Buy, Hold and Pray: Financial Model or Pandora’s Box
I received my final payment this month from the terrific broker who bought my “book of business”—a welcome and regular check that was always tucked inside a Thank You note, so classy and appreciated. Now a year after my retirement, I hope my former clients have experienced an equally good fortune at arriving at such a safe harbor.
Although I remain friendly and often chat with many clients, I’ve physically shredded and mentally erased their financial data and investment choices. It’s taken a year to truly step back and let go—a difficult transition—surprisingly harder than the empty nest void when my kids took off. Once a mommy, always…. But one’s work persona can swiftly evaporate with a role reversal due to axing or ageing.
Along with my sharp transition to jobless and clientless, I’m also shorn of my earnings. No more do I enjoy that pleasurable sigh as I scanned the lovely blip in my bank account and totted up my monthly direct deposit. As an independent contractor the jolt of lost income is not as abrupt as the amputation of a salary—my numbers fluctuated until mounting up at year end. Now, however, it’s all downhill—a phrase that melts into a new mathematical formula; no more money coming in means a minus sign of huge proportions after so many years of small but continuous gains.
Fortunately for me, I have cash available for the “near term” as we say in financial-ese. With the constant market gyrations, this is not the time to tap into my retirement accounts. Just like that old saw: “Life got in the way while I was making other plans!” The market went the wrong way as I was planning how best to use the growing “excess” in my net worth… choices I no longer need consider; decisions I don’t expect to have again soon.
Instead, I find myself in the last stage of my “buy, hold and pray” strategy that worked for over 30 years. I watch my “bottom line” slowly round down. I’m not scared, but I am cautious. The regular but thin cushion of social security only heightens the knowledge that its slim coverage won’t offset the inevitability of taxes, utilities, insurance, groceries and…. all the other stuff of daily living. Yes, my assets are adequate, the market will certainly rebound and I’m excited about possible (paid) part time endeavors. But I’m paring down costs and considering other options… just in case.
So many life transitions are unplanned—illness, death, job loss, new baby. But anticipated or serendipitous, all changes relate to money—the financial component of our personal Pandora’s box of hope, fears, ills and errors. I meet the single moms who constantly juggle their numbers plugging in child support and subtracting health care. I hear the dismay of retirees pitting a possible home sale against long term care premiums. All life changes involve lifestyle choices, and most come with dollar signs.
The winning equation is to never stop saving—even when we must begin spending. Now is the time to separate real needs from our usual “wants.” Any new financial model is harder to cope with than outward signs of change from wrinkles to waistlines. More than we admit, money is at the root of our inner selves; it is a strong judgment of who we are.