Back to school during retirement to maintain mental health

How many of us dread the approach of retirement? Retirement is the milestone that serves as a transition from a working life of routines to a phase that most of us are ill-prepared. Retirement can either turn out to be good or bad in our mental and physical functions, and social, financial or spiritual well-being. This article will briefly discuss the effects of retirement and look into the option of going back to school during retirement to keep mentally healthy.

Dr. Sing Lin, PhD, in his 2002 study on “Optimum Strategies for Creativity and Longevity” highlighted the conclusion from various studies of major American pension funds’ payout to pensioners that for every year one works beyond age 55, one loses 2 years of life span on average. The study also states that a person retiring at 55 years of age can look forward to living another 25 to 30 years after being able to put into place a retirement plan to retire early and live comfortably. However, it is important to note that such a plan would necessarily include elements to maintain physical and mental health.

Whilst we can seek advice on diet and exercises and act on whatever is required to maintain physical health, the issue of maintaining mental health is not one that can be easily addressed.  One of the ways is to be engaged in some form of work done at a non-stressful leisurely pace during retirement. Why work? Assuming we have a measure of financial freedom in retirement, work then will be mainly to continue keeping our mind active and maintain mental health to prevent the onset of dreaded diseases such as Alzheimer’s disease or dementia after having actively exercised the brain for the majority of the past 55 years.

So, what can we do that will not put us in unnecessary stress and yet afford us the opportunity to actively exercise the brain in doing things we like? Well, going back to school will be high on the list of possibilities. Objectives in education in retirement are different from that to gain a certificate for a well-placed position at the start of our careers. Many are ‘forced” by circumstances to undertake courses of studies to get the right jobs to earn a living and not courses of choice. In retirement, we can take a course in whatever subject that takes our fancy, whether they are short courses or challenging doctoral studies and research, to satisfy a burning desire or for self-actualization. Key is the choice to do what we like and when we like without having the need to complete the journey as an option.

In retirement, we can continue to enjoy and do whatever we like such as taking holidays to discover new places or to be with loved ones, move to a new home, or be engaged in charitable work without detriment to our ability to be go back to school as and when we like. The availability of online learning (for those seniors who can master the use of the internet) and ease of communication facilitates our doing so. In addition, most institutions of higher learning encourage seniors to enroll with them with many providing relaxed entry requirements and discounted entry fees, whilst local authorities and other organizations often provide free entries to short courses in various subjects of interest.

In conclusion, going back to school in retirement, as in school days during our formative years, also affords us the opportunity to make new friends and acquaintances and expand our knowledge, worldviews and horizons from peoples all over the world. In doing so, we can continue to make a difference in our lives and the lives of others whilst keeping us mentally healthy. The words of Alvin Toffler sums up the importance of lifelong learning – “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn”.

Personal financial debt crisis solution – the golden rule and guidelines

Lately we have been inundated with news in the media on the financial debt crisis in Europe and also on perhaps the mother of all debt crises in the USA. We do not need an economics guru to tell us why such crises occur as we all know that debt arises when nations need to borrow to spend more than what they can afford.

Zeroing in on a personal level, each of us will also suffer a similar financial debt crisis if we need to borrow to spend on things we cannot afford. So, how do we solve our personal debt crisis? The golden rule is never to get into debt. Easy isn’t it? If I don’t have a debt, I don’t have a debt crisis and can dispense with thoughts of having plans for debt consolidation, debt management, debt relief or similar solutions to debt problems. More importantly, if I am in debt, I will be a servant to the lender and that is not a good position to be in. “Easier said than done” will be the obvious retort from many. Nevertheless, if wisdom, knowledge and discipline are with us, then our spending needs and cash management will be well-guided and will not land us in debt.

Living within our means is a key principle and is even advocated in mainstream religious teachings. The Christian Bible discourages Christians to be in debt and if in debt, to get out of it as quickly as possible. However, how many of us can keep a golden rule and not break it? Life is not so simple and most of us will incur a measure of debt at some points in time. Whilst the use of debt may be unavoidable, especially when there are so many financial institutions tempting us with “easy” money via credit cards and personal loans, we need to carefully evaluate the purpose of such a use.

