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2009-05-02T07:05:00.001-07:00

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Home based businesses for Retirees I

2008-04-23T12:49:00.000-07:00

Starting a home based business by retirees is a good way to increase your income stream to supplement other sources of money on one hand; on the other hand getting involved in starting a home based business allows retirees in staying busy, keeping the mind occupied and spending your time more productively as opposed to whiling your time away. Note however, that the goal in establishing a home based business by a retiree may be different than the goal in establishing a business operated from home by a middle aged person in that the latter is simply interested in increasing income whereas the retired person is more interested in the overall results of being busy, contributing to society and at the same time potentially earning some income along the way. In this regard, financial rewards are not the only reason that retirees start home based businesses, but they do form a major objective. In this multi-part articles set, we will discuss various ideas to be considered when evaluating the possibility of starting and operating a home based business by retirees.

First things first. No one is going to pay you any money, big or small to simply do nothing. Having retired from some business, you probably already know how hard it is to earn money. You need to be involved in something you are passionately interested in when attempting to start your home based business. As is the case with every business, you need to give it enough time to build and grow. Nothing happens overnight. And yet I read about so many people that are looking for get rich quick schemes promised by hundreds of scam programs. For example, I came across a banner for home based businesses for retirees that promised how to make millions at home easily with no investment, no selling and no risk. If you believe such outrageous advertising without reading the very fine print, you are liable to get heavily disappointed. If all that you are interested in making money by doing nothing, you may wonder why you didn’t do it during your productive years and instead worked so hard for so many years; or conversely, if it was so easy to make so much money to do nothing, why is this person advertising this to you If you found a multi-million dollar idea, would you simply give it away or would you make the money yourself. I find some of these claims so ridiculous that I cannot help laughing. Hearing and reading about these outrageous ideas has actually given me a lot of entertainment value as I say to myself – what are these people thinking – do they think I was born yesterday? Lets be honest. If something seems too good to be true, it probably is. As you probably have heard the statement that there is no such thing as a free lunch, there is no such thing as making millions for doing nothing. If you are willing to accept this fundamental truth, then you can look forward and plan to do something productive and enjoyable and earn money along the way in your home based business. There are a lot of legitimate and honest businesses that you can start from home and operate successfully, but remember it does take work and effort to succeed; plus it keeps your mind occupied and allows you to be productive.

Retirement Places

2008-04-19T04:07:00.000-07:00

In a previous post, we had addressed the fact that retirement planning is more than simply financial planning. Of course, addressing issues of 401K, IRA, annuities, pension plans, estate planning, etc are all very important aspects of retirement planning. But there are other issues to be addressed also as you plan to spend those golden years of your life. In this article, we will address one such specific issue that pertains to retirement planning; namely where do you plan to retire. There are several treatises on the subject of the best places for retirement and so on, but you need to address what is the best place for retirement for YOU. What is a great retirement community for someone else may not necessarily be the best for your individual situation. However, the common issues that go in to the making of that decision is what we will discuss here.

First of all, you need to find the cost of living for the retirement place that you are considering. Is the cost of living sustainable by your finances. When considering the cost of living, you need to address energy prices, real estate taxes, personal property taxes, food costs and the like. Choose a place that is well within your means. If the proposed retirement location has lower costs of living compared with where you are now, then that is a plus point. If not, you need to be aware of the increased costs that you need to be able to afford. Secondly, what about the weather; some senior citizens may be very sensitive to excessive heat and cold temperatures. Evaluate the year round temperatures, snow falls, rainfall, etc before finalizing your choice. Next of course, you need to find accessibility to quality medical care. What is the point in moving to a sunny place with moderate temperatures only to find that quality medical care is too hard to find. Remember that medical necessities become more as one ages into retirement years and retirees need to be aware of this very important need. Next, evaluate the community and social workings of the place of retirement you are choosing. If it is a foreign land, do you know the local language and if not, can you at least learn the basics quickly; what about their local customs and social activities; is it in line with what you expect.

