by Joe Hearn | Sep 17, 2015 | Pursuits, Travel
Sleeping bag? Check. Tent? Check. Pocketknife? Check. Horse? Wait, what? For years my father-in-law has invited me on a cowboy camping trip that involves a four-hour horseback ride into the Wind River Range in Wyoming. It’s never quite worked out in the past, but this year I was determined to make it happen, which is how I found myself on the back of my trusty steed (a.k.a. El Diablo) riding into the mountains on the Friday before Labor Day.
It wasn’t just me. My father-in-law was there, of course, but also his brother-in-law Rusty (the organizer of the annual trip) and Rusty’s three sons. We were each riding a horse and then we had three packhorses that were carrying all of our gear. We made it to our remote campsite, unloaded the horses and began setting everything up. What followed was four days of hiking, riding, fishing and telling stories around the campfire, all while miles away from the nearest cell phone signal. Needless to say, it was a great time.
When the trip was over and we got back to civilization, I took a much-needed shower and started the long drive home. I had plenty of windshield time so I thought back on the trip and a few takeaways came to mind.
There will always be reasons to say no. As I mentioned earlier, my father-in-law has been inviting me on this trip for years. As much as I wanted to go, I had just as many reasons to say “no” this time as I had previously. Life is always busy. There will always be schedules, commitments and to-do lists. If you wait for the stars to align perfectly, you’ll never do anything.
“Yes” is more complicated than no, but much more rewarding too. It can often be complicated and costly to say “yes”, but that is usually the price of admission for doing interesting/fulfilling things. I had to take several days off work. The drive was 11 hours each way. And did I mention the horse? “Yes” gets you out of your comfort zone. It costs time and money. It takes effort. But to summarize Mark Twain, someday we’ll all regret the times we said “no” much more than the times we said “yes.”
Opportunities are finite. You and I will only have so many chances to say “yes.” To take the trip. To mend the relationship. To embrace the new opportunity. Even if the world were perfect, our opportunities are finite and—newsflash—the world is far from perfect. Case in point. Both my father-in-law and uncle-in-law are battling cancer. They’re doing well, but illness is always a good reminder that you won’t always have the opportunity to say “yes.”
Your body is in a constant state of entropy. The horseback ride up the mountain was difficult, but the horseback ride down the mountain was one of the craziest things I’ve ever done (think “The Man From Snowy River”). I managed it in my 40s, but I don’t think I’d want to attempt it in my 60s. As we get older, things change. Our bodies start to break down (entropy) and doors begin to close on certain opportunities. I wrote about this concept in The Funny Thing About Time. Take a minute to read it because it’s a good reminder.
Routine is the enemy of time. A guy by the name of Jed Jenkins said that and he is so right. When you’re stuck in a routine, time flies by. Getting out of your routine slows things down. It helps you look at things differently. It refreshes and makes you better when you get back. Four days in the mountains seemed like a really long time. Not because it wasn’t fun, but because I was doing something different and new. I had fresh eyes. I was having new experiences. Rather than my brain being on autopilot, I was aware and focused and present. If you regularly fill your life with new experiences, it won’t seem so short and hurried.
How about you? What travel plans are on your to do list? What have you wanted to get around to “someday”? What can you do today, this week or this month, to make those plans a reality? Don’t keep putting it off. Just go already.
~ Joe
by Joe Hearn | Aug 27, 2015 | Asset Allocation, Investing, Retirement, Risk
On Monday morning my friend texted me: “Holy cow! Don’t jump!” He was referring, of course, to the 1000+ point drop in the Dow. Thankfully, after more than 20 years in this business, I’ve gotten used to wild swings, so I wasn’t on the ledge (although in 2008 I was glad I work in a one story building). That said, volatility in the market can produce much fear and anxiety, especially if you’re at or near retirement. There is a 100% chance that market volatility will continue, so here are 5 things I’ve learned after two decades of bulls and bears that can help you keep your retirement plans on track.
