Archive for August 2008

Who Can You Trust?

August 22, 2008

I am a sports radio fan! Here in Portland, Oregon, we have a sports radio station that runs 24/7. I know, it is not what most of you probably enjoy, but I like it. It gives me updates on the sporting world, and that is an interest that I have.

Every day they have syndicated talk shows. They do have great local stuff, too, but today I was listening to Dan Patrick, a nationally known sports guy. I enjoy his stuff as he is a great interviewer and has a perspective that is entertaining to listen to. Today they had a poll question. The question was “If you knew you would never get caught, would you cheat to win a gold medal?” What a great question to ask the public. As people from all around the country called in, they responded to the question. Last report showed that the online poll shows that 32% voted Yes, while 68% voted No. I am at least pleased that the No’s won out, but weren’t the Yes’s too high. I am a little dissappointed, but not surprised. I actually thought it might be a little closer to 50/50. I am glad I was wrong.

So what is my point? I was told early on that just when you think nobody is watching, somebody is watching. I also have learned that the measure of a man is not what one does in public, but what one does in private, when nobody is watching . . .  when nobody ever knows. Those that are close to us often don’t know the “real” us. The person who knows the “real” us is the bank teller when she has to give you some bad news about your bank account or a loan request. Our character is revealed when we face adversity.

I am not going to get real political here, but I do want to share one thing. In watching the Olympics and how things have been portrayed, it has given me a look into the hearts and minds of the Chinese government. There have been a few things that have caught my attention: 1. Opening Ceremonies Lip Sync – the little girl who we heard was not the one who appeared to be singing, 2. Opening Ceremonies Fire Works – several of the fireworks on TV were not really appearing in China, it was digitized to appear better than it really was, 3. The age of the gynmists – though not confirmed, it appears that some of the gymists were underage (still to be determined). There may be more, but these three things are fresh in my mind. What are the intentions of the Chinese government? Possibly to appear better than they really are? Who are they really? Are perceptions reality? Are the perceptions something we can trust?

I do believe that we all want to be trusted. But the question remains, can we be trusted. If I trust you, will you pull through for me? Will you tell me the truth? Are you on my side, or are you only really looking out for yourself? Will you sleep at night with the information you tell me? Will you stretch the truth? In all reality, whatever we do or say, we will have to live with it the rest of our lives. And everyday, when we face the world and all of the treasures we have amassed, we will have to look at ourselves in the mirror and see either a “fake,” or an “authentic” individual. Is the Truth your friend? I hope so!

In working with seniors, I take it upon my responsibility to be a truth giver. It hurts sometimes to tell someone what they don’t want to hear, but truth always wins out. It always wins out! Is it a coincidence that “Truth” and “Trust” start with the same three letters (I really don’t know). Do they represent the same thing? Many people today walk around telling people they can be trusted. “Trust me,” they say. I simply know that trust is earned through time, and that history is a good indicator of future behaviors. So, I’ll ask you the question, “If you knew you would never get caught, would you cheat to win a gold medal?”

Though it is difficult to really know how we would answer the fictitious question, it is a great question to think about and ponder. Is it Truth that we are after, or do we strive to be percieved as wanting Truth. Good question . . . . Who can you Trust?

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Re-thinking the Three-Legged Stool in Retirement

August 13, 2008

I recently read an article in The Oregonian titled “Boomer’s future is spelled: W-O-R-K.” Doug Bates spelled out the difficulty that boomer’s are having keeping up with their lifestyle with the traditional “savings, pensions, and social security” mentality, commonly seen as the “three-legged-stool.”

Though there are many areas to blame for this problem, the reality is that those who are considered “boomers,” as a group, have not saved enough money to maintain the lifestyle that they are accustomed to. In fact, two-thirds of today’s leading baby boom cohorts are not ready for a financially comfortable retirement. “Comfortable” is defined as being 80% of the pre-retirement income.

The rest of the article went on to talk about how the United States must re-invent retirement, which likely should include creating opportunities for retirees to work throughout retirement, more specifically a more flexible system in which more opportunities would be available to them.

The article is a good read and I recommend it. However, though I agree with Bates that this is going to be a huge problem for many of the boomer’s planning for retirement, there is an option that was not discussed, and which may be a more solid fourth-leg on the retirement stool. You guessed it! A reverse mortgage!

Here are some numbers to chew on . . . . Financial Freedom, one of the largest reverse mortgage lenders in the country, estimated that roughly 30 million senior homeowners hold 3 trillion dollars in home equity (2006). Though this number is probably down using today’s home equity numbers due to a devaluation of home prices, those numbers will likely climb back in time. The reverse mortgage can be used to provide a guaranteed income for life, as long as they reside in their home. At the point in which the owner moves out of their home, the loan comes due. As an FHA guaranteed loan, the owner will never owe more than the value of their home. This kind of guarantee is one that many seniors today are considering. It is a source of income that pays, and allows boomers to enjoy their final stage of life! Let’s hear it for the “four-legged stool.”

Are Interest-Only Mortgages for Seniors a Good Idea?

August 1, 2008

I recently helped a senior who was paying over $800 per month on an interest-only loan. She had been interested in a reverse mortgage for some time as her increasing monthly expenses were causing much stress to her. It made sense to evaluate this option for her.

One of the things that she realized is that her $800 payment was literally a throw away. The only thing it was providing for her was the minimal tax benefit at the end of the year. What if she were to have NO payment, and use a portion of the $800 to invest in a low-risk fund, bond, or whatever. (By the way, I am not a financial planner, so I did direct her to a financial professional that could assist her.) By investing in a low-risk investment she not only frees up some cash for her to have some elbow room each month, but she also will provide herself future financial resources.

In working with seniors in this situation as they consider a reverse mortgage, the question is always the same, “What are your plans for your equity?” and “Would you rather use your equity today to give your breathing room to live and pay your bills, or would you rather use it later for someone else?” Healthcare issues are usually a part of that conversation as many seniors would like to keep a portion of their equity for a possible long term care need. Whatever the case, these are the issues that one needs to consider when looking into a reverse mortgage.

So, does paying on an interest only mortgage make sense for a senior? It appears that there may be better options available. Using the reverse mortgage is just one of those very good options!