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|Subject: OT - My Dad and His Money||Date: 12/13/2005 7:42 AM|
|Author: CultClassic||Number: 10587 of 41122|
I was home visiting my dad a few weeks ago. He is within a couple of years of retirement. For the first time we had a discussion about his assets and retirement savings. He was typically very tight-lipped about his savings, so I really didn't know how much he had or what he had done with it. He had mentioned his investment in at least one stock mutual fund throughout the years so I had certain assumptions about how he had invested. Nonetheless, knowing that I had been studying and developing my own investment strategy, he now was asking me for some help constructing his portfolio.
We started developing a strategy to put some in stocks spread across large, mid, and small caps, some in bonds, and a small percentage in foreign stocks and REITS. However, when it came time to divvy up the actual funds, there was only a few thousand dollars in his stock account.
I will tell you that my dad was born during WWII and his elders who had advised him were children of the depression and thus deathly afraid of the stock market. How the reality of this fear came crashing on me when I then found out that over 95% of his assets were in a single ultra conservative bond index fund. He had been plowing money into this since the early 70's, missing out entirely on the largest sustained bull market of the century!!
I said “Dad, are you kidding me?” He replied “Do you know how many people have lost money in the stock market? I wasn't going to risk our retirement money.” I remember as a kid listening to my mom and dad argue about money. But my mom had stopped arguing years ago. Their spending habits weren't that different. Now I know what the argument was about.
I realize that it's his money and he is the one who has to sleep at night. At least he had the discipline to consistently save. But I just feel like banging my head against the wall as I ponder whether what he has saved is enough to last for another 30 years if needed.
The situation has made me think about the emotions that rule one's financial decisions. It's as though you have to steer the course between unrealistic, exuberant optimism and the paralyzing fear of failure. I guess my dad just got siderailed. Anyhow, I hope I'm not patronizing him (or anyone else). He is a better man than I am in most ways.
Sorry for the long lament but I thought this story might help someone broach the subject of money with a significant other. Fwiw, my advice is don't assume and don't wait too long.
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