older but wiser by Bill Storie

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By Bill Storie

Not sure about that to be honest. Do we really get smarter as we age?

I still think we can make stupid decisions for example, especially in retirement. There is an underlying correlation to money I believe. Let me have a go at that …

When we are working and getting paid we know that by and large we will get a fairly stable, certain amount of money each week or month. We can decide to go on a world cruise time-permitting of course, but if we don’t have enough money saved we can’t do it. If we decide to take out a loan to cover it, then we know that we can repay that loan from future earnings. Therefore we can make decisions in a fairly free manner.

In other words if we make a bad decision, then we can, to a large extent, recover from it in time, simply because we can still pay our daily expenses, mortgage, rent, food, and so forth. We don’t have to be worried about our everyday lifestyle. We won’t become destitute.

So, that situation, where money is a secondary consideration, allows us to make bad decisions, not intentionally of course, but if we goof, we goof.

Fast forward.

We’re retired. We are on a fixed income plan and a fairly predictable expenses routine. We know where every dollar goes and we watch cash flows etc. So, we are comfortable let’s say. We can live our life as we choose and we can have a little luxury now and again.

However we also know that we have no ability to get extra income if urgently needed.

If an emergency arises which requires a lot of money (health issues, property issues, family issues, etc) then we have to dip into savings, because we can’t easily get a bank loan because the repayment terms may blow our stabilized income and expense numbers.

But what if we now decide to take that world cruise. Not an emergency this time, just a decision we make. Or we decide to downsize. Or we decide to buy a small business. Or we decide to give a chunk of money to a son to help buy his first house, on the basis that he will repay us over a period of time. Decisions.

Then we wake up some time later and realize that the decision was wrong. That we made the decision based on whim, or just fancied it, or a spur of the moment head-rush. We made the decision without paying close attention to the money we have.

What happened to older but wiser?

We now realize that not only has our retirement fund been depleted by the amount of money expended, but the downstream income generated from our fund has been reduced as well. Our income will be less, perhaps much less, going forwards – forever.

Many people, particularly in retirement, take the “who cares” approach. Maybe they’re right. Maybe they reckon that the money they have will last for the rest of their lives both in principal and income terms. Or maybe they just couldn’t care less – and if they simply ignore any financial consequences of their decisions, they perhaps just buy the yacht after all. Are they making a rash decision?

What happened to older but wiser?

I think that we are more mature, we have more experience both from our own personal experiences or having observed other people and we can catch our breath and sleep on it, so to speak. So, in that sense we are probably wiser.

And I also think that because the underlying money considerations are clearly high on our watch list we probably do weigh up every aspect of any decision both from a common sense perspective and from an  ability to continue living comfortably perspective.

“Is there a point to this?” you ask.

Not really.

I just continually ask myself questions about should I do this, or that, now that I am retired. I think we all want as much out of this part of our lives as possible, yet we are more aware of money nowadays than ever before, and that as such, our decisions are heavily influenced by our ability to pay – more so, much more so, then when we were working.

So I am older for sure, but not sure I’m actually wiser.

Oh well. They tell me Christmas is around the corner.

By Bill Storie

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