An important aspect of choosing retirement places is how far away from close relatives are you going to be. Especially being very far away from children and grand children may not be what you want. If you are very much attached to your grand children then moving very far away from them simply because the cost of living is cheaper may not be the best alternative. You may want to cut down on some expenses and stay closer to them instead. Also consider what you would be doing in the time that you have suddenly discovered to be yours; you need to keep yourself busy in order to spend your time effectively; evaluate on what options are available as in local community colleges, libraries, museums, art galleries and other social clubs. In choosing the place for retirement both spouses should be involved so that it becomes a pleasurable experience and not a painful one. As you can see, choosing a good retirement place is more than just finances; there are other factors to be considered also. Sometimes the place to retire might very well be the place you are right now.

Retirement Planning and Time Management

2008-04-14T13:25:00.000-07:00

In a previous post entitled Retirement Planning 101 , we dealt with the concept that retirement planning involves issues above and beyond simply financial planning, 401K management, IRA issues and estate planning issues. Of course, financial planning such as estate planning, insurance planning, 401K management and the like are a very important aspect of retirement planning, but it is only once piece of the puzzle. In this post, let us consider another aspect of retirement planning, namely, planning to manage your time in retirement. The concept of time management during the hectic years of earning money while you are burdened with responsibilities of making your mortgage payment for your house, car payments, making ends meet as far as children’s college education, etc is much different from the concept of time management in retirement. Whereas in the former, you are more interested in making every minute of time productive enough from a financial stand point, in the latter you should be interested in making every minute of time productive in producing satisfaction in doing the things you “want” to do which may (or may not ) actually produce financial rewards too. Those folks who retire from the active workforce and simply while away their time in the traditional retirement scene, actually may end up with a variety of problems in their sense of satisfaction from the point of view of accomplishment; this in turn may lead to health problems and associated worry. It then may snowball into other areas of problems such as anxiety and depression and may reduce life expectancy. People that tend to keep themselves busy can avoid a whole bunch of unnecessary headaches.

Hence, a critical aspect of retirement planning involves planning on what to do with your time. While you may have put in strictly eight hours a day, forty hours a week and you need to fill up only those eight hours a day with things to do, you may have been a very zealous worker who put in twelve hours a day six days a week and are now faced with filling that seventy-two hour a week time slot This is especially difficult to do for those people that held two or three jobs though out their active working lives. While addressing time management during your retirement years, ensure that you put in place time slots for specific activities and put them down in writing. For example, if you have been an executive of a medium sized business throughout your active life and plan to provide business advice to small and medium sized companies in your retirement, then you need to specifically write down how you plan to spend your time performing this field of activity. You may for example break down your eight hour day into three hours soliciting and developing new contacts and prospects; two hours writing small business management articles, two hours meeting with clients and providing actual business advice and one hour managing accounts and other administrative functions. Your written time management plan needs to be this specific to be of any value; otherwise it ends up being just a hazy picture at best. Of course, your spouse needs to buy in to your time management plans also. This needs to be a co-operative effort and not a solo one.

Retirement and Ageless Beauty

2008-04-13T13:00:00.000-07:00

Retirement and ageless beauty go hand-in-hand in my opinion. Time to look for and develop ageless beauty in your body and mind. A common practice that seems to pervade recent folks that have entered the retirement phase of their lives is to look to loom and doom. They worry about their financial well-being, they worry about their 401K monies running out, they worry about their insurance policies not being sufficient, they worry about their health deteriorating, their potential future lives in nursing homes, their doctor visits and pills and medications. The recent retirees fill up their time with all these gloomy thoughts and finally they die. Is this what they worked all their lives for – this level of misery? If this is what retirement is about then they should never have retired from their active lives. In fact, there have been some studies that say that if you decide to postpone your retirement by staying in your current occupation for five more years then you might potentially live ten percent longer! I believe that a lot of this has to do with your mental frame of mind, what you choose to put into it and the company you keep. Once you retire, the company you keep has a lot to do with your general health and well-being. Do not hang around with other retirees that talk all day along about their trips to the doctor and what medications they are taking. Stay in the company of younger more active adults and children. If you have grandchildren, visit them more often. Studies have also shown that grandchildren can extend your own life and improve your health. Go where younger people go to; given a choice between Virginia Beach and Florida, I would choose the former. Given a choice between Varanasi and Bombay, I would choose Bombay. Given a choice between London and Warwickshire, I would choose London. You get the drift of what I am saying, I presume.