Thus, under what circumstances would it be alright for one to engage in the use of debt? There really are no right answers applicable to each and every individual and every particular situation. Perhaps the following could serve as useful guidelines in the use of debt :

(a)    Do not buy something because it is on sale unless that item is really needed.

(b)   In acquiring an asset, purchase one that is really needed (like a dwelling place), capable of appreciation in value, and can also be easily disposed when needed to do so.

(c)    If there is really a “sure winner” investment, then ensure that the item can be disposed at a value greater than its purchase price when required to do so.

(d)   A caveat to the above will be to ensure that there is always sufficient cash to pay the instalments or repayments without detriment to cash required for daily essentials.

In summary, this short article is not intended to prescribe solutions to manage and get out of debt but to encourage us to refrain from getting into debt, and if the use of debt is inevitable, then to do so following certain guidelines. A parting sharing will be this - whilst it is good for us to strive to do better to have a better future, we should nevertheless be content with what we are and have without the use of debt.

Leaving a financial legacy

One of my earlier articles touched on living a meaningful life and making a difference with an exhortation to consider the legacy we will leave behind. Well, what exactly do I mean by “legacy”? The American Heritage Dictionary defines “legacy” as “money or property bequeathed to someone by will” or “something handed down from an ancestor or predecessor”. The latter definition is more applicable generally and the lives we lead and notable achievements (or lack of them) will determine how we will be remembered. This article is intended to briefly discuss the issue of legacy and how to leave a lasting financial legacy.

Looking at prominent people of the past, each of us will have our favourite people who have left their indelible marks and lasting legacies. Mahatma Gandhi sought peace and change through passive resistance and was therefore a burning torch for others like Martin Luther King and Nelson Mendela who fought against oppression. In government, President John F Kennedy left a lasting legacy of many achievements that have helped transformed not only the USA but also  the world to be a better place including the establishment of the US Peace Corps and successful handling of the Cuban missile crisis that averted a nuclear war. Elvis Presley can be considered a musical legend with fans still having annual gatherings to remember the man and his music. Similarly idolized is Bruce Lee, who is considered the most influential martial artist in life and on the silver screen.  History remembers not only men of peace but also men of war and Adolf Hitler is one such man and deemed to be responsible for the millions of deaths during the Second World War and the Holocaust.  In helping humanity, we remember Nobel prize recipient Mother Teresa who dedicated her life to helping (especially in India) the poor and down-trodden, the sick, and the dying. Lately, we have also been made aware of billionaires like Bill Gates and Warren Buffet who have intentionally decided that a substantial part of their wealth will be given to charitable causes to help society at large.

The aforementioned are famous people and their legacies but what of mere mortals like most of us? Rich or poor, famous or insignificant, each of us will leave behind our respective individual legacies. Whilst it may not be possible to plan and live our lives such that history will record the good that we would want to do, we can however take control of the way we would like to write our financial legacy.

Leaving a financial legacy that is lasting and beneficial entails the ability to amass wealth (tangible and non-tangible assets) and structuring a plan that would ensure the wealth continues to grow to benefit those we love (whether individuals or organizations like charitable foundations ) from the legacy. Recognizing this objective, we need to note the adage “easy come easy go” and prevent wealth being squandered and in this respect we would do well to note the Chinese saying regarding wealth not being able to pass beyond three generations.

Generally, a will is the instrument we use to pass down inheritance to our loved ones or charitable organisations. The high net worth may set up a trust to effect the legacy they may wish to leave behind. Writing a will or setting up a trust will not be discussed in this article (maybe in a future article) but one can always consult a lawyer or financial advisor if help is needed.

