Yesterday, I pulled up to an automated teller machine (ATM) in my automatic-transmission car, opened my automatic car windows, and withdrew cash that had been automatically deposited in my bank account on payday. I then used some of the cash to take my car through an automatic car wash, and when I arrived home, I used the automatic garage door button to close the door behind me. Then I walked into the house just in time to hear the dishwasher beep to let me know it had automatically shut off after automatically drying my dishes. (I just wish it would automatically empty itself.)
We live in a set-it-and-forget-it world, and in most cases, the convenience of automation is fantastic. But, when it comes to money, I’m a proponent of thoughtful automation, or “thoughtomation.” What I mean by thoughtomation is simple: Use automated investment and payment systems, but keep track of them and routinely reassess whether they’re working well for your financial goals. In other words, when it comes to your money, set it, but don’t forget it.
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Global aging is a familiar idea. Not only are populations in the advanced economies aging rapidly, but so are those in emerging countries. For investors, the aging trend poses a number of broad, sometimes philosophical questions—the sustainability of public benefit promises to the aged, the impact of aging on markets, and expected investment returns.
But one issue is much more personal: the impact of aging on our own abilities (and the ability of our loved ones) to make informed financial decisions.
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We received a strong response to my post “I love you…now let’s talk money,” which primarily focused on newer couples approaching the topic of shared finances for the first time. I was struck by the number of candid comments from those of you—well beyond the honeymoon phase—who’ve been navigating the sometimes murky waters of shared finances for many years. Thanks for sharing so many of your own experiences and valuable advice.
One comment in particular inspired me to draft this follow-up post:
“Attn: Karin Risi – Good idea about indoctrination of newlyweds to financial information. Now how about us old folks at the other end of the line? It would be nice if we left this world together, but that is not likely. It is usually the man who leaves first and the widow [who] may need help. How about a list of “To Do’s” before it’s too late?”
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Many of my fellow bloggers have written about the recent turmoil in the markets. Rather than add my two cents to what has already been very well articulated, I’d like to take a different angle.
Have you noticed anything different about the ads on the radio, on television, or in the papers lately? Not long ago, I heard a radio ad inviting listeners to attend a seminar sponsored by the author of a best-selling “how to” investment book. The ad promised that attendees would be able to “forget about diversification, avoid mutual funds, and eliminate 401(k) contributions.” Another ad played on fears by leading with a “Worried about America?” theme and encouraging readers to send for a report promising to identify the “one sure thing for the second half of 2011.”
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Investors have every right to feel anxious about the markets.
First, we had the endless drama and squabbling over the federal debt ceiling. An agreement was reached, but before we could take a collective sigh of relief, the equity markets tumbled more than 4% last Thursday amid mounting concern over the fiscal health of several European countries. Late the following day, S&P downgraded its rating on U.S. debt from AAA to AA+ status. We worried over the weekend, and on Monday volatility was in full force, and the equity markets gave up another 6%. It’s enough to make any investor cry “uncle.”
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