that eventually went under in the high-tech bust of the era.  With all of the uncertainty, I returned to teaching full-time. When DH lost heart and decided to make a career shift, we were in for six years of no-man’s-land. Stress turned to distress. Those were miserable years.

In 2009, DH launched what would become a successful home business. Hurray! We were able to live “normally” again! And we did. But it didn’t feel right. “Normal” felt hazardous. We knew something was wrong . . . We just couldn’t put our finger on exactly what it was. In May of 2012, we read Ramsey’s book, The Total Money Makeoverand in June of 2012, we took the first of his steps in our journey out of debt.

Start of June, 2012:  Total Debt = $257, 400
#1 New Car Debt – $8,600
#2 Old Car & Course & Dog Debt – $12,800
#3 Business Debt – $80,800
#4 Mortgage – $155,000
End of November, 2015: Total Debt = $120,100
#1 New Car Debt – $0
#2 Old Car & Course & Dog Debt – $0
#3 Business Debt – $0
#4 Mortgage – $120,100

 A 312% rate of improvement

How wonderful to be able to write all of those zeros! It’s impossible to know where we would be now if we hadn’t read that book and started a focused, intentional debt-reduction, but here is something to consider: We were, as I’ve said, aware that “something was wrong” before June of 2012, and we had started to try to improve our situation. In the year before we officially started our journey out of debt, we conscientiously paid off close to $16,000. In the year after officially starting, we paid off $50,000. Same income. Same expenses. But a 312% improvement. Focused intention works!

A history of our numbers

Our progress hasn’t been steady. There have been big expenses along the way. In 2013, we had to buy a new roof  ($10,000). In that same year of debt-reduction, we had to cut down a rotting tree in our backyard ($2,000), and our dog had surgery for bladder stones ($4,500). Ugh! But even in those situations, there was a silver lining: We did not go into debt to finance these things! We ALWAYS used pay for the big expenses with debt.
Our numbers tell a story, and here they are for our first 3.5 years, broken down into semi-annual totals:
June 1 2012 – June 1 2013
#1 – 26,000
#2 – 24,000
June 1 2013 – June 1 2014
#3 – 16,000
#4 – 12,000
June 1 2014 – June 1 2015
#5 – 22,000
#6 – 23,000
June 1 2014 – today (Nov. 28, 2015)
#7 – 14,300

Current finances: sloppy

Right now, our money is going 3 ways:

  1. Towards big expenses.
  2. Towards paying off our mortgage.
  3. Towards saving up a big emergency fund. (Ramsey’s 3rd step – to cover 3-6 months of income loss.)

Big expenses these days include our renovations to give DH a bigger home office space. We’ve replaced flooring and furniture, and it looks great! I don’t mind expenses like this – especially since we’re spending money we’ve saved. Another big expense is our dog. Poor Rocky broke his dew claw and had to visit the vet. While there, we made arrangements to have some bad teeth removed. Estimate: $1,600. Ugh! That is an expense that I DO mind. (And though we love our dog dearly, I would advise anyone trying to get out of debt NOT to get a pet.) A third big expense is our car. It was scraped in the spring, and now that winter is coming we know we have to get it repaired, or we’re just inviting rust to give it an early death. Estimate: $1,200. Another ugh!

Since we paid off the business debt, we’ve been doubling up on our mortgage payments. Strictly speaking, we shouldn’t be doing that since the official step we’re on now is to save an emergency fund. But we’re so driven to debt-freedom, we can’t quite take our foot off the gas pedal of debt-reduction. We are scheduled to renew our mortgage in February, and our plan is to make June of 2019 our last payment date.

We are making some progress towards an emergency fund, but it’s slow – partly because of our current big expenses, and partly because of our mortgage double-ups. (Ah! Maybe we should reverse them. We can without penalty.)  I would be comfortable writing exactly what we’ve saved, but DH doesn’t want me to. He’s OK with me giving dollar amounts for our debts, but not for our savings. So I’ll just say that we’ve saved 35% of our emergency fund.

There’s a sloppiness to our finances right now that doesn’t sit well with me. I’m eager for the renovations to be done. I’m eager to focus on our emergency fund and bring it up to 100%. I’m eager to begin the regular investments (Ramsey’s 4th step) and mortgage payments that will see us to the finish line – hopefully in 3.5 years from now.