In summary, the important thing to remember is that we leave behind sufficient funds and tangible assets in a structured plan that will continue to grow to benefit those intended in leaving a lasting financial legacy. Perhaps the focus on financial legacy may not be as important as being able to leave a legacy of having spent our time wisely and making a difference in the lives of others. Billy Graham, the well-known and respected evangelist, sums it all when he was quoted as saying “The legacy we leave is not just in our possessions, but in the quality 
of our lives.”

Handling international students – how lecturers can help

Education is becoming a fast expanding industry, not only in developed economies but also in developing countries looking towards grabbing a share of a purportedly lucrative money-making industry. This article will provide an insight into two major problems faced by lecturers in handling international students and suggested solutions to these problems.

1.    Use of agents in students’ choice of educational institution and course of study

Despite globalization and the internet, many parents and students alike, especially from third world and emerging economies, rely on marketing agents to arrange the choice and registration of study in an educational institution, oblivious to the many pitfalls along the way through such an approach.

Oftentimes the agent will over-sell to get a registration to earn a commission and the student will be truly disappointed when faced with situations not as expected. Agents often paint beautiful pictures of the institution and convince students on how easy it is to get a recognized degree at a particular institution.

It is recommended that educational institutions undertake their own recruitment of international students to ensure that enrolled students are fully aware of the details of the institution and course of study. Failure of a good institution-student match during enrolment will be detrimental to both parties concerned with the reputation of the institution at risk and the student failing to achieve their desired aspiration to gain an internationally recognized education

Confronted by the students with problems faced with issues like payment of course fees, details and recognition of courses, and assessment methods, lecturers will also need to be good counselors. Lecturers should not leave problems to be solved by the administrators only as such issues also affect the approach in delivering the course content and assessment, necessitating changes to cater to the needs of the students which will present great challenges to lecturers in maintaining quality standards in education.

2.    Proficiency in English language

As English is often the main medium of instruction in courses open to international students, lecturers are often faced with students lacking in the understanding of the English language. Educational institutions that lower the entry requirements with regards to proficiency in the English language attract even more problems. Often, the required standards for international students as determined by results of their test scores in an international standardised test of English language proficiency test such as  IELTS (International English Language Testing System) or TOEFL (The Test of English as a Foreign Language) are not strictly adhered to.

It is imperative therefore, especially for educational institutions that do not adhere to international standards, that there must be avenues for students to improve their command of English such as additional English language lessons. Lecturers can help by speaking slowly and using simpler words in delivering the lessons. Students should be encouraged to speak and discuss issues in class with marks awarded towards final exam scores not only as motivation for them to participate in class discussions but also to determine their understanding of the subject matter discussed.

In conclusion, lecturers, as educators, must assist students to understand and absorb at least the minimum required to pass the required standard of an examination. Non-academic related problems faced by students will be a distraction and will have a negative psychological effect on them that will result in bad performance in class and examinations. So, it is beholden on the lecturers to help solve non-academic problems where possible and be able to tailor academic content and delivery to suit students’ needs without lowering academic standards.

There are a few more critical issues that confront lecturers regarding international students and these will be left to another posting at a later date. Two books I can recommend for reading by lecturers and students alike are “Understanding your International Students” by Deborah Mitchell and “Beyond the Answer Sheet: Academic success for International Students” by William B. Badke. Do review and make a purchase if suitable for your needs – links from this blog are placed to facilitate this – happy reading.

Investing without Financial Plan and Goals

In times of plenty, we seek safe haven for surplus cash that will generate passive income for the future. In times of need, some of us take desperate steps to increase our money supply to meet the demands of the day. Both actions necessitate investment decisions, decisions that many of us are oftentimes not qualified nor experienced to make wisely without help. Thus, begs the need to know the answers to the four “wives” (why, when, where, who) and one “husband” (how) questions with respect to investing and financial planning. This article will discuss the two most important pre-requisites to making wise investments.

As a licenced financial planner and a business and financial advisor to small and medium companies, I am often asked to give investment tips or advice. Whether I am a fantastic investment guru or tipster or not is immaterial as I would always avoid answering such questions without knowing and understanding the financial background, status and financial goals of the questioner. This article is not intended to be a primer in investing or financial planning as one can select a book on the subject in any good high street or online bookstore. Rather, I would like to share what I consider to be the top two amongst the many pre-requisites an investor 

should consider before making an investment decision.