Do what younger people do. If you like to take some classes, do not take classes on “medication management”; instead spend your money on taking classes on “fitness and yoga” – notice that they are both health related topics but the latter is more vibrant than the former. I had come across a seventy year old retired engineer that was sitting side by side next to me as I was taking some classes on “Finite Element Methods in Stress Analysis” which is a graduate level course for mechanical engineers! I couldn’t believe it ! Same thing when it comes to what you read; read what younger audiences read. The amazing company that books provide cannot be underestimated. If you keep in the company of old age books and senility magazines, you are liable to feel old and senile yourself. Retirement is about ageless beauty. If you are a lady, then frequent beauty salons and beauty parlors once you have retired – more often than when you were young and did not have the time to fix those beauty appointments. Remember, your financial well-being IS important; but so is your ageless beauty !

Retirement Planning 101

2008-04-13T06:18:00.000-07:00

Retirement planning for some people seems to be starting just before retirement That is not a good practice. The sooner you work on retirement planning, the better off you will be. If you are 25 years old and you start the retirement planning process, you are better off than waiting to be 65 years old and then starting the process of planning for retirement. In short, the sooner the better. Retirement planning does not involve only financial planning for those golden years. In somewhat of a normal way of conversations, any time someone brings up the subject of retirement planning, everyone starts thinking of 401-K, IRA, annuities and the like. In my opinion, financial planning for the retirement years is only one aspect of retirement planning. We will deal with the financial aspects of retirement planning in a future post. For now let us consider something else – what is retirement? I am sure most of you that are still in the workforce have mentioned to your colleagues about how you cannot wait to stop working and retire Somehow, that seems to bring in thoughts and imagery of serene beaches, palm trees, the calming sound of the waves and relaxed atmosphere away from the wretches of the day to day job that you are in If the prime reason you want to retire is because you do not like your job, then simply work on finding a new job or changing your career. Retirement, the way most people define, is not a way of getting away from the boredom of your current job.

In my opinion, true retirement involves leaving your current major work activity to move on to another “less taxing” one. In other words, if you are a machinist working in a factory and have put in about twenty years, let’s say; you now are tired of swinging the wrench and working with mechanical machinery; you now decide to retire from the occupation of being a machinist and decide to become a computer programmer. You go to school, learn completely new skills and start off on a new career. You have technically retired from being a machinist and have started off on a new path. Of course, there is financial planning involved even in this career change process because how do you pay your bills while you are in the process of learning new skills? Retirement does not mean you quit your job, stay home all day and watch meaningless television shows and waste your time away. You may “retire” multiple times during the course of your life.

Do not underestimate the power of working and staying busy. An idle mind is the worst state to be in. When the mind does not have any problems to solve, the body starts to let go. I know of a lot of people that took the classic path of retirement – they worked like dogs all their life; then suddenly retired one morning and were dead after just a couple of years. Why? Because they did not fill their time with challenging activity. That is why part of the “retirement planning” process needs to be to plan as to what are you going to do with your time. What you are going to do with your time is as important as saying “Do you plan to live long or not.” In fact, some older people that have recovered from some serious illnesses, have gotten back in to the work force only to find that they are newly charged and end up living much longer than anyone thought. Hence eliminate the thought of sitting around and doing nothing because if you do so you may not be sitting around I am not saying that you should not take short breaks and small vacations and getaways to far off ( or nearby ) places and enjoy life also. But to make that a part of retirement, is a mistake, in my opinion. How many times have you come across someone that says, “Oh, I plan to retire and travel around the world.” That sounds good; but it is not a very healthy plan.

On-line Graduate Schools

2008-03-17T13:37:00.000-07:00

In continuation with a previous post, I find a lot of people with bachelor’s degrees that do absolutely nothing to improve their skills once they have landed their first job. In order to succeed more in life, one must continue to learn more all the time. In this day and age, there are so many on-line graduate schools that make continual learning so easy and convenient, there is absolutely no excuse for not making use of them. On-line graduate schools offer many on-line programs in various fields to cater to varied interest. You can earn a master’s degree and some on-line graduate schools even offer doctoral programs.

Choosing the right on-line graduate school is much easier than before with a lot of resources and books on this topic in abundant supply. Also called distance learning, you are no longer constrained by your physical proximity to the school. A friend of mine who is an IT consultant took an on-line graduate program in business and landed with a fantastic offer to be in IT management. The rewards of continual learning are tremendous. After all, the better jobs you progress towards, the more money you make. After your day at work, come home take some courses on-line instead of wasting precious time watching boring shows on television and you end up with a better career or a better position within your current company. Can anybody beat that?