We have passed the half-way mark! We’ve paid off 53% of our original grand total debt. Time to tackle the rest.

Do you find it encouraging to step back and take stock when you’re working towards a long-term goal? Do you think we should reverse our mortgage double-ups to focus on our e-fund? Your comments are welcome.


Debt-Reduction and Anxiety

DH = Dear Husband

Anxiety without a compass

When I was a teenager in the late ’70s and early ’80s, mental health was a taboo subject. Nobody said things like, “I had a bout of depression that year,” or “I avoid that situation because it makes my anxiety spike.” I knew something was “wrong” with me. I was full-on petrified in most social situations, and public speaking put me into an absolute panic. Other people didn’t seem to experience the tension that I carried with me almost constantly, and I felt utterly alone in it. I didn’t have the language to define what I was going through, and efforts to talk about it met with responses like “Everyone feels nervous when they have to give speeches,” or “All you need to do is smile,” or “Oh, you’ll get over it when you’re older.”

Not true. What the passage of time allowed me to do was to develop coping strategies. I had my strategies for social gatherings – like going to the periphery of the room and finding one or two other people to talk to. And I had my strategies for public speaking – like prepare, prepare, prepare, and practice, practice, practice. But as the years went by, the culture changed. Mental health issues came out of the closet, and words like “anxiety” were spoken with intelligence, respect, and compassion. For me, it meant that I could talk with some people about what I experienced – a select few – without being subjected to platitudes.


In 2012, when I read Susan Cain’s book Quiet: The Power Of Introverts In A World That Can’t Stop Talking, it was like receiving manna from heaven. I devoured those pages – those words that described situations my teen self thought she was alone in living. Although I had come a long way by the time that book was published, it was still an incredibly cathartic read. Cain gave context to the prevalence of anxiety, which became more and more widespread as Western society changed from agrarian to urban. People’s social circles expanded and changed as they moved from the farm to the city. Public speaking was a must as people had to “sell themselves” to get jobs, connections, opportunities. Personality became more important than character. Extroverts flourished in this societal shift. Introverts often faked it or withdrew.

I could go on and on about Cain’s book, but I won’t. I’ll just say that I think everyone should read it – extroverts as well as introverts. Cain did a great TED talk, and it’s well worth a listen. There. I’ll stop.

Anxiety and debt

My point in taking this look at anxiety is that I believe it plays a part in many people’s problems with debt.

Anxious to fit in = susceptible to marketing

It’s generally accepted that everyone wants to belong. Marketers, who are extremely good at tapping into human longings, use the “belonging” angle to sell. Keep your eyes open for it and you’ll see it everywhere – in ads for travel, for clothing, for the latest tech innovation . . . “If you buy this, you will be loved,” is the implicit message. Or “Once you have this, you’ll be accepted.”  Introverts who are anxious provide fertile ground for that kind of marketing. We hate feeling isolated. We want to belong. So we’ll buy it – and finally be one of the cool kids!

Anxious about options = susceptible to confusion

In Quiet, Cain mentions a study in which 4-month old babies were subjected to stimuli like noises and flashing lights. The babies were divided into two groups: those who responded placidly, and those who reacted with sudden movement – like twitching legs and pumping fists. Guess which ones turned out to be introverts? The fist-pumpers. Extroverts are more comfortable with a bombardment of stimuli. Introverts are sensitive to it and feel an alarm. When we’re subjected to a range of financial advice – some coming from banks and credit card companies, some coming from financial planners, some coming from “experts” in the media, and some coming from friends and family – we get overwhelmed. There’s a chaos, and it all blends into an obnoxious, noisy mix. So when really good advice comes our way, we don’t recognize it. It’s just more white noise, and we block it out to keep our peace.

Anxious & overwhelmed = susceptible to emotional purchases

Last week, Shannon Ryan from The Heavy Purse wrote the post “7 Emotions and Their Affect On Your Finances.” Everyone experiences feelings, but there’s an intensity inherent to anxiety that makes emotions particularly powerful. Purchasing as emotional self-medication is a popular addiction these days. Feeling stressed from a tough week at work? Go out for dinner to relax and unwind. You need to take care of yourself! 

