Famous Last Words

Welcome to Mr. Stillman's opus about spokeswoman John still would've Jonas talk about famous last words you know I I have questionable friends and their background and I know some people whose famous last words were all watch this and you don't want your last words in life to be hey y'all watch this you know my favorite example of famous last words was one of the engineers are. I think the main engineer who built the Titanic, said very famously.

Even God himself could not sink the ship. That's one of my favorite historical quotes of all time is no accounting for icebergs that write in the financial world. There are quite a few phrases that you don't want to be your famous last words either and we just throw a few out there for you Jon. I told myself a few years ago that I get out of the market. If I ever recovered what I lost in 2008 and now I think I'll just keep doing what I'm doing yeah well this is a pretty common mindset when the last market crash is still fresh in your mind. It's really easy to say, all right, well let's recover from this. And then were going to never put ourselves in this position again and then as time goes by market cycles being what they are. You have a few good years you get a taste of investing being fun again and suddenly you say well you know we can get just a little bit more out of this we get another year or so of good market growth. Let's not pull back the reins just yet, which, while it might be the right answer. The problem with this approach is that your plan is constantly changing. Right. So your plan when that the last crashes fresh in your mind.

You have a plan that very clearly indicates artwork and get back your losses them or get out now, you've abandoned that plan to say I will. Let's get some more growth and not worry as much about the next crash because it's not as fresh in your mind.

That's not an actual investment plan.

That's just letting your emotions dictate how your investing at any given moment, if you have a plan that actually dictates that it's what you would call by discipline or sell discipline in the investing world when and why are we going to buy and sell and is not going to be based on emotion like well you know that crash is still pretty fresh in my mind and we go through it again or that seemed like a long time ago will probably be fine.

That's letting a motion dictate your decision making and that's not good. Okay, talk about famous last words on today's edition of Mr. Stillman's opus and John, how about I like the security of keeping my money in cash because I know at least I won't lose it or can those be famous last words. Well it's true that you not going to lose money sitting in the bank as long as it's not in the Bailey Savings and Loan from it's a wonderful life and everybody's making a run on the bank is not here at Jerry's house and it Ron's house and will foreclose on the mark.

In today's day and time with FDIC protection of the money in the bank.

Yes, you're not going to quote unquote lose money right exiting the bank.

However, you do need to be aware of the fact that you're losing money relative to inflation, you're losing buying power without losing money safely. Your principles protected, but that $50,000 that you have sitting in the bank is worth two or 3% less next year. The interest rate that you're getting on that money is not keeping up with inflation.

And so you just need to be aware of the fact that yes while you're not losing principal you are losing buying power.

So we have people say well, I've kept my money in cash for 20 years, you know, if you retire at 65 and keep all your money in cash because you don't want to lose it well. Suddenly you'll find that the 3000 a month of the 5000 month or whatever it wasn't you were taking out to pay the bills once you're in your 80s, you can't buy the same amount of stuff for $5000 that you could in your 60s. It cost more and so the idea of not losing your money because it's in cash comes a little bit problematic because you have lost buying power and now suddenly the budget that you had for yourself for the rest of your life doesn't quite work out that can be the financial equivalent pay all watch this hey hey y'all watch watch my money lose its value or its buying power.

How about nobody. My family has lived past 75 so I'm not really planning to live a long time either.

Yeah boy that doesn't sound good.

Well, so the worst example I've seen of this was I had a lady tell me if she was in her early 60s.

And you know I was putting together an income plan for her to live to 85 are beyond and she say no known then I just don't have that kind of longevity in my family. My dad died when he was 68. My mom died when she was 65. We just don't have longevity in my family so okay what will why did your parents die so young. Well, my mom had ovarian cancer and she died in her mid 60s. My dad was a pilot and he crashed his plane into a mountain sit well. These are not exactly genetic conditions that are probably going to be passed on to you. The pilot thing, certainly not the ovarian cancer. Maybe. But your mom dying at 6524 years ago is a little bit different from what happens if you end up with ovarian cancer. Now medicine and technology have changed just a little bit so we can't say. Well my parents died young.

I'm probably going to die young to and then plan around that you know if you want to say I want to come to front load my fun money in retirement.

I want to be sure that I'm doing my traveling in the early years of retirement because I don't know how long I'll be around, that's fine.

But we don't want an income plan where you can't pay the bills. If you live to be 80 that's bad planning and so if you want to frontload fund money. That's one thing we can't frontload your monthly income needs that needs to last a lifetime. No matter how long you live. Okay, what would you say to the person who says I won't ever go into the nursing home. I'd rather just be put out of my misery, but have to end up there yet and I don't know if people are joking or trying to be cute.

I don't understand exactly what they mean when they say this, let me do they expect somebody to go shoot grandpa exam because he has to go to the nursing alike. What are you thinking is going to happen at this stage, so a lot of people say I will and maybe as a defense mechanism.

Well, I'm just not going to the nursing home. I'll just starve myself to death or what ever it is. Before I end up having to do that and you know to some extent.

I guess you can do that. My grandmother was dead set on dying at home in her house and she did. She barely ate for the last year of her life she drink ensure and eight Hershey's kisses for the last 12 to 14 months of her life range combination so they like chocolate but most people aren't really going to be in control of that in the fact of the matter is usually by the time you're old enough to need nursing home care. Your kids are probably making a lot of the decisions for you. Most people don't go check themselves in the long-term care facilities.

It's usually the kids taking care of it for them and let me tell you, your kids are going to want to take care of you. So you can't just say, well, whatever.

I'll be fine. The kids are going to want what's best for you. In almost all cases. I'm sure there are exceptions, but you have to be thinking about the fact that you want to put them in a very difficult position because you think, well, I'll just avoid the nursing home ads not my cup of tea.

That's really not realistic in most cases now that doesn't mean you have to go run out and buy long-term care insurance. That's not the only solution that's one solution that could be one of a couple of solutions that you have.

You need to have a plan for long-term care and it doesn't necessarily mean long-term care insurance but we need to have a plan for if you do need long-term care how we pay for.

Okay, one more example of famous last words here on Mr. Stillman's opus. I can always go back to work if I really have to know him.

His last words. So the irony of this statement is that anybody who's ever retired and had to go back to work because they need to for financial reasons is absolutely miserable with the fact that they have to go back to work because you get used to being retired and going back to work suddenly becomes a lot less palatable. It's one thing to be working and say yeah I can retire and come back. No big deal. Once you've actually gotten the taste of retirement really hard to step back in the networking world. The irony though is that a lot of people retire and go back to work in some capacity. Not because they need to financially but because I miss working they enjoy. They like contributing in that fashion to society, so I've actually have a lot of clients who retire in their mid 60s and they spend a year or so traveling I say, well, this was fun, but I got over this work so they'll be due consulting in the field that they were in. Or maybe I'll go get a part-time job somewhere have one client who retired from an RTP job spent a year doing some traveling. They said that this is great, but I would like to be scooping mulch over here at the mulch yard so he works like three days a week scooping mulch while because he wants to do what he wants to be out there moving around doing stuff but like I said it's really ironic because those people who go back to work because they want to are not the ones who need to go back to work financially.

The people who have to go back to work financially to test the idea of going back to work and while life works out that way but that seems to be how it always falls well those are some examples are famous last with John Stillman and he is also the author of the financial buffet get that book today. Promise. It's a great read and you have a lot of information. This is Mr. Stillman's opus Ron Stutz along with John Stillman