From Thanksgiving to the New Year, we often pause to give more charitably, to express our gratitude, and to reflect on life lessons learned.
The life lessons resounding in my mind play like a Jim Croce song, “You don’t tug on Superman’s cape. You don’t spit into the wind. You don’t pull the mask off that old lone ranger.”
In other words, the most memorable lessons in life often come from mistakes.
Here are some:
1. Health insurance mistakes
For example, don’t assume all health insurance plans have a calendar year deductible. I made a costly mistake with our coverage – scheduling surgery in December was stupid if our new plan’s deductible-year ended on Nov. 30. Ouch, new plan year, new deductible.
2. Vacation travel costs
Vacation travel is getting more expensive but airline seats are getting smaller (or I am getting bigger).
3. Stress’ wear and tear
If stress doesn’t wear you down, it can certainly increase your medical bills. Note: people ask me if financial planners worry about the market. My answer is, not as much as I worry about people not having a plan for possible long-term care expenses.
4. Family lender pains
Don’t be the family bank. I have loaned money to family, and not been repaid. I have loaned money to friends and been repaid on time and in full.
5. Real estate rental woes
Rental real estate investing can be great, and it can be a real pain in the neck. Renting to college students? That can be a real pain in the gluteus maximus.
6. Cash reserve
I’ve learned some financial life lessons from other people and trusted resources. For example, my father showed me a simple truth – maintain a reasonable cash reserve, it is a big deal.
7. Insurance review
Periodically review your insurance and retirement account beneficiary designations to reflect marriage, birth, death, divorce, or changes in your estate plan.
8. Charitable donations
Give to charitable causes because they matter to you, not just for a tax deduction (that may now be replaced by a higher standard deduction).
9. Stocks, bond and patience
Over most five-year rolling periods, stocks have outperformed bonds and bonds have outperformed cash accounts. Growing wealth, aka “investing,” requires patience and discipline.
Stocks (companies) don’t really care who is president when they turn the lights on again tomorrow.
10. Health Savings Accounts
If possible, treat a Health Savings Account (HSA) as an accumulation vehicle for future health expenses in retirement.
11. Raising children
Raising children is like gardening. In the spring of their lives, you toil to prepare and plant a garden. During the growing season, you water and feed and prune and pull weeds. Finally, as they blossom and bear fruit (i.e. demonstrate that they are good human beings) you realize that all of your diligent efforts were not in vain. Sidebar: your children are financially illiterate until you teach them via example or intention.
12. Toilet paper. Yes, toilet paper
Don’t scrimp dollars on single-ply toilet paper. Spending more on two-ply is a quality-of-life investment.
Speaking of discomfort, author and entrepreneur Jim Rohn summed it up best, “We must all suffer one of two things: the pain of discipline or the pain of regret or disappointment.” It is great life-lesson: live without (financial) regret.
“…and you don’t mess around with Jim!”
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