Anxious to make things right = impatience

DH and I started our journey out of debt in June of 2012 after reading Dave Ramsey’s The Total Money Makeover. That book broke through the white noise of my financial confusion, and once I got the message, I was psyched to get out of debt. One of the things Ramsey said was that solving your financial troubles had almost nothing to do with your money. I didn’t believe it for a minute, but once we started our journey out of debt, I came up against a recurring obstacle that had nothing to do with money: my impatience. Anxiety screams, “The problem has to be fixed NOW!” But it takes the average household 7 years to go through all of Ramsey’s steps to financial health. “7 years? Ugh!” And it’s not a smooth ride. All along the way there are roadblocks, like unexpected expenses, and they test your patience every time. 7 years is a long time for anyone. For a person with anxiety, it’s an eternity.

Navigating anxiety and finances – with a compass and light

If you recognize yourself in this post, here is what I recommend:

  1. Read Susan Cain’s book, Quiet. There is nothing more effective in bringing about change in your life than self-knowledge. Shine a light on your anxiety by learning about it. Knowledge is power, and it will equip you to navigate your path with much greater confidence.
  2. Find a personal finance guru and stick to his/her plan towards financial health. Mine is Ramsey. I know someone else whose guru is Gail Vaz-Oxlade. Find an expert who cuts through the “white noise” of your own financial confusion. You’re under no obligation to read up on every expert out there. Find the one who speaks to you, and move forward. Clarity is a fabulous antidote to anxiety.
  3. Develop an awareness of your vulnerabilities as you take what will be many, many steps towards financial health. Emotional turbulence? Impatience? Recognize it for what it is as it’s happening; challenge yourself to say “Not now,” in response to any desire to buy that might come out of a vulnerable moment; watch it pass. I promise you, the “Not now,” part becomes easier and easier with practice. (“Not now” is way more effective than “No” – “No” tends to invite rebellion.)
  4. Step back for periodic perspective. 7 years IS a long time, and you’re more likely to make it to the finish line if you take stock of the milestones you achieve along the way.

Do you think that introverts and extroverts face different challenges in making their way out of debt? Do you recognize anxiety in yourself or in someone you know? Your comments are welcome.


Paris, France: November 13, 2015

The French flag

I sat down at my computer this morning to write a post, but my fingers were paralyzed over the keyboard. The attacks in Paris yesterday, which left 129 dead and hundreds more injured, had left me numb. They were “soft targets” – a concert venue, cafés, bars, restaurants, a sports stadium. The victims were civilians – teens and twenty-somethings out for a rock concert. Working people kicking back with friends over a drink and a meal, ready to welcome the week-end. Families running errands at the mall.

The sick, cowardly hatred behind these co-ordinated terrorist attacks set off such shock-waves of anger and sadness that paralysis is, I suspect, the outward face of this day for many. There’s a sense of deflating hope. Deflating momentum. If it can all be taken away with one gullible sucker of a suicide bomber, what’s the point, right?

But that’s just the way the dark side wants us to feel. And I don’t want the dark side to win.

Let sadness be turned to love. It is unthinkable how many people in Paris today are coping with the devastating loss of daughters and sons and sweet-hearts and parents and siblings and friends and colleagues. It is true that not one of us is guaranteed another day with our loved ones. Make sure they know they are loved.

Let fear be turned to spiritual peace. There was nothing the victims could have done to protect themselves. The randomness of the assault made it inescapable. It is true that the possibility of death, though highly unlikely for most of us on any given day, is nevertheless ever-present. Make your peace with it.

Let hatred be turned to wisdom. I can easily imagine the backlash against Muslims that might happen in Paris in the days ahead. Even against those who have spoken out in horrified disgust against yesterday’s brutality and who would have given their lives to save the victims if they could have. It is true that there are twisted people who are capable of enormous evil in our midst – of all backgrounds and belief systems – who portray themselves convincingly as harmless. Avoid simplistic, broad-brush scapegoating. Get humble and real about your own dark side, and allow a vigilant awareness to develop.

Let paralysis be turned to purpose. I’m sure there are many in Paris who weren’t able to get up out of bed to face the day today. In the silence after the gunfire and bomb explosions, there are insidious whisperings of futility. How many dreams for the future were dashed in a matter of hours yesterday? How much accomplishment was blasted away in a few moments? It is true that no outcome for any effort is guaranteed. So be motivated by what is greater than the outcome. Be motivated by the underlying principles of your goals. They are impervious to criminal insanity. They are eternal.

