I am taking a break from inundating you with market and economic news to touch base on a subject that I believe is just as, if not more important, to your financial, emotional and physical health.
We all know who Tiger Woods is and now we know that he is not perfect. However, unlike you and me, his mistakes are front page, Internet and TV news. Honestly, it is quite hard for me to understand how someone with his talent, and net worth and supposedly picture-perfect family, could do things that would jeopardize all of it. Ironically, the Nike “Just Do It!” theme may have been Tiger’s problem.
Tiger’s transgressions are now open to public scrutiny, and he is forced to address them. Whereas our transgressions are private and many of us don’t want to share them out of embarrassment or guilt.
Throughout the years I have met with clients and other individuals referred by clients who tell me stories such as:
- A grown daughter convinces her Dad to co-sign on her student loans and her mother (who suffers from Alzheimer disease and is now in a nursing home) to co-sign on a car loan. The amount of these loans is over $160,000, and the daughter has no college degree to show for it. Unfortunately, she enjoyed spending some of the money on big screen TVs, travel and other luxuries, and now her and her parents may be facing bankruptcy. This issue came to a head when this woman asked her brother if she could park her car in his garage to help her avoid it being repossessed. The brother, who is a client, told her no and promptly called me to schedule a meeting to discuss her situation. I don’t know what the eventual outcome will be. What I can tell you is that I gave the woman and her husband material to read and referred them to a Dave Ramsey certified budget consultant. Either they take steps to make things right, or their next appointment is with a bankruptcy attorney. The very sad part of this story is that this woman’s financial irresponsibility has negatively impacted her parents, and she and her husband admitted that they are passing on their bad behavior to their kids.
- A retired couple had been requesting additional withdrawals from their retirement funds, well in excess of what we had originally planned for. Finally, after several years of this, they came into my office to reveal why this was occurring. They were financially supporting or should I say smothering their twins (man and woman in their 30’s). After getting a lay of the land, we scheduled a meeting the next night with the parents and the kids. The goal of the meeting was to let the kids know that they were bankrupting their parents by relying on them and not being financially and emotionally independent. This was several months ago. From what I know, the parents have taken aggressive cost cutting steps and are letting the kids create their own destiny versus relying them.
- Just yesterday I met with a professional who runs a counseling practice. He was extremely frustrated because his income was down due to the recession, and he felt that he may be better off retiring. This would be a tough move for this professional since he truly loves his vocation and is extremely good. Upon reviewing his profit and loss numbers, it appeared that his social security benefits would be $36,000 less than what he was currently earning in a bad economic environment. Upon further discussion, we uncovered that he and his wife are on track to be completely debt-free in four years, while continuing to add to their retirement accounts. In addition, he now has time to not only review his business model and possibly make it into a saleable practice, and he has found several other creative and income-producing alternatives that he may consider upon retiring. At the end of our meeting it was quite obvious that retiring currently was not a wise move. He is much better off than he originally thought, and his initial reaction was emotional and not rational. By stopping, thinking and gaining some outside perspective, he was able to rewire his thinking and move forward with a much more positive mind set.
I listed just three out of hundreds of examples I could have pulled from to make the point that the “Just Do It” theme may be great if you need to start jogging, eating better, getting additional training or an advanced degree. However, in our overly-stimulated and instant self-gratification society, it can be lethal to your health – financial – emotional – physical and relational. If we as parents and grandparents don’t start living responsibly in all aspects of our lives, we will only be imprinting our kids and grandkids with the same bad habits and setting them up for failure.
Does this subject have anything to do with the stock market or the value of your IRA or 401(k)? Indirectly, yes! By reacting emotionally, irresponsibly and irrationally, we are prone to make impulse decisions (e.g., shopping sprees to cheer us or our kids up) that leave us saddled with debt, and doesn’t address the issue they or we are facing.
I can see inklings of this problem at home. My oldest son (turning 9 next month) recently came home from school quite upset because it was “game day,” and all the other boys brought a Nintendo DS, and he felt left out since he didn’t have one. In addition, he really wants a laptop computer and a “flat screen” TV for his room. I waited for the proper moment and discussed these issues with him and why none of these items define who he is, and why mom and I are not going buy them for him. As a matter of fact, he nor his brother or sister currently have or will have a computer or TV in their room anytime soon, if ever.
A close friend and client recommended the book “Strong Fathers, Strong Daughters – 10 Secrets Every Father Should Know” by Meg Meeker, M.D. and author of “Boys Should Be Boys.” Bottom line, many aspects of our society are anti-family and project values that are counter to our beliefs and harmful to our kids. As such, we must step in and take the time to talk with and educate them so they can make good decisions on their own, because we won’t always be around.
I am sorry if this is a lengthy and non-economic message. However, I have heard innumerable stories of parents and grandparents being financially and emotionally drained by their kids. The common denominator in all these stories is that at some point the parents took their eye off their kids. Whatever the case may be, if we don’t take our roles seriously and give a dose of “tough love” now, we may never recover from the damages to not only our finances, but our family’s dynamic and the future of our kids and grandkids.
If you, your kids, or someone close to you is facing serious economic problems, please let us know. We can talk with them and at least offer them or you resources that may help. There are no guarantees in life; however, we may be able to get those individuals to stop, think and change their behavior. As the old saying goes, “Doing the same thing over and over again and expecting a different outcome is the definition of insanity.” Why live in, be a part of, or pass on insane financial behavior when we can take steps to stop it now! Please contact the office if either I or my staff can be of help.
Quotes
“When you commit to live authentically, the curtains will open wide for you. There will be no more hiding backstage in the shadows.”
Corrie Woods, author and life coach
“The best things in life aren’t things.”
Ann Landers, advice columnist
“Difficulties are things that show what men are.”
Epictetus, Greek Philosopher
Tony Moeller, President
Integrity Investment Advisors
12721 Metcalf, #202
Overland Park, KS 66213
tmoeller@iia-kc.com
913-897-2074
The information listed in this commentary is a compilation of various publicly available sources and is for informational purposes only. It is not a recommendation or solicitation of any particular investment or strategy. A risk of loss is involved with investments in the stock and bond markets.
If you enjoy the commentary and believe others may benefit or find it of interest, please feel free to forward it on. Also, interested individuals can contact us, and we will be happy to add them to our mailing list.
