Financial Security: How to Protect a Nest Egg

Financial Security: How to Protect a Nest Egg

I was sitting in the front passenger seat of the shuttle van, riding between the airport and my hotel.  The driver was a woman in her late 50s or early 60s.  She works two jobs:  as hotel shuttle driver and as a driver for the Florida Department of Transportation.

She asked what I did and I told her I work with women and their money.  “Boy, do I need you!” she said.

She explained how lucky she was because the new Governor of Florida was not going to be able to wipe out her State retirement package.  Since she was within the 24-month protected window, she could take an early lump-sum payout if she took it right away.

Then she asked, “When I get that payout, what should I do with it?”

That’s the Question of the Year.

All the old standbys are out the window.

Certain bonds used to be a safe bet.  But not anymore.  Gold and silver are appealing, but may already be priced high.  Nonetheless, many people feel secure having some physical gold or silver stashed away somewhere.  And others are going for non-physical metals:  gold- or silver-backed Exchange-Traded Funds, or ETFs.  But even these have some people nervous … because of stories that have circulated about exactly how much (or how little) gold or silver is truly backing them.  Then you have commodity ETFs.  And foreign currencies.  But you have to know what’s going on … worldwide.

Good Old Cash is at risk of losing value to inflation, whether it’s physical cash in hand … or in a bank … or in a low-interest CD.  There’s the possibility of waking up in a year or two and finding that the cash you have is no longer buying much of anything, because prices have skyrocketed.

And the stock markets?  Stock indexes keep ratcheting up, with occasional slips.  Analysts use words like schizophrenic to describe markets: some knowledgeable people remain enthusiastic while others predict total disaster.  So which is it going to be?  I’ve found no real consensus between any two economists or financial gurus.

So what was I supposed to say to the van driver?  I am not a certified planner, so I cannot (and do not) give specific investment advice.  But even if I wanted to …

All I could do was explain how volatile all markets are—worldwide—and how difficult it is to make relatively safe investments today.  Especially for people so close to retirement that they no longer have decades to make up for poor choices.  (Ask Bernie Madoff’s victims…)

The best I could say was “diversify, diversify, diversify.”  I explained that doing nothing was no longer an option (i.e., cash in the mattress) because of the risk of inflation.  I said that if she divided her investments into three or four different types of assets and made her investments in dribs and drabs over a period of time (and not all in one day, since she wouldn’t know which day to pick), she had a far better chance of weathering the current economic storm.  One category would likely be going up as another went down.  And at least she wouldn’t be in a single category that might tank and leave her with nothing.

Then I thought to myself, “What stocks would she buy and through whom?  What happened to the simple solutions people used to have, such as some of the mutual funds that grew slowly but surely over time?  Or CDs that kept up with inflation, because our money supply was being managed and wasn’t on steroids?”

I felt totally impotent.  Like I was telling someone to throw her money at the wall to see what stuck.  Unable in one conversation to help someone who has a real need.  And she’s one of millions with similar questions.

You see, I coach women who haven’t prepared financially for the long term.  Preparedness has nothing to do with their level of success, their intelligence, or the size of their paycheck.  It has to do with what they were taught about money, the messages they picked up from childhood forward, and how those messages have translated into money behaviors.

What they all have in common is the fact that—regardless of how much money flows through their lives—they are not on track to be able to kick back comfortably one day.  They’re somewhere between being in serious debt and having only meager savings.   Not enough to finance the vision they have for their later years.

I’ve gathered so much solid knowledge and so many good tools that help women go from being controlled by their money to controlling their money … and, in turn, their financial futures.  Once there, they are ready to work with a qualified, fee-based financial planner … and ready to actually implement a well-designed, age-appropriate, diversified plan.

But when it comes to wanting to help a woman I’ll see once, in the front of a hotel shuttle van, even with all my financial education I’m at a loss.

The simple, safe long-term investments are gone.  Today, with the Fed printing money, the Government adding deliriously to the national debt, high unemployment, bankrupt cities and states, and uncertainty everywhere, the rules of economics we used to count on no longer apply.

We’re truly in uncharted waters.

Where do you have your nest egg invested?  Is it “safe” according to the old rules?  Or have you done what you can to keep it relatively safe in today’s free-for-all?

xxxxxxx

Sharon O’Day is an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret ‘weapon,’ if you will, behind many individuals in high places. At age 53, she lost everything: her home, her business, everything. Since then, Sharon has interviewed women and done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.

