Yesterday it appeared that Hurricane Dorian was weakening somewhat and its probable path this week would spare our Atlantic coast from the worst possible destruction. As it slides slowly northward, the damage may come from storm surges and torrential rain.
I have watched some coverage of the preparations. Even Floridians seem to be amazed when a Dorian-magnitude storm comes along. We humans seem to quickly forget threats to our well-being within months of the last episode. Perhaps we count on the law of large numbers to save us, knowing that even in dire straits, a percentage of residents will be spared,
FEMA, the federal agency we think should be the guarantor of all safety, has helpful words for us. Whether we live in the Midwest, earthquake prone California, or along the southeastern coast. A recent bulletin, “Financial preparedness pays off in emergencies,” contains great wisdom. It is well-written, short and sweet.
First recommendation? Create an emergency fund. In January of this year, Bankrate.com found that only 40 percent of Americans can pay an unexpected $1,000 expense from savings. Over a third would borrow the money from someone or a credit card, about 14 percent would cut back on spending and 10 percent admit to having no idea.
In the land of plenty we have today, this should not be! I know there are tragedies every day, and my wallet is open to help them. But we have to do a better job of raising those living like there is no tomorrow who are still surprised when tomorrow actually arrives. And it is not as we expected.
I cannot throw rocks too far in any direction. As a proud member of the Baby Boomer gen, we grew up in great times and expected them to last forever. One could earn a decent living, spend lots, give generously and borrow lots of money for all the things you wanted in the future. And I did. But not everyone needs to make that mistake and learn the lesson himself.
Beside the human nature problem of immediate gratification, we have a widespread failure in personal preparedness. When a new client hires us to manage money, we emphasize that creating our best value for them will involve planning together for their future.
Even though this costs nothing extra but time, life pushes other matters to the forefront. Charles Hummel called this “The Tyranny of the Urgent” in his 1967 booklet. It afflicts us all.
The saying “too soon old, too late smart” is now fully evident with Boomers. According to Mary Childs in Barron’s from April 2019, 47 percent of us regret not starting to save sooner and fully 35 percent wish they had saved more already (www.barrons.com/articles/americans-unprepared-for-retirement-51554503375?mod=hp_DAY_7&mod=article_inline).
This and more enlightenment comes from a recent Natixis survey of 1,000 employees having access to a company-sponsored retirement plan.
Where should I start? Plan out your financial future. On paper. With your spouse. Get help. You can do this! It is never too late to make a difference for yourself. In the timeless words of that great American philosopher, Yogi Berra, If you don’t know where you are going, you’ll end up someplace else. Many are arriving at their non-paying life in a state they now do not like.
Ron Finke is president of Stewardship Capital in Independence. He is a registered investment adviser. Reach him at email@example.com.