Let cynicism be turned to outreach. There is a highly effective recruitment machine at work – with the specific target of disaffected young men in need of validation, a sense of significance, and a father figure. The minds behind this machine tap into screaming needs of seekers with a promise to offer “the answer”. Purpose. Power. Paradise. As far as we know, eight such seekers gave their lives to the cause of Friday’s destruction in Paris. It is true that there are daunting, seemingly limitless social needs in our world. And arguably, their most disturbing expression is in the form of violence at the hands of brain-washed, manipulated young men. As parents, grand-parents, aunts, uncles, community members and leaders – let’s face these desperate needs head-on and work constructively towards their fulfillment.

“Darkness cannot drive out darkness: only light can do that.”

Love and healing, comfort and strength to the people of France. Que Dieu soit avec vous dans votre détresse.

Our First Investment Event & We’re Not on the Same Page

Giving Murray’s investment visual: “That is death!’

DH = Dear Husband

(Just to let you know, I didn’t write this post to advertise Nick Murray or Investors Group. DH and I attended an IG event at which Murray spoke this past week, and I’m sharing my understanding of his advice as well as the way it is impacting our journey towards debt-freedom and financial freedom. I’m not advertising Dave Ramsey either. His debt-reduction plan is the one we’ve been following for over 3 years, so I make frequent reference to it. But no kick-backs for me in either case.)

Our first financial planning event

DH belongs to a network group of self-employed men and women, and besides meeting once per week, they try to support each other’s businesses. The financial planner in the group, who knows that DH and I are interested in upping our investments soon, invited us to an Investors Group event at which an eminent financial planner was to speak. It would be the first financial planning function that we had ever attended.

We went on Thursday evening, dressed in casual jeans, and were rather surprised to find a room full of people in suits. “Those must be all of the financial planners,” DH surmised. If so, there sure were a lot of them. Most of the audience consisted of people older than we are – late 50s to early 70s and higher – with a few spiffy looking young people interspersed here and there.


Murray’s advice

The man of the hour, Nick Murray, was indeed impressive, with both the credentials and the powerful presence to command everyone’s respect. He spoke slowly, emphatically, and with dry, dry humour. Generally level and unhurried, he would occasionally belt out a point he wanted to drive home. Here are the 3 basic guiding principles for investing that he presented:

  1. We have longer life-spans than ever, and they’re getting longer. 50 years ago, retirement was a relatively brief period of time that lasted between the end of a career at age 65 and death at age 72. The average North American today retires at age 62. And the average North American couple retiring today is expected to have at least one in the partnership living until 91. Door #1: Your money will outlive your life. Door #2: You will outlive your money. Set yourself up so that you walk through Door #1.
  2. There is a very common, very wrong piece of advice floating around out there: As you approach retirement, change your investment portfolio so that it includes more “safe” investments, like bonds, and fewer stocks since they are more prone to the volatility of the market. “This is death!” yelled Murray. And he offered the right piece of advice: Keep your investments in dividend yielding stocks. Why? Because if you go “safe”, you’re essentially going fixed-income, and you’re setting yourself up for poverty in old age as the cost of living keeps going higher and higher through the 3 decades of your retirement. But if you stay invested in stocks, although there will be yearly volatility, there will also be an average growth that consistently outpaces the rising cost of living.
  3. Don’t panic when the downswings happen. When you hear, “This time, it’s different,” remember it’s not. Historically, and without exception, people stay ahead of the rising cost of living when they have a well-managed, diversified stock portfolio. “Diversification means,” said Murray, “that you’ll never get rich overnight when a company’s stock price suddenly soars. And you’ll never lose your fortune overnight when a company’s stock price suddenly plunges.”

“That is death” visual

Murray’s “That is death!” point was the one point he really wanted to drive home, and he provided a visual to reinforce it. Starting with the left arm bent at the elbow, forearm going straight across his rib cage, parallel with the floor, he said, “This is your fixed income.” Bringing the right arm into play,  he placed his elbow at the fingertips of his left hand and brought his right hand up to form a 45 degree angle (as I demonstrate above). “And this is your rising cost of living,” he explained. “That is death!”

My question: Debt-payoff or investment?

