Author Archives: consciousfinance

How to Help Grandkids Pay for College

From Rick Kahler

One financial goal held by many of my clients is to help pay for their grandkids’ education. This generosity can foster gratitude and family closeness. Unfortunately, it can also foster resentment and family misunderstandings. Here are some suggestions for helping with grandchildren’s college expenses in positive and supportive ways:

1. Be fair. This doesn’t necessarily mean giving each child the same amount down to the penny. It’s perfectly fine to consider factors like various family’s incomes or kids’ different abilities and career goals. One possibility might be to define “fairness” as helping grandkids to be on a reasonably equal financial footing when they graduate. Continue reading

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So a Gas Gauge Optimist Walks Into a Service Station . . .

From Kathleen Fox

Do you see the tank as half full or half empty?

The gas tank in your car, I mean. This is not a philosophical question; it’s a practical one. Because those happy-go-lucky optimistic drivers who see the tank as half full and those careful pessimistic drivers who see it as half empty are destined to marry one another. Or at least to travel or car pool with one another. It’s car karma.

Here are some signs that you might be a gas gauge optimist:

1. When the idiot light—er, excuse me, the “low fuel indicator light” comes on, Continue reading

The Reality of a Million-Dollar Retirement

From Rick Kahler

Retiring on a million dollars. The idea may evoke images of lavish retirement homes or luxurious travel. But let’s take a closer look at the real lifestyle that $1 million of retirement savings will afford.

It’s reasonable to assume a long-term real return, after adjusting for inflation, of 2% on a diversified investment portfolio. At that rate, $1 million would provide an annual income of $44,650 for 30 years. This leaves no cushion for emergencies or increased living expenses beyond inflation. It also leaves nothing after 30 years to pass on to heirs.

If you are single and age 65 with $1 million, you should be okay for 30 years. But what if you are married? Continue reading

Washboard Abs

From Kathleen Fox

washboardThe washboard hanging on the wall of our laundry room is no reproduction, artistically distressed to look pseudo-authentic. It’s just plain old. It’s been used. The wood is unevenly bleached and stained from standing in tubs of hard water laced with harsh soap. At the bottom of the ridged glass surface, the frame is worn away in the middle, no doubt from years of scrubbing dirty overalls.

I even know whose hands must have done that scrubbing. Not my grandmother (one of my sisters has her washboard), but my grandmother’s neighbor and close friend.

But let’s not wander too far into “olden days” stories about my grandmother scrubbing clothes on a washboard for a family of 12. At least by the  early 1930’s, washboards may have been still used for extra scrubbing, but the bulk of the laundry was done with a washing machine. My mother remembers an early one with a wringer that was turned by hand—a perfect chore to assign to kids (in rotation, of course). The next one had an agitator and a wringer powered by a small gasoline engine. You can see one like it in action here.

This handy-dandy modern convenience still had to be filled with water heated on the kitchen stove and carried one bucketful at a time. Given the fumes from the engine, it would have needed to be used on the porch rather than in the kitchen. Pleasant enough in June; in January, not so much.

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How Much Life Insurance Do You Need?

From Rick Kahler

Life insurance is an important financial planning resource. However, it is not meant as a source of income. Its primary purpose is to provide the means to replace income or to pay taxes or debts.

Not everyone needs life insurance. Once you determine that you do, the next big question is how much is appropriate.

Here is one way to help answer that question. It is not a formula, but a very rough checklist to help you estimate your individual insurance needs. For couples, I suggest separate lists. Not all of the information will be the same for each spouse.

First, list the following: Continue reading

Life Insurance: Three Things to Know

From Rick Kahler

Here are three points about life insurance that many life insurance salespeople would prefer you not to know:
1. Not everyone needs it.
2. Those who most need it are often least able to afford it.
3. It is not a good investment.

Let’s take a deeper look at each point.

1. Not everyone needs life insurance. You probably don’t if you are single, financially independent, don’t have large debts, or own property or a business that will be liquidated upon your death.

You need life insurance only if anyone would be put at risk or suffer financially because of your death. Here are four circumstances when insurance is typically necessary: Continue reading

First Steps on the Path to Financial Independence

My hunch is that most people would agree they “should” invest for the future. My second hunch is that many of them don’t know how to start and are afraid of making serious mistakes.

One of our resident planners, Sterling Gray, summed up that fear eloquently in a post on the Kahler Financial blog: “I noticed that my friends and colleagues . . . saw retirement planning as a dark, treacherous terrain that they could never safely travel alone. Unsure of where to turn for help, they often chose to ignore saving for retirement completely . . .”

Here are some pointers to help you take the first steps into the unfamiliar terrain of investing.

Continue reading