Markets have recovered from every single downturn in history. Every. Single. One. The Panics of 1893, 1896, 1901 and 1907 (Seriously, calm down already!). The Crash of 1929. The recession of 1937-1938. The Flash Crash of 1962. Black Monday in 1987. The crash after Iraq invaded Kuwait. The 1997 crash caused by the Asian currency crisis. The Dot-com bubble in 2000. The crash after the September 11 attacks. The selloff in 2002. The financial crisis of 2007-2009. The Flash Crash in 2010. The markets are higher now than after every panic, bubble, crash and crisis in history, but be careful because…
You are not the market. Your personal experience with market volatility will largely be impacted by the actions you take before and during a crisis. Were you poorly diversified? Was your asset allocation totally inappropriate? Were you taking too much risk? Did you sell in a panic? Did you wait to get back in until the markets had already recovered? Did you stop making 401(k) contributions when things went south? Investment returns are not investor returns. Each year Dalbar does a study to see how well the average investor does compared to the markets. In short, the average investor only captures a fraction of the market return, largely because of poor behavior, so…
Sometimes it’s good to have help (especially if you’re near retirement). There are some people with the time, temperament, knowledge and discipline to handle their investments on their own. Others could benefit from a little help. This is especially true the closer you get to retirement because the issues you’ll be confronted with are different. Before retirement the major issue is saving. Most of us are at least familiar with the concept of saving (regardless of whether or not we’re doing it). We’re less familiar with the many moving parts that make up the typical retirement plan: calculating how much is enough, settling on an appropriate asset allocation, risk management, cash flow management, pension payouts, periodic rebalancing, retirement plan distributions, estate planning, Medicare, Social Security and the tax consequences of certain distribution strategies. You don’t want to mess those things up because…
Your runway is shorter now than it was during the last crisis. On average, stocks experience a 10% selloff about once every year and 20% pullback every 3.5 years. The average time of recovery for the former is about 4 months. For the latter it takes about 22 months. So while my earlier point is absolutely true—markets have always recovered—you may not have enough time to wait it out. The closer you are to retirement, the closer you are to withdrawing money from your accounts. And if you’re taking distributions while the markets are down, your money won’t last as long. So use the current crisis as a not-so-friendly reminder to…
Focus on what you can control. John Wooden once said: “The more concerned we become over the things we can’t control, the less we will do with the things we can control.” It’s easy to focus on headlines, markets and political uncertainty, but we can’t really do anything about them so it’s an exercise in frustration. We can control things like saving, debt reduction, asset allocation, and risk management, however. Focusing on those actually produces results. Unfortunately, the bull market of the last six years has lulled many into a false sense of security. Use the current volatility to make sure that your portfolio is appropriate and your plans are on track.
~ Joe
by Joe Hearn | Aug 5, 2015 | Health, Medicare
Quick Note: Sorry things have been quiet around the site for a few weeks. I was on vacation with family and friends and prior to that I was scrambling to get things wrapped up at the office. I’m home and caught up, so it’s back to regularly scheduled programming. Thanks for your patience.
Being on the road made me think of a question that clients often ask me:
“Does Medicare cover me when I travel?”
The answer, of course, depends. And it would be bad enough to get sick or injured on vacation without also finding out that Medicare won’t cover the expenses, so let’s take a look at whether your Medicare will travel with you.
What type of Medicare do you have?
Coverage varies depending on whether you have original Medicare or Medicare Advantage. Original Medicare is just Parts A and B (hospital and outpatient services) supplemented with a Medigap policy. Medicare Advantage is when you have Parts A and B and then also purchase Part C, which is coverage provided by Medicare approved third-party health insurance companies. Each of these types of Medicare works differently depending on where you travel.
Where are you going?
Original Medicare is extremely flexible within the U.S. (which includes all 50 states as well as Washington D.C., Puerto Rico, U.S. Virgin Islands, Guam, American Somoa and the Northern Mariana Islands.). There are no networks or preferred providers with original Medicare, so you can get care at pretty much any facility that accepts Medicare.
Medicare Advantage is a bit less flexible. Coverage is most comprehensive if you get care within the network of the private health insurance company that is providing you Medicare Part C. Generally speaking, the closer you are to home, the better your coverage will be. Having said that, if you’re having a medical emergency you can use your Part C pretty much anywhere in the U.S. and it will be covered. Call your insurance company if you’re unsure if a particular provider is “in network” or “out of network.”
Except in very limited circumstances, neither type of Medicare (original or Advantage) will provide coverage while you’re traveling outside the U.S. They may cover certain services while you’re on a cruise ship or while you’re traveling across Canada on your way to Alaska, but that’s about it. Some Medigap policies cover emergency medical services while traveling abroad, but there are limits to the coverage. They generally pay for 80% of covered services after meeting a $250 deductible with a lifetime maximum of $50,000. Bottom line—if you’re planning a trip abroad, it’s best to buy a separate travel insurance policy with generous health coverage. It’s also a good idea to get a policy that includes evacuation insurance. As you might imagine, it would be very expensive to pluck you from the bottom of the Grand Canyon or from the rain forest in Costa Rica if you are sick or injured. Those costs can run into the tens of thousands of dollars and neither Medicare nor Medigap covers the cost of a medical evacuation.
So before you hit the road, do a little research to make sure you’re covered and your trip will be a lot more enjoyable. Bon Voyage!