During the Question and Answer segment of the evening Thursday night, I braved a question. “If we have debt, would you advise us to lean towards paying it off or towards investing.” Murray responded with grace. “That’s a good question,” he said. “I would say it depends upon the debt. If you have a high interest credit card debt, for heaven’s sake, pay it off. But if you have a low interest mortgage of 3% and your average returns on dividends run around 5 or 6%, it makes more sense to invest – unless having a mortgage is really bothering you.” I wanted to say, “But Dave Ramsey says …” but I didn’t.

Impact upon our situation? Not on the same page

DH and I have been on a journey out of debt for the past 3 and a half years, and we’ve been on the same page in following the steps Dave Ramsey outlines in his book The Total Money Makeover. Having paid off all non-mortgage debt ($102,000), we’re now saving an emergency fund. The next step, according to Ramsey, will be to pay off the mortgage as aggressively as possible while investing 15% of our gross income. Our mortgage is now down to $120,000, and I’m fixed on the goal of having it paid off by June of 2019.

I’m committed to Ramsey’s plan. And having listened to Murray’s advice, I’m in favour of investing in dividend yielding stocks that will help see us through what will hopefully be decades of retirement, despite the rising cost of living. I say “help” see us through because, besides DH already having a small portfolio from his high tech days, we have my teacher’s pension ahead of us. We’ll be pretty well set up with that, but of course we want to be better set up, and of course DH wants to bring new life to his small portfolio.

He’s not so sure about prioritizing the emergency fund now. He’s not so sure about prioritizing the mortgage in a few months. He feels the waste of too little investing when times were good. And the waste of no investing after the high tech bust of the early 2000s. At this point, gainfully employed in his home business for over 6 years, having paid off his business debt, and having attended this IG event, he’s chomping at the bit to invest. Now.

So there it is. Ramsey’s plan has worked wonders for us over the past 3.5 years, and I’m committed to it from this point forward too. DH isn’t. We won’t be making any decisions immediately. We’re in the midst of renovations, and any week now, DH will be doubly swamped with the Christmas rush. But once the dust settles, we’ll be taking action. I’m dreading the possibility of locked horns on this issue. I feel really strongly about staying the course. I’ll keep you posted.

What do you think? Should we keep following Ramsey’s plan? Or should we make investing the priority now? Your comments (and advice) are welcome.



Frugality & Mindfulness (which isn’t always frugal) in Our Renovations

  • DH = Dear husband
  • DD3 = Dear third daughter

See that floor up there? I wondered at first what the square thing in the middle was. It’s the reflection of the room’s window. The floor is so shiny, it reflects things! Isn’t that a whole lot better than what we had before?


(I have to say it again because it’s so embarrassing: we didn’t realize how disgusting DH’s office carpet had become until after we had moved out all of his business furniture and equipment.)

Renovations while trying to become debt-free?

“Aren’t you trying to get out of debt?” asked a friend’s daughter when she overheard me talking with her mom about our renovations. It’s a good question, and here’s a recap of why we’re doing it now:

  • The room above had become too small to hold the paraphernalia of DH’s business.
  • Our combined living room and dining room area – more than twice the size of his old office – had become a storage area for his business.
  • We decided to let this larger space become his office.
  • His old office would become our new living room.
  • Our old family room would become our new combined dining room/sitting room.
  • In June, after the first three years of our journey out of debt, we finished paying off all $102,000 of our non-mortgage debt, so we have allowed ourselves a few “extravagances.” This renovation project is one of them.

The theory of relativity (of frugality)

I’ve come to the conclusion that frugality is relative. Are we being frugal with our renovations? Relative to early-financial-freedom badasses like Mr. Money Mustache (who retired at 30) and The Frugalwoods (who will be retiring at 33)? No. Relative to other people on our street? Yes. But I’ve also come to the conclusion that the answer to questions like these don’t matter. The question that matters is this one: Are we being frugal with our renovations relative to ourselves? How are we doing with our spending now in comparison with how we would have done things in our pre-money-smart days of growing debt?

Spending money saved vs. spending on credit

In the old days? We would not have set money aside in advance. We would have bought with our Visa, and if we hadn’t been able to pay off our card at the end of the month (and for October, we wouldn’t have), we’d have extended our line of credit.

As it is, we are not financing these renovations with debt. Any flooring we install, any furniture we buy, any electrical work we do is being purchased with money on hand. I taught summer school through both July and August of this year, and every cent of my pay went into our renovation account. All money earned from our garage sale and Kijiji sales went into that account. We’ve added different “slush” amounts to it each month since June too. We’re spending money we’ve earmarked for this project. Pass!

