Where to Find Yield Without Dividend Stocks, Bonds, or CDs

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Regular readers know how concerned I am about the number of baby boomers and seniors who are financially unprepared for retirement. It’s not like the downsides of aging are a secret. As we get older, our bodies wear out and we slow down. Unless we plan to work until the grim reaper shows up at the door, we need to save and invest quite a bit of money.

When we published our special report on reverse mortgages a few months back, I learned that the average age of seniors applying for a reverse mortgage had dropped by almost 10%. Many of these folks were drowning in debt, and they hoped to use the payouts to help keep them afloat.

Back in May I made note of an Employee Benefit Research Institute (EBRI) study reporting that only 10% of eligible workers are making the maximum contributions to their employer-sponsored retirement plans. Of the 90% who were not, most said they needed that money to pay their bills… today.

Why do so many people spend, spend, and spend some more, but are unable (or unwilling) to save for retirement? A couple of personal events woke me up to the idea that, perhaps, the answer to that question is just so obvious that I never realized it before.

My granddaughter Corrinne has a young child, and she is fortunate enough to have a job where she can work from home. They live up in the frozen tundra of Appleton, Wisconsin – a stone’s throw from Green Bay. This last winter, her old (and paid-for) car would not start, but they did not have the money for repairs. So it sat in the garage, and they functioned just fine as a one-car family.

When her mother and I discussed the issue, she mentioned that it wasn’t such a bad thing. First of all, Corrinne’s husband is a fine babysitter, and the grocery stores are open at night, so they could manage for a while. In fact, she was rather proud of Corrinne and her husband for waiting until their tax refund arrived to fix the car. Many folks in that position would have chosen to run up their credit card debt.

Then my daughter reminded me of one of my old sayings: “You never learn how to manage money until you don’t have any.” She and her husband had learned that lesson the hard way when they were in their 40s. At the time, they had racked up quite a bit of debt, but eventually they turned their situation around. They cut up their credit cards, learned to live within their means, and dug themselves out of their hole.

How fortunate for Corrinne that her parents had learned those lessons. I grinned as I realized that one of the most important lessons I’d taught my children had been passed down to the next generation.

 
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Article printed from InvestorPlace Media, http://investorplace.com/2013/09/where-to-find-yield-without-dividend-stocks-bonds-or-cds-v-ma/.

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