Green Banana$: Financial Fitness for Life

By Jeff Wachman

You can improve your financial options in retirement—if you know what to focus on. Explore the savvy decisions you can make while earning a paycheck to fully enjoy life after work. This book will guide you through the important pre-retirement decisions that can lead to a better more stable and consistent income in retirement. The empowering message conveyed in this follow-up volume to Jeff’s first book “Achieving Financial Fitness “ is that just like a personal fitness program, Financial Fitness for Life is a financial fitness program that can last a lifetime.

Learn how to:
• make smart investments for a retirement that can last decades;
• structure your investments to pay you a retirement salary regardless of market cycles;
• learn about reverse mortgages, financing vacation properties and when and how to downsize;
• make informed decisions when planning your estate, your will and your powers of attorney;

• Language: English
• Publisher: Lulu Publishing Services
• Release date: Jun 12, 2019
• ISBN: 9781684704040

Book preview

WACHMAN

Copyright © 2019 Jeff Wachman.

All rights reserved. No part of this book may be reproduced, stored, or transmitted by any means—whether auditory, graphic, mechanical, or electronic—without written permission of the author, except in the case of brief excerpts used in critical articles and reviews. Unauthorized reproduction of any part of this work is illegal and is punishable by law.

This is a work of fiction. All of the characters, names, incidents, organizations, and dialogue in this novel are either the products of the author’s imagination or are used fictitiously.

ISBN: 978-1-6847-0405-7 (sc)

ISBN: 978-1-6847-0404-0 (e)

Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

Any people depicted in stock imagery provided by Getty Images are models, and such images are being used for illustrative purposes only.

Certain stock imagery © Getty Images.

Lulu Publishing Services rev. date:  05/28/2019

PREFACE

Famed comedian George Burns, when in his eighties, was once asked about his future plans.

Future plans? What future plans? Young lady, at my age I don’t even buy green bananas!

It was a great line, but in reality George Burns never stopped having future plans. He lived to be 100 and performed live onstage up to the end of his life. We don’t know if he bought green bananas, but we do know he bought a new Cadillac every year and only gave up driving it himself at 93, turning the vehicle over to a chauffeur when he could no longer see above the steering wheel.

He neatly summed up his philosophy on aging: You can’t help getting older, but you don’t have to get old.

Rules to Live By

In my previous book, Achieving Financial Fitness, I explored the strategies and the habits that build wealth and opportunity for a lifetime. This is a bold statement, but I am comfortable making it. Twenty years of experience serving the financial needs of individuals and families has been my laboratory. I have seen the explosive results my rules for success have enabled relative to the general public, who may not know, or may not follow, these rules.

You may be relieved to know that one’s education, status and income level are not limiting factors in a life plan to achieve a significant measure of financial independence. I am convinced that the path to a financially rewarding life can be followed by anyone, once they understand the fundamental rules of financial fitness and live by these rules.

In this second book, Green Bananas—Financial Fitness for Life, the focus is on the stage in life where your accumulated savings become your main source of lifestyle income. It is quite apparent that for my generation and the generations to follow, this stage in life is expanding and may span 30 years or more.

Consider the fact that most of us will work from our twenties to our late fifties or early sixties; thus our savings years may only be 30 to 40 years. I don’t think that any of us will be saving the equivalent of our annual income every year for 30 years to provide for a comfortable lifestyle that may last three decades or more. So deciding when and how to invest and which financial choices you must make to span a hypothetical 30-year time frame becomes essential. Dependable retirement income must adjust for potential inflation, stagnation and the inevitable market cycles (and occasional hot investment temptations) for a much longer time than in the past.

Inasmuch as you can improve your personal health through diet and exercise, so too can you exert a positive growth path over your financial health through a keen focus on, and a clear understanding of, the rules that guide lifelong financial fitness.

True Wealth

True wealth is really a function of what you have saved during your lifetime—not what you have spent.

If you look at analysis by the C. D. Howe Institute, you will see that they include as a major factor in assessing Canadian economic health our

per capita rate of saving. According to the Institute, not only do our savings provide a reserve for income after we finish working, but also surplus savings (personal, business and government) provide fuel for economic growth through the investment opportunities that these savings provide.

Our economy is fuelled by surplus savings. Banks use our savings and leverage them (with funds from the central bank of Canada) to make loans that finance our purchases and economic growth. We may use these loans in the form of a mortgage. Businesses will use these loans to finance equipment and expansion, and governments will use loans to finance infrastructure.

All these examples increase economic activity and can improve our quality of life. Of course, this can be a double-edged sword. If these activities are financed through debt that overextends our ability to pay to the point of default, the expansion of activity turns into a contraction, which crushes the economy and our standard of living. We witnessed this with the economic depression of the 1930s and, more recently, with the 2008 financial collapse, which was triggered by unchecked and fraudulent debt structures.

As my mother would say when we were growing up, You run into debt, but you crawl out. Truer words were never spoken.

As is true in most ecosystems in the natural world, success is built on the health of the smallest organisms. The phytoplankton which feed the krill must be healthy and plentiful for the whale to survive.

We as individuals must be financially healthy for our businesses, corporations and economy to thrive, so a healthy and successful economy is built on the strength of our collective ability to work productively and is multiplied in a significant way by our ability to save.

Savings deposited in bank accounts provide a source of funds for loans and mortgages. The banks can then borrow on the strength of these deposits to lend even more money, which stimulates the economy. Stop saving and the economy will grind to a halt. Savings in the form of stocks provide equity to companies that allow them to operate and grow.

Our governments must keep this in mind when evaluating taxation and economic policy.

A C. D. Howe Institute article published January 9, 2016, put it this way:

We want faster growth. But for that, central bankers around the world—need help.

Saving and investment are also critical. Consuming is fun, but sustainable growth requires saving—for public infrastructure and private investment in new equipment and technology. When federal and provincial deficits divert saving into consumption, they subtract from the wealth that boosts our living standards over time.

In writing this, C. D. Howe president William Robinson is referring to the fact that government deficits will eventually drain money from the economy in the form of taxation to fund these deficits. This can lead to a contraction of economic activity if these deficits are not justified by a need to invest in productive activities.

In today’s complicated world, it can be easy to lose sight of the fundamental principles that guide us and create societal wealth.

Saving and Subsistence Farming (What They Have in Common)

I like to compare a family of today to the self-sufficient farming families of past generations—families that were instrumental in building this country.

Often distanced from supplies and villages, these farm families had to be self-sufficient. To survive