Taking our time vs. buying on impulse

We first decided upon this plan of action for our house over a year ago. In the old days, we would have followed through within several months of making the decision.

For flooring,

  • We would have gone with our first thought of hiring a contractor to install it.

For our new living room,

  • We would have ordered the cool hardwood-and-industrial-metal end-table on the spot.
  • We would have bought the small leather sectional sofa within days of seeing it.
  • We would have ordered the rugged cube ottomans, that with a flip of the top turn into mini-tables, on the spot.

For our new combined dining room/sitting room,

  • We would have ordered the gorgeous red Italian leather love-seat within days of seeing it.

As it is,

  • DH is installing the hardwood himself. Using a nail-gun borrowed from one friend and a table-saw borrowed from another, he spent last week-end putting in the floor you see above. Over the next few weekends, he’ll be installing the much larger floor space of what will be our dining room/sitting room.
  • Instead of ordering that amazing end-table on the spot, we kept looking. Our living room, we considered, was going to be a casual hang-out place – one that would be heavily used by the teenagers in our lives. Did our living room end-table have to be that spectacular? No. We bought one for a quarter of the price at a less expensive store.
  • We decided, for the same reason, that there was no call for leather furniture in the new living room. We bought fabric sectional sofa/pull-out bed for half the price.

These decisions taken together add up to $2,800 not spent. Pass!

Mindful splurges

I didn’t cover everything in that last bit. What about those rugged ottomans that turn into mini-tables? They were well over twice the price of the Wal-Mart version. We didn’t order them on the spot – as we would have in our debt-ridden days. But that doesn’t mean we’re not going to. Again, our new living room is going to get heavy use – by teens. Rugged will be good. After thinking about it, we’re going to order them.

And the red leather love-seat? We saw it when we first started to look around in May, and it sang angel music to us. It was the right small size we needed. It was the right red accent. It was perfect to sit in. And SO expensive. We’ve seen many love-seats since then, but when we saw this red one again yesterday, it sang the same song it had five months ago. It is the one. And it was on sale. Still expensive, but $500 less than it would have been in May. We ordered it.

Is this another Pass! – or is it a Fail? On the one hand, our combined dining room/sitting room is going to be our “nice” room, so we really do want it to look good. Also, we might move out of our house and get a smaller one once DH retires from his business in the next five to ten years. This love-seat is one we’d be able to keep through that transition for the long term. And we’re paying with money we’ve saved. So Pass! right?

On the other hand, in no way are these purchases – especially the love-seat – frugal. Despite the “savings” of $500, we could easily have found another one for half the price. But not one that sang to us. Hmmmm…? Is this a case of endorphins taking over? I don’t think so. We definitely got that brain rush in May when we first saw it, but five months later, it was more a case of – “OK, this is just a GREAT piece of furniture, and we haven’t found another one that comes close.” Is this a case of shallow materialism? Again, I don’t think so.  It would be a lie to say we ordered the love-seat just because it’s functional and comfortable. Aesthetics came into play big time. But I think that’s OK. I think it’s OK to get pleasure out of beautiful things. And I think it’s OK to allow spending to reflect taste – within the boundaries of budget and savings.

I feel like I’m confessing!  

Well, you can decide upon the Pass! or Fail of our mindful splurges in this renovation project, but I wouldn’t reverse any of our decisions to date. We’ve saved up; we’ve taken our time, reconsidering initial thoughts about everything; we’ve been mindful of each step. DH’s new office is so much more functional than the former space he used, and it looks like a techie’s space-aged dream. Our new living room is a warm, casual space that is rugged enough to withstand the heavy use it is already getting. (DD3 had two friends over to sleep in it Friday night, and she says it’s the first sleep-over of many in that room.) Our new dining room/sitting room will be inviting. With the TV out of the way, it will be a place for people to read, to visit, to eat. It will be set up so that whoever is working in the kitchen (usually me), will be able join the conversation easily. And it will be flexible enough so that when the big dinners happen, the table can be extended and the small sitting furniture rearranged to make way for it. And in the quieter times, it will just beckon. And if you listen closely enough, you’ll hear that song.

 Did we Pass! or Fail on that love-seat? Have you ever made what you might call a “mindful splurge”? Your comments are welcome.