Adult Education

2008-03-16T04:36:00.000-07:00

So you finished college successfully with great grades and landed that dream job. Congratulations It indeed is a monumental task nowadays – considering the fact that one has to shine in high school to be accepted to a good college or university and then burn the midnight oil, perform well in quizzes and examinations. It is tough sometimes to stay focused in college amidst all the distractions that are inevitably present. And after all that, the tremendous competition that exists in the job market means one has to work hard to get to the interview stage which itself might consist of several parts and then finally get accepted to a position. That is to be appreciated after all.

But hold on... getting that dream job is not the end of things. In order to stay ahead of your competition and to be able to hold on to the job as a minimum and potentially get better jobs or move on to higher paying jobs, one needs to get involved in adult education. You need to constantly sharpen your current skills and acquire new skills ALL the time by getting involved with adult education. Employers value employees that are constantly improving their skills by taking evening classes and weekend courses or on-line college credits. And many times employers will completely reimburse all costs associated with adult education. After all, when an employee learns more, he will be even more valuable to the employer. And in turn, the employee, namely you, get paid more. Getting paid more equates to more money in your pocket to do the things you want to do; adult education otherwise known as continual education is a big part of this.

Adult education is applicable regardless of the field of occupation that you are in. If you just graduated with a bachelor’s degree in accounting and got a job as an entry level accountant, may be a management degree with finance major would be helpful; or work towards getting to be a certified public accountant. If you graduated with a degree in mechanical engineering and got that dream job dealing with aerospace manufacturing, then may be a few adult education courses in metallurgical engineering and materials would be an added value to your field of expertise; or may be a degree in business with a major in finance or information systems so you could move into manufacturing management. I know of a friend of mine who graduated with a degree in materials engineering and then painstakingly took adult education classes to get a degree in law and guess what he now works in a law firm as a failure analysis expert dealing with cases where manufactured components fail and liability cases have been filed in courts of law; he nearly doubled his income and his adult education paid off in a big way.

Adult education is not just limited to engineers and accountants. If you have graduated from a trade school and are working as a machinist, then take on adult education classes in the evenings in engineering and work towards an associates degree or diploma in mechanical engineering. A high school graduate that is working as a fork-lift operator can take adult education courses in diesel engine repair or maintenance mechanic’s course and have something more to look forward to in career. If you are working as a teller at a bank or a secretary in the office, may be some adult education classes to improve computer skills would potentially take you farther in the pay scale. A friend of mine who was a computer programmer at a nuclear power services company, gave up his job and wanted to so something that gave him visual satisfaction; so he became a carpenter. After several years, he found that he could no longer do the extensive manual and physical work involved; so he took some adult education courses in real estate appraisal, got himself a real estate appraisers’ licence and now works for a small firm as an appraiser in one of the hottest real estate markets around making nearly twice the amount of money that he was making before

In any case, continual education is very important for one’s career and potential to make more income and have job security. So keep learning and earning more with adult education.

Cars | Getting the most of

2008-03-15T06:53:00.000-07:00

Cars and expenses related to vehicles form a major part of the average person’s budget. Hence careful attention needs to be paid in evaluating the motor vehicle scenario, in order to get the most bang out of the hard earned buck. In the modern day, cars have become a necessity of life rather than the luxury they were several decades ago. However, good hard earned money must be properly spent on cars rather than buy in an impulse. Sure everybody wants to be driving around in a fancy luxury vehicle but does it make financial sense or not is a different story.

The key to note is that the moment you drive off the car dealer’s lot with a new car, its value drops down; and it continues to drop down dramatically in the first couple of years and then the rate of decline in value slows down in the subsequent years. This of course is a generalization for most cars; there are always some exceptions. I have therefore found that the best value for my money is in getting a car that is a couple of years older, so that somebody else has taken the hit for the huge initial depreciation and thus I end up with a great vehicle at a reasonable price.

That is not to say that one should never buy a new car. I have found that if I buy a new car, I keep it until it basically dies. I do not trade cars often because every time I trade, I seem to lose money. What I have found works very well is that I will buy a new car for my wife and then after a few years, I will take over driving that car until it essentially becomes un-fixable. Then, I will purchase another new car for my wife and I will take over her car which was purchased new several years ago and repeat the process. This way, we always have dependable vehicles without having to eat the early huge depreciation for someone else.

