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The Personalization of Politics

I've always steered clear of politics, thinking it's a very individual thing- not unlike religion or personal preference of anything. In the recent past of 2015, it's been kind of hard to ignore it though; it seems that it was the year of politics inundation. Still 9 months or so from the election, we are bombarded with the candidates opinions, policies and rhetoric. There is one phrase that rang true to me though: the phrase "Anchor Babies." As I thought about it: the concept of one member of a family causing or allowing the rest of the family to remain living in a location or country by virtue of the constitution, I thought from a financial planning standpoint that we should coin another phrase: "Anchor Parents." those that may be relegated to stay in one location because of family members in the same location. Not as a place in the constitution, but from a place in the heart. As a Pop (as I am known by my grandson D.J.), I very well know the need to get my “kid fix” on a periodic basis. A close friend of mine was blessed to have become a Pop last month at the age of 74- and promptly cancelled his regular 3 month vacation in Florida that he and his wonderful wife had been doing for more years that I can remember. I don't ever remember seeing the smiles on their faces quite like I saw when I met them shortly after their bundle was born, and Elizabeth and I are thrilled to have them in the club, and are very happy for them. Then there are our aging parents: having to stay in the location you are in to care for your parents, in contradiction to your decade's old plan of retiring in a location of warmth, golf 12 months a year, no coats and no cold. So, to me and for all the people I see regularly, "Anchor Babies" has a very different meaning. Do you feel anchored?

Many years and hundreds of articles ago, I wrote a piece about a friend who I helped work on his budget. We found that to continue to live here in Rockland between his pension, Social Security and investment income he could continue to live in the house he was living in with flat cash flow, meaning that all monthly income pretty well matched his expenses, leaving little for discretionary expenses- or as I call it... fun money. He had a daughter living in Georgia at the time as well as an adult child locally. After going through his current expenses, we ran a hypothetical budget as though he was living in Georgia as well. The result? By selling his house (with a mortgage) and using the equity to buy a house in cash in Georgia, we went from flat cash flow to approximately $1500 a month in positive cash flow. The ramifications of his relocation? Well, now that he had extra discretionary cash, he had plenty to buy a plane ticket to come back to Rockland to get his "kid fix" and return back to Georgia to continue his "kid fix" at will. The main result: a good night's sleep wherever he was, knowing that by relocating his expenses changed radically, his standard of living improved, and he told me for the first time in a long time, he felt free. Having positive cash flow does that to people- sleeping better, buying the things you want but don't necessarily need, and not worrying about buying food, drug co-pays, and all the other things that life lays on us. Now, compliance mandates me to say things like "Past performance is no indication of future performance," or "This may not be indicative of your results" and things like that. So, let's just take this as a story that Hans Christian Anderson may have written hundreds of years ago, but I just discovered. "Your experience may vary..."

Grandchildren and aging parents put us in a precarious situation financially and emotionally: we want or need to be here, when we really want to be there. The biggest ramification is that our income will probably change when we retire, but our expenses will stay the same, or continue to go up. If you were astute to work with a Certified Financial Planner® professional, decades ago, chances are that caring for your Mom was not figured into the plan. Most people assume that at retirement, expenses will go down. The fact is, with traveling, taking up hobbies and doing the things you always wanted to do, you expenses will probably stay the same or actually to up... did you figure on that? I've always said we were out of our minds to live in this ridiculously expensive area: did you plan on paying the taxes that you now pay? If I had to narrow down the one comment I hear most regularly, it's "I never figured it would cost so much to live here at this time." Its true- the cost of living here is off the charts. But, go South or go West, and the cost of living can be as much as 25% less for the same basic standard of living, with golf 12 months a year, no coats and no cold. So here we go back to the original thought... are you an "Anchor Parent?" I'm not at all suggesting you leave your little darlings, or abandon your aging parents- I'm just suggesting that there are alternatives that serve all purposes, and allow you to live in the manner you always dreamed... all it takes is a little imagination, planning, and a realistic appraisal of your situation. Now... we need a fourth for our foursome on Sunday- are you available?

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