The surprising answers will be shared in her upcoming book “Money After Menopause.” Today her focus is to show women how to reach financial security for the long term. She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve.

  • This article represents the mindset of so many women. Achieving financial security in today’s world is on everyone’s mind…glad we have someone like you to help us knock down the things that get in our way! When can we get a copy of your book?

  • Holli

    Sharon,
    I would love to chat with you on the phone. We have similar stories and similar niches. When would be some good times for you? I am in Arizona right now but live in Florida so depending on the day I’ll let you know the time zone :0).
    Also, have you checked out the Elevation Group – it’s amazing.? I’m working with them and going to a special seminar this weekend and Monday:
    http://www.itsanewworld.info.

    I’ve also started a special fb group.
    Looking forward to connecting,
    Holli

    • Anonymous

      I’d be happy to chat with you, Holli. What if you go to my Facebook page, ‘friend’ me and we can coordinate in a private message there? I’m at http://www.facebook.com/SharonODayFB

  • When i was growing up no one taught me about money. I was married to a man for 6.5 (long ass years) that dominated the check book and I did not even write a check until I was 20! When I stepped into a job with a 401k – I knew it was something good but did know how much to apply or what to really do with it. Now that I have 2 decades with a retirement package and a 4o1k – what next if I move to another job with benefits. Roll it over to another placement – however – I am not the 20 yr old any more and thankful I have learned so much since those days. I love reading your content on money – I read every word!

    • Thanks, Angela. The reason I take such joy in writing is that I know I have readers like you who find value in what I write! Just as you do with yours. And when our messages dovetail … look out, world! 😉

  • Thanks Sharon for another informative article. Your statement ‘from being controlled by their money to controlling their money … and, in turn, their financial futures.’ is very powerful and the change of mindset required for this to happen is so very important.

  • Nancy

    Another great post, Sharon. I feel so lucky because I have an investment advisor I really trust, someone who has “outperformed” the market consistently. But just the other night, I was with a woman who swore the market would tank, eventually, worse than ever, that our money is safe nowhere! She was so full of gloom and doom that it scared me. She was going to put all her money in real estate. Hmmm.
    I think now your “diversify” advice is right on.

  • I was just reading today that 40% of Americans have not prepared for retirement, while at the same time we are living substantially longer lives. Many babies born today can expect to live to 100. As I was reading your article I really appreciated your honesty. What came to my mind is that our best investment is in ourselves, into our skills…. even into diversifying what we are able to do so that we can adapt to a changing world. I guess that is where I’ve been putting most of my money these days. I added it up and in the past 15 months I’ve spent $15K on investing into my skill development! Wow, it really adds up quickly!!!! Now to make it pay 🙂 This is a great article, Sharon, and answers my own question as well as many others as to where to put our money!

  • Sharon…. there are literally hundreds of thousands of us women who need some good solid advice on growing and keeping their money… things we were never taught before. Looking forward to reading more of your great insights!!

  • I see you as the Dave Ramsey for ladies–a compliment. Solid information. Thanks for sharing.

  • wow Sharon, what a wake-up call that is. For the woman in the shuttle, for you and for me…I know one thing, I need your information and I have so many girls friends who need this. Many friends around me put their money in silver. Any way, thank you for writing about it and informing us.

  • Great article, Sharon. There truly are some better alternative to allow this woman’s money to grow and keep it safe as well. You are right, what people have been advised to do all their lives to “save” for retirement hasn’t worked and will not work. That is why  only 5 out of 100 Americans at age 65 consider themselves wealthy or even secure. The rest are broke or still working. I know exactly what I would have told that woman!
    We all need to know the truth about money that the financial institutions and IRS won’t tell us. I love empowering women through education and I applaud your commitment to do the same.

    • Bonnie, I love seeing the look of excitement as women recognize the power that control over their money brings them.  I would imagine you feel the same way … or you wouldn’t be focusing on what you’ve chosen to focus on, per your site.  Bravo!  (We’ll be busy for awhile yet …) 😉

    • Bonnie, I love seeing the look of excitement as women recognize the power that control over their money brings them.  I would imagine you feel the same way … or you wouldn’t be focusing on what you’ve chosen to focus on, per your site.  Bravo!  (We’ll be busy for awhile yet …) 😉