AARP.
AARP. SHE
AARP. SHE HAS THOUGHTS ON HOW PERSON CAN GET THROUGH A FINANCIAL
LIKE THIS ONE.4@
NOBODY KNOWS WHERE THE MARKET
IS GOING TO BE IN AN HOUR,
WEEK, MONTH, OR YEAR CO4@ME UP
WHAT GENERAL ADVICE DO YOU HAVE
FOR PEOPLE WHEN 4@THE MARKETS A
CHAOTIC? 4@
>> I'M SURE I'M NOT THE FIRST
PERSON 4@THAT YOUR LISTENERS AR
HEARING THIS FROM THIS WEEK,
BUT DON'T PANIC.
AND THAT'S REALLY HARD IN THE
FACE OF CHAOS, TO NOT LOOK AT
YOUR PORTFOLIO AND4@ TRY TO
MICROMANAGE IT AND 4@JUMP IN 4@
JUMP OUT AT THE RIGHT TIME, BUT
THAT'S THE EXACT WRONG THING TO
DO.
IF YOU HAVE A LONG-TERM TIME
HORIZON, YOU ARE BETTER OFF
JUST CONTINUING TO BUY AT ALL 4@
LEVELS, INCLUDING DURING THESE
PULLBACKS WHEN YOU ARE
ESSENTIALLY BUYING SHARES ON
SALE.
AND THEN4@ 4@JUST LETTING YOUR
PORTFOLIO GROW.
NOW, THAT'S A VERY HARD THING
TO DO BECAUSE HUMANS ARE
EMOTIONAL CREATURES.
>> THAT'S THE THING.
WE ALL KNOW THAT.
WE'VE ALL HEARD THAT, BUT WHEN
YOU GET ONE OF THOSE DAYS WHERE
MAYBE THE DOW IS DOWN4@4@ 2,000
POINTS, IT IS REALLY HARD TO
STAY CALM, SO WHAT DO YOU SAY
TO PEOPLE SO THEY FOLLOW THIS
ADVICE?
>> AS A FIRST 4@LOOK AT HISTORY
IF YOU CAN PICK LOOK WHAT
HAPPENED TO THE MONEY YOU LEFT
IN THE MARKET IN 2008, 2009. 4@
HAPPENED TO THE MONEY YOU LEFT IN THE MARKET IN 2008, 2009. 4@@ IT IS WORTH THREE TIMES WHAT IT
WAS WHEN THE MARKET BOTTOMED
OUT.
IF YOU CAN'T SLEEP, TAKE 5% OFF
THE TABLE.4@
IF YOU STILL CAN'T SLEEP, TAKE
ANOTHE4@R 5% OFF THE TABLE, BUT
DON'T SELL OUT COMPLETELY.
>> YOU'VE BEEN DOING THIS A
WHILE.4@
BUT IT SEEMS TO ME THAT IN A
LOT OF WAYS THE BASIC
PRINCIPLES HAVE NOT REALLY
CHANGED.
IS THE WISDOM THAT YOU ARE
GIVING OUT 15 YEARS GO PRETTY
MUCH THE SAME AS WHAT YOU ARE
DOING NOW? 4@
>> YES AND NO.4@4@
THE PRINCIPLES HAVEN'T REALLY
CHANGED.
WHAT HAS CHANGED IS THE AMOUNT
OF FINANCIAL RESPONSIBILITY
THAT WE ARE BEING ASKED TO TAKE
FOR OUR OWN LIVES.
AS4@ THE PENSION SYSTEM HAS
EVAPORATED,4@ AND 401(K)S AND
OTHER ACCOUNTS THAT WE 4@HAVE T
CONTRIBUTE TO FOR OURSELVES
HAVE TAKEN HOLD,4@ WE'VE GOT MO
OF THE RESPONSIBILITY ON OUR
SHOULDERS, AND THE SAME IS TRUE
IN HEALTHCARE, AND WE ARE NOT
TAUGHT HOW TO DO IT, RIGHT?
THAT IS THE FRUSTRATING PART.