One also needs to evaluate the kind of car that will meet the necessities of one’s lifestyle. I have seen people buy huge fancy pickup trucks when they do not plan to haul even a pound of groceries Pick up trucks are great as long as you put the bed of the truck to good use; why have all that towing capacity if you are not going to use it. The reverse psychology is applicable to a few people also; I know of a friend of mine that bought a hybrid car that runs on gasoline and electric batteries for the purpose of getting a high mileage on fuel – except that he drives only a few miles back and forth to work – the increased up front cost of the vehicle I don’t think justified the economies in fuel.

Stock Market Ups/Downs

2008-02-24T01:01:00.000-08:00

The media is full of news about the huge swings both up and down of the stock market. This creates fear at times and unfounded securites at times. While it was supposed to be that a company's stock should go up if it is being run efficiently and that its stock should go down if it has troubles of various kinds, nowadays events even remotely unconnected to a specific company's performance seem to affect its stock price -- wonder why -- that is because human beings with their emotions and fears invest in the stock market -- with the result that the price of a company's stock varies quite a bit day to day .
If you still want to invest in the stock market, investing a little bit of money steadily over the long haul seems to be the best alternative -- also called "dollar cost averaging", this technique smooths out the frequent ups and downs in the market's behaviour. There is still no guarantees that tremendous strides in wealth will be generated -- that is a risk that one needs to cope with. All of the statistics, charts and graphs of past performance really do not present any predictions of the future simply because human beings do not always behave in predictable ways !

Credit crunch-subprime mess

2008-02-23T01:01:00.000-08:00

How did we ever get into this subprime mess? Who is responsible for all this ? Who should pay for all this mess that we are in ? How is the economy going to get affected by the current banking crisis ? These are questions that are in the news everyday now. Pundits and economists are all full of complicated solutions and complicated reasons for the sorry state of affairs that we are in now. In my opinion, we do not need to complicate matters more than necessary.
First of all, the bulk of the responsiblity falls on the borrower. If you cannot afford a house mortgage payment based upon your income, then don't buy it ! It is that simple. Now that the borrower is in default of the loan, let the system take care of it in the normal course of events. The US economy has weathered many storms through several decades and this is no different. Dropping the interest rate has been helpful and sooner or later the stock market will come back to its normal healthy levels. So, panicking is not necessary. Let us all take responsibility for our financial actions and not repeat the mistakes we may have made and the system will take care of itself.

Car Ownership

2007-11-28T01:01:00.000-08:00

Buy a car that is within your means. If you can comfortably purchase a fancy SUV, then do so; do not overstretch yourself. A lot of preowned vehicles are available in the market nowadays that provide a good value; so consider these options also. Evaluate the amount of money spent on repairs and maintenance; sometimes if too much money is spent on repairs, it may be worthwhile to sell off the old vehicle and replace it with a new one.Car financing is to be evaluated carefully -- do you get a four year loan or a five year loan; and how about the extended warranties and what do they cover.
Car leasing options abound nowadays. Evaluate a buy or lease decision prior to finalizing plans. Some car leases have a lot of conditions that lessees need to abide by -- pay attention to them. When people do not weigh in on the financial considerations before buying a big ticket item such as a car, they might end up in trouble. This is the case whether you live in the U.S., Canada, India, China or anywhere else.Remember -- always wear seat belts and drive carefully. Put safety first.

Home ownership

2007-11-27T01:01:00.000-08:00

Unless you have enough cash to buy a house outright, most people will end up having to finance the purchase of their house. There are two basic kinds of mortgages -- fixed rate mortgages and adjustable rate mortgages. One must be conservative in getting a loan. The fixed rate mortgage allows you to plan well into the future since the monthly principal and interest payments remain the same. In the adjustable rate mortgage the interest rates may change during the life of the loan. In most cases, this is tied to the prime lending rate. Of course the tax and insurance rates are not predictable in any case. Try to shop for a good home owners insurance policy. Put down sufficient down payment and make additional principal payments whenever possible so the principal can be brought down faster and you can own your home free and clear. This is called accelerated amortization.

Before you go around taking home equity loans to take a dream vacation, or invest the money in a poorly thought-out business proposal, think twice -- there is tremendous peace of mind when you own your home free and clear of any liens or mortgages.