1.     Have a Financial Plan with SMART goals

Planning in general is an activity we engage in all the time - planning for a holiday, planning for a wedding, or planning for any other event or planning to achieve a particular objective. However, how many of us really get involved in developing a truly comprehensive personal financial plan and implement the same? If not, why not?

The Certified Financial Planner Board of Standards, Inc (CFPBSI) defines financial planning as “the process of meeting your life goals through the proper management of your finances”. Life goals are goals dear to us that we would like see come to pass, especially during our lifetime. Such goals can be as simple as saving to buy a car or for a cruise around the world, or a bit more challenging in investing to mitigate the effects of inflation in planning for retirement.

In goal setting, it is imperative that we be rational and do not set goals that will be too difficult to achieve in the timeframe required else we can be truly discouraged and discard the plan altogether. Thus, it is good to follow the SMART principle, taught in Management 101, which states that our goals should be Specific (say, save to buy our particular dream car), Measurable (say, save $50,000 to buy a car), Achievable (say, plan to buy a car costing a sum we can afford), Realistic (as in planning to buy a car and not a trip to the moon although it can come true for some), and Timely (say, achievable within a reasonable time period).

Knowing our SMART financial goals will enable us to plan how to achieve them. If we are not sure how to develop a financial plan that is workable for us, we can seek the services of a financial planner. A point to note is to ensure that we consult a financial planner that is adequately qualified (say, having the CFPBSI’s Certified Financial Planner certification that is recognized worldwide) and experienced (and perhaps licenced to practice as a financial planner by the appropriate authorities to ensure accountability and ethical behavior).

2.      Understand your personal financial risk profile

Prior to making any investment decisions, it is necessary that we understand ourselves in relation to our individual financial risk profile. All of us take risks in our daily lives and these could include crossing a busy street, or taking a flight somewhere, or even getting married considering the increasing number of separations/divorces. It is important to note that different people have different thresholds in the level of risk they are willing to take for any number of reasons.

Assuming a risk that we are not prepared or capable to cope with may result in adverse consequences and detrimental to our health. Similarly, the level of financial risk we are willing to assume or can tolerate should be carefully evaluated and such an exercise will normally be based on a set of criteria relevant to each individual.  In addition, the risk profile of an individual can change as his or her personal status changes and it is generally accepted that a younger person can assume a higher financial risk compared to a person nearing retirement as the former has time to accumulate or recoup losses due to investment decisions not realizing their desired potential.

Thus, it is wise to understand our financial risk appetite and risk profile so that the investment decisions we make will commensurate with our risk profile. Investment opportunities abound in the marketplace for all risk profile types, whether one is considered a conservative or can take high risk.

In summary, the above are what I consider the two essential pre-requisites to investing and the others mainly pertain to details in understanding investing, investment strategies, and investment opportunities that can be found in any good investment text books or articles, advice from investment professionals or financial planners, or perhaps can be the subject of a follow-up article by this writer. A last piece of advice is to re-emphasise the fact that we should not make any investment decisions that can adversely impact our financial well-being until we have a sound financial plan, and if professional advice is required, do always consult a qualified and licenced financial planner to help develop one’s personal financial plan. Always remember this well-known adage - FAILING TO PLAN IS PLANNING TO FAIL.

Stamp collecting – a hobby or investment?

Knowing that stamp collecting is a hobby of mine, a friend asked me to pen a few words on my thoughts on whether I regard stamp collecting as a hobby or investment since I have spent a not too insignificant amount of hard-earned money on this hobby of mine.

An English schoolmaster, Rowland Hill, invented the adhesive stamp in 1837 and the first issued postage stamp, the British Penny Black stamp, was released on May 6, 1840. The Penny Black may be the first issued, but it is not the most expensive as one could buy a good one at about £200-£300 from the famous UK retailer Stanley Gibbons. The 1885 Swedish 'Treskilling Yellow' mis-print is now considered by many as one of the most if not the world's most expensive stamp when sold in 1996 at £1.59 million. That being the case, should one consider serious stamp collecting a hobby or investment?