IT REALLY HAS 4@COME DOWN TO
INDIVIDUALS, CORPORATIONS,
SMALL SCHOOL DISTRICTS, THE
OCCASIONAL STATE PICKING UP THE
BALL AND TRY TO RUN WITH IT.4@
THAT THE PEOPLE I'M SURE LISTEN
TO YOU, AND THEY READ YOUR
WORK, AND I SAID WELL, SHE'S
GOT ALL TH4@E ANSWERS, AND SHE @
KNOWS ALL THE RIGHT THINGS TO
DO, BUT THEY 4@MIGHT BE SURPRIS
GOT ALL TH4@E ANSWERS, AND SHE @ KNOWS ALL THE RIGHT THINGS TO DO, BUT THEY 4@MIGHT BE SURPRIS@
THAT YOU MADE A FEW ERRORS
YOURSELF THAT YOU ARE GUILTY OF
SOME FINANCIAL SINS OF YOUR
OWN, ESPECIALLY WHEN YOU WERE
YOUNGER.
>> I MADE ALL OF THEM.
LITERALLY, I MADE ALL THE
MISTAKES, AND THAT IS ONE OF
THE REASONS I THINK THAT I FEEL
LITERALLY, I MADE ALL THE MISTAKES, AND THAT IS ONE OF THE REASONS I THINK THAT I FEEL@
SO OPTIMISTIC WHEN I TELL
PEOPLE THAT THEY CAN TURN THEIR
FINANCIAL SITUATIONS AROUND
BECAUSE I DID IT TWICE IN 4@MY
LIFE.
I DID IT ONCE WHEN I CAME OUT
OF COLLEGE AND GOT IN OVER MY
HEAD IN CREDIT CARD DEBT4@ AND
COMPLETELY MESSED UP MY FIRST
ATTEMPT AT 4@A 401(K), BUT I DI
IT AGAIN AT AGE 40 WHEN I GOT
DIVORCED AND WAS BASICALLY
STARTING FROM PRETTY CLOSE4@ TO
IN HAVING TO 4@SAVE HALF OF
COLLEGE TUITION FOR MY KIDS AND
BUY 4@A HOUSE ON MY OWN, REBUIL
MY SAVINGS4@, AND I'M AN ENGLIS
MAJOR.
LOOK, I DO NOT COME TO THIS
FR4@OM, YOU KNOW, SOME LOFTY4@
ECONOMICS DEGREE.
I GOT A C IN 4@INTRODUCTORY
ECONOMICS, TO MY 4@PARENTS' 4@
HORROR, AND4@ SO WHAT I
UNDERSTAND IS THAT IT IS NOT
THAT TOUGH.
IT IS 4@REALLY SOME BASIC HABIT
UNDERSTAND IS THAT IT IS NOT THAT TOUGH. IT IS 4@REALLY SOME BASIC HABIT@
REPEATED OFTEN4@, AND USE
TECHNOLOGY TO HELP YOU.
>> DO YOU THINK4@ 4@WE'RE GETTI
THE HANG OF IT, DO YOU THINK WE
ARE DOING A BETTER JOB HANDLING
OUR PERSONAL FINANCES THAN WE 4@
WERE 10 YEARS AGO?
>> WITHOUT A DOUBT. WITHOUT A
DOUBT, WE ARE DOING A BETTER
JOB.
WE CERTAINLY HAVE 4@BEEN HELPED
BY THE MARKETS, 4@DESPITE THE
RECENT PULLBACK.
WE SEE 401(K) BALANCES.
>> ALL BRILLIANT IN A BULL
MARKET, BUT I AM VERY, VERY
HEARTENED4@ 4@BY WHAT I SEE AS
STRONG SAVINGS 4@HABITS AMONG4@
MILLENNIALS AND JEN Z. GRANTED,
MILLENNIALS HAVE NOT HAD IT
EASY.
THEY CAME INTO THEIR FIRST JOBS
DURING THE GREAT RECESSION.
THEY ARE CRUSHED UNDER THE
WEIGHT4@4@ OF STUDENT DEBT, BUT
THEY ARE REALLY TAKING IT
SERIOUSLY.
THEY ARE SA4@VING MORE ON A
PERCENTAGE BASIS THAN WE