~ Joe
Photo Credit: Nick Kelly
by Joe Hearn | Jun 26, 2015 | Happiness, Health, Lifestyle Design, Retirement
I just finished reading Zen and the Art of Motorcycle Maintenance. It’s a bestselling classic, but I must confess that I wasn’t a huge fan. It did have a few great nuggets that made me think, however, and today I’d like to share a short passage from the book that could have a profound impact on how you approach retirement. Consider it Zen and the Art of Retirement.
In the passage, the main character is talking about the problem of value rigidity, which refers to our tendency to cling to certain preconceived ideas of what’s important and what’s not, even when events or circumstances change. To make matters worse, we sometimes put a high value on things that we shouldn’t and then stubbornly cling to our error. Here’s the text followed by a few takeaways for your life and retirement.
“All kinds of examples from cycle maintenance could be given, but the most striking example of value rigidity I can think of is the old South Indian Monkey Trap, which depends on value rigidity for its effectiveness. The trap consists of a hollowed-out coconut chained to a stake. The coconut has some rice inside which can be grabbed through a small hole. The hole is big enough so that the monkey’s hand can go in, but too small for his fist with rice in it to come out. The monkey reaches in and is suddenly trapped…by nothing more than his own value rigidity. He can’t revalue the rice. He cannot see that freedom without rice is more valuable than capture with it. The villagers are coming to get him and take him away. They’re coming closer — closer! — now! What general advice…not specific advice…but what general advice would you give the poor monkey in circumstances like this?
Well, I think you might say exactly what I’ve been saying about value rigidity, with perhaps a little extra urgency. There is a fact this monkey should know: if he opens his hand he’s free. But how is he going to discover this fact? By removing the value rigidity that rates rice above freedom. How is he going to do that? Well, he should somehow try to slow down deliberately and go over ground that he has been over before and see if things he thought were important really were important and, well, stop yanking and just stare at the coconut for a while. Before long he should get a nibble from a little fact wondering if he is interested in it. He should try to understand this fact not so much in terms of his big problem as for its own sake. That problem may not be as big as he thinks it is. That fact may not be as small as he thinks it is either. That’s about all the general information you can give him.”
Here are three important takeaways from this story:
Sometimes, especially during times of change or major life transitions (e.g. retirement), we need to revalue things so that we can realign our actions and beliefs with our new life. Said another way, the types of things that are important to us in the new life stage are likely different from the things that were important to us during the previous life stage. We need to decide what those new things are and elevate them to their proper position. If we don’t, we’ll cling to things that used to be important to us (e.g. work, certain relationships, houses, how we spend our free time, hometowns, etc.) and our tight grip on those keeps us stuck in the monkey trap, unable to pursue our new plans.
Sometimes holding the tangible thing can cause you to lose the intangible. There’s nothing wrong with having nice things, but everything we own takes some of our time and some of our money. If we focus too much on the tangible (houses, cars, gadgets, etc.), that leaves little time and money left over for the intangible (travel, experiences, hobbies, relationships, pursuits, etc.).
Sometimes we don’t understand how much we value the intangibles until we lose them. I was reading a study recently that listed out the types of things that were important to retirees. Number 1 was financial security (no surprise there). Number 2 was health. In the story above, the monkey got the rice, but it cost him his freedom. I don’t know about you, but I’ve definitely made sacrifices to my health as I pursued wealth (a.k.a. career). I’m sure you have too. We work hard. We’re busy. No time for a healthy lunch. No time to exercise. No time to get enough sleep. We take our health for granted. In our own way, we’re grabbing for the rice, but if we’re not careful it could cost us a major intangible like our health, and consequently our freedom to pursue many of our retirement plans. We may take it for granted now, but it will be sorely missed when it’s gone.
How can we avoid monkey traps?
What that question is really asking is this: How can we tell if we’re hanging on to something trivial at the expense of something important? How can we tell the genuine from the counterfeit? To answer that, let’s look at an example from the Secret Service. In addition to protecting the President, the Secret Service is in charge of protecting against counterfeit currency. When they’re training new agents to recognize counterfeits, they don’t sit them down in a room with a bunch of counterfeit bills and point out the flaws.
Instead they sit them down in a room with currency experts and pristine examples of genuine bills. They go through every detail. Why it’s there. What it represents. How it deters counterfeiters. How difficult it is to reproduce. How to look for it. They learn what the ink looks like. They learn what the paper feels like. They learn what the bill smells like.
By studying what makes a bill genuine, a funny thing happens. Without ever studying the counterfeits, agents can spot them from a mile away because they know what the genuine bills look like. We can do something similar. If we sit down and decide what’s genuinely important to us—what we value above all else—then when imposter opportunities come along, we will be able to recognize them for what they are. Then rather than shoving our hand inside and grabbing for the rice, we’ll keep right on walking because we have a clear idea of what we really want out of life and we’re taking those plans very seriously. If we can all do that, then we’ll be well on our way to an intentional, meaningful retirement.
