Friday, March 7, 2008

Correction to TJ Walker Webinar And The Rule of 2.5



"Time Zone Challenged Tammy" sent a reminder email out for the March 12th Webinar with TJ Walker" which gave the WRONG TIME for the East Coast.

Thanks to all you East Coast folks who apprised me of the fact that, when it is 11AM here in California, it is, in fact 2pm on the East Coast. Many apologies for that mistake. Register at:

https://www1.gotomeeting.com/register/207845109

RE: Yesterday's article on how much more money retirees will need for medical expenses.

"I'm Not Larry" commented that he senses a marketing ploy to pave the way for some NEW IMPROVED GETS YOU MORE SOLVENT THAN THE LEADING BRAND product.

Sadly, INL, I too smell a product pitch lurking in the in the disinformation darkness. A similar thing occurs when you hear something such as "government studies find potato chip grease causes blindness in mice" UH OH: (red light flashing off and on) More laws are on the way!

Sure enough media picks it up the story and posts it all over the place like obedient little serfs. Then, a few months later, rumblings begin on Capital Hill that there "oughta be a law against that!" Laws, of course, being the products (byproducts?) of politicians.

Yes, INL, the media is often used in the most heinous and manipulative ways- to incite fear, loathing, and a buying frenzy.

HOWEVER, from personal experience I can safely say. "No matter how much money you think you have for your retirement- IT ISN'T ENOUGH.

I like to apply the rule of 2.5 to all of my life.

If I go into a grocery store with a list and estimate the cost at $55.00, I simply increase that amount 2.5 times. If I am putting together an e-zine and say I will work on it 2 hours, I increase the time by 2.5. Waiting for a commuter train? Again, 2.5.
"Honey, I'm going to be a half hour late.. No, wait, make that 1.5 hours."

INL- do you think this would make sense in the world of retirement planning?

1 comment:

I'm Not Larry said...

TD,

I'm not sure whether you can ever have enough, but I tend to look at this problem a bit differently...

The way I present this to clients and prospects is "if you don't earn it, someone else will"...

Whether it is settling for a 1% savings rate at the bank, getting a 3% fixed annuity rate, or a 3% tax-free muni... I always look for where people can earn "just a little bit more" so that, if the bad thing happens, they have enough resources to take care of themselves...

What if they don't need any extra?? Well, I still say that they should NEVER settle for less than they could earn while taking comparable risk... For example, if the savings account is paying 1%, why not purchase a Money Market Mutual fund (like VMMXX with a current yield of 3.56%) instead??

The fact is, if the client isn't earning the "easy money", all they are doing is giving the money that they didn't earn to the bank, insurance company, etc because I can tell you this for certain... The bank IS earning the highest rate THEY can get...

Here's another anecdotal "factoid"... As a guy that charges advisory fees to manage portfolios, I often find that the majority of my "fee" can often be funded by simply earning the extra bit as I've described above... That way, the client isn't worried about how much they pay me because I can show them the math that proves that they are doing better with me than without me...

Try it, you'll like it ;-)