My interest in stamps goes back to the days when I was a little boy admiring the beautiful little pieces of paper stuck on the top right hand corner of an envelope. Ignorant as I was then, I would just peel the stamps off the envelopes, often tearing bits off it in the process, and keep the stamps in a shoe box. Not that I have a lot them, but I needed a big box to store the envelopes prior to peeling off the stamps.

As I grew to take a more than cursory interest in stamps, I discovered that I was doing it all wrong in the way that I went about collecting stamps. The “Dummies” book series was not in the bookstore then and so it was a difficult learning process that I had to go through to learn the finer points in stamp collecting. As my stamp collection grew in quantity and quality, especially after I started earning an income and thus able to buy the stamps I fancied and could afford, I discovered the ordeal of having to store the stamps. No longer was I collecting stamps only, but also First Day Covers and other philately materials of interest. Shoe boxes were no longer the correct storage media and substantial funds (based on my meager income then) had to be expended to buy stamp albums and other paraphernalia essential to properly collect, store and display stamps.

Fast forward to the present time, my stamp collecting hobby has now been transformed from a small boy’s fancy in beautiful pieces paper and collecting all sorts and sundries to a more specialized and intentional effort in collecting stamps based on selected countries and themes. The opportunity to work internationally afforded me the access to build my collection at a faster and less costly rate and I believe I now have a notable collection by my standard (bearing in mind I am only an amateur collector with limited funds) that includes a priceless collection of a particular country’s stamps. Priceless because I cannot put a price to it because very few have interest in that country’s stamps in the early days and the only other similar collection I have seen is in a museum.  

So, would one consider my interest in stamp collecting a hobby or investment? I would reckon it depends on one’s intention with regards to the collection. Will I be selling it anytime soon or never, as it is intended to be a family heirloom? Also, is my collection investment grade and will there a buyer interested? The jury is still out and details pertaining to serious stamp collecting for investment purposes will need to be left for another day. In the meantime, I am enjoying stamp collecting as a hobby that could possibly turn out to be a highly profitable investment.

Make a difference

A gentleman came to see me the other day and asked how he could set up a business to help the less fortunate with the little savings he had. He does not know much about business but he realised that his life hitherto amounted to nothing much. As a financial planner, I was rather concerned about his ability to finance his retirement, let alone thinking about going into business to help others. However, he too believed that helping a person to fish and hence be able to survive a bit longer is better than giving a fish to survive for a day only. He said he wanted to make a difference in the lives of others and ultimately in his own life too.

So, what about us? Are we making a difference in our daily lives today by reviewing what we have not done that we should have done that could have really made a difference in our relationships with loved ones, friends, business associates, customers, suppliers and a host of others that we meet everyday? Words spoken or written in anger, actions we regret, money and time wasted, and many other things done that add up to nothing and leaving a legacy that we have nothing to be proud of.

I would like to recommend two easy to read books on the subject discussed. "Halftime" by Bob Buford is an excellent book for those "seniors' amongst us and for all, a light reading book is "Small Change" by Susan & Larry Terkel.Links to purchase these two books are as follow: Halftime ( http://bit.ly/kEdAFU ) and Small Change ( http://amzn.to/kJ1qwQ )

Thus, this short posting hopefully will be the start of many to come as my way of starting to make a difference in touching lives by sharing a thought or two, some interesting educational and news items, useful business and financial information and tips, and yes, even links to items of interest to buy or sell so that we can stretch the diminishing value of the dollar in our pockets.

I am not a computer nerd or bloggsphere guru and so do excuse me if my blog design is rather dull and lack content (DIY from template!). So, please bear with me whilst I ramp up to make this blog second to none - as they say, Rome was not built in a day, right? All ideas and questions welcomed. Have a good day.