~ Joe
by Joe Hearn | Jun 18, 2015 | Learning Challenge, Pursuits
When I was in college, I wanted to take a photography class as an elective. Unfortunately, I was required to take “Fundamentals of Drawing” as a prerequisite. I can’t draw to save my life, but I gave it a shot, assuming that the teacher would grade according to the “finance student who wants to take the photography class” curve.
On the first day of class the professor said, “I know many of you are here because you need this class to take the photography class. I am not an easy grader. If your drawings are bad, you will fail the class.” And that’s the story of how I ended up not taking a photography class in college.
Thankfully, we live in a completely different world today. Most of the rules, roadblocks and gatekeepers are gone and you can learn just about anything you want online, often for free.
Want an example? Just a few weeks ago I learned how to tile a floor watching a 5-minute YouTube video. Then I tiled my floor. It turned out great. I learned how to adjust my sprinkler heads the same way. Ditto with how to play new songs on my guitar.
YouTube is great, but sometimes you want a more formal learning process so you can take a deeper dive into a subject. For that, I’ve been experimenting with three companies that provide thousands of interesting online courses.
Coursera
What it is. Coursera is an online education website started by a former Stanford professor. The company has agreements with more than 120 top universities (e.g. Princeton, Yale and Stanford) to make their most popular and interesting courses available free of charge to anyone who wants to take them.
How it works. Courses are a combination of videos, assignments and tests and usually take four to six weeks to complete. You study at your own pace and can go back to review material if needed or pause the lecture if you want to look something up, do further research or cook dinner.
What it costs. The courses are free for anyone who wants to take them, but you can pay a nominal fee (usually between $50 and $95) if you want to receive a course certificate that you can show a potential employer or list on your resume.
Types of classes. Imagine a college course catalog and that’s what the list of Coursera courses looks like. Want to take a nutrition class from Johns Hopkins? Check. How about a music class from the Berklee College of Music? Check. Computer programming at Stanford? Law at the University of London? The history of Beatles music at the University of Rochester? Check, check and check.
CreativeLive
What it is. CreativeLive was founded by the super talented Chase Jarvis. If you’ve ever seen an ad or commercial for Nike, Apple, RedBull or Starbucks, chances are you’ve seen Jarvis’ photography and video work. The idea behind the company is to bring together some of the top creative minds in the world and do live classes in their areas of expertise.
How it works. Browse the list of upcoming classes and sign up for whatever sounds interesting. The live classes are often free, but if you miss the class or want to browse the catalog of hundreds of past classes, you can take those for a small fee.
What it costs. Again, the live classes are often free, but if you sign up for a past class from the catalog, they usually cost anywhere from $29 to $99 (some are more) depending on how in depth the class is.
Types of classes. There are classes in areas like photography, videography, design, music, money, travel and life. For example, I recently took a class on travel hacking (taking great trips for less money) taught by a guy who just finished visiting every country in the world. I’m also signed up to take an upcoming class on travel photography in July. Those are just a few examples, but there are hundreds of others to choose from.
Udemy
What it is. Like the others we’ve discussed so far, Udemy is an online learning platform. Rather than providing just college courses (like Coursera) or focusing on a narrow range of topics (like CreativeLive), Udemy offers a broad range of skill building classes in a ton of different areas.
How it works: Sign up by creating a user name and log in and then start browsing courses to take. And if you have a particular area of expertise, Udemy makes it easy for you to create your own course and sell it on their platform.
What it costs: Some classes are free, but most cost between $29 and $99.
Types of classes: There are more than 30,000 courses in areas like business and entrepreneurship, academics, the arts, health and fitness, language, music, and technology.
One of our core beliefs here at Intentional Retirement is that curiosity and a willingness to learn will often result in an interesting and rewarding retirement. The resources discussed above make that easier than ever.
~ Joe
P.S. A little weekly inspiration from over on our Facebook Page:
There will always be reasons to say no. As I mentioned earlier, my father-in-law has been inviting me on this trip for years. As much as I wanted to go, I had just as many reasons to say “no” this time as I had previously. Life is always busy. There will always be schedules, commitments and to-do lists. If you wait for the stars to align perfectly, you’ll never do anything.
Routine is the enemy of time. A guy by the name of Jed Jenkins said that and he is so right. When you’re stuck in a routine, time flies by. Getting out of your routine slows things down. It helps you look at things differently. It refreshes and makes you better when you get back. Four days in the mountains seemed like a really long time. Not because it wasn’t fun, but because I was doing something different and new. I had fresh eyes. I was having new experiences. Rather than my brain being on autopilot, I was aware and focused and present. If you regularly fill your life with new experiences, it won’t seem so short and hurried.
