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President Chris Gaynor opened the in-person WVRC meeting at Guido’ restaurant right on time with a warm welcome to members attending.
He immediately called upon Jim Crane to lead the pledge to our Country’s proud flag of stars and stripes.
The ‘thought of the day’ was given by Tom Barron. In a serious tone, Tom said the subject of today’s ‘thought’ was honesty. He quoted Spencer Johnson, whom he thought said it best. “Integrity is telling myself the truth. Honesty is telling the truth to other people.” Tom asked a rhetorical question: where should we find honesty in our society? He believed it should come from our Country’s governmental leadership. However, when major legislation is passed by an evenly divided political parties, that is not honesty. When major legislation includes separate and distinct goals of climate change, IRS employment and social welfare, that is not honesty. When legislation is mislabeled and political commentary includes lies and distortions, that is not honesty. He was reluctant to bring up political divisions in our country, but was more troubled by the lies of many, not all, political leaders. He sat down to a round of applause.
After Ed Gauld leading the song of the day (Clementine), President Chris introduced a guest, Riku Yamanaka, a student from Japan who is here in LA to attend a 10 month language program.
Chris then presented his ‘joke of the day’ via a comedy routine video of a brilliant, by lying, woman stopped for speeding by a policeman. Very funny! Chris then called for announcements. Benjamin Fisher, who is the current VP, responsible for organizing various social special events, said a visit to the upcoming Petersen Museum, required a certain number of attendees. So, if you wish to go to see the fabulous collection of cars, please let him know asap.
Aaron Donahue, chair of the Community Avenue of Service, announced that the Veterans Administration is embarking on a 1200 housing complex and the need for various VA projects is in soon coming. Members seemed to nod in agreement, which prompted Aaron to request help on his committee. Stay tuned…
Now it was time for the real show, the speaker of the day. So President Chris changed roles by introducing fellow Rotary member, Steve Scherer, as his partner in the ‘retirement planning’ presentation.
The first issue discussed was, when should someone start preparing for retirement? Both Chris and Steve agreed it should be as early as possible, and consult with friends or family who are knowledgeable for advice. Steve Day suggested investing in 401K plans or IRA’s is advisable, and even starting in college was a good idea.
Steve then told a story of a Czar asking the smartest rabbi to teach a parrot to speak English in one year. The point of the story was uncertainty of the future. With that, start investing now as you just can’t know what the future holds for you.
This point lead to the question: how to prepare? First, if married, agree on common goals. Planning was essential. Chris gave an example of seeking advice from his father when entering his accounting practice. Planning for retirement means planning for your options and goals in life. Retirement age, education for children, vacations, housing, etc. are all necessary for adequate planning for the future. If you don’t plan well, it just means you have to work longer, said Chris.
Steve interjected the thought of living within your means, not beyond. Don’t compare your lifestyle with others, stay with your capabilities and affordability, and invest accordingly. Doing so, and believing in the concept of ‘compound interest’ (investing for the long-term yields compounding investment rewards).
Chris then brought up the 2008 financial crisis where the stock market collapse and real estate declines appeared disastrous for investors. Historic institutions suffered great losses in just days, especially those which were highly leveraged. Thus, Steve pointed out the need to invest in quality. Be patient, have the resources to overcome short-term declines, job loss, etc. Invest in quality, time well pass, look to the long-term. Chris reminded the members that the markets had recovered by 2010, in less the two years. From the audience came the observation that a friend moved to cash after the 2008 meltdown and never returned. Basically he missed the strong 12 year upside that followed.
The next major point was the subject of debt. Other than the purchase of a house with a long-term mortgage, a person should not incur debt that cannot be paid off within 30 days. The implication was not to use credit cards as a borrowing vehicle. It is foolish! However, Steve said debt can be a good thing in incurred properly. For instance, when interest rates are low, you might incur debt only if used to purchase high quality assets.
Questions arose immediately upon the conclusion of the formal presentation.
“What do you think of reverse mortgages”? Not a good idea, suggested Steve. The interest rates on the debt are over 8% and you may need to access the asset eventually.
“How is whole life insurance as a retirement asset”? Since he is in the business, Jim Crane said whole life insurance rate of returns are less than 4 to 5 percent, far below the long-term investment rates of return.
“How do you diversify asset purchases”? Steve offered the quote: “When you are sure, keep it pure. When in doubt, keep it out”?
John O’Keefe offered the advice from the former Wall Street Journal columnist Clemons:
1. Save 10% of your earnings each year
2. Live frugally
3. Invest aggressively in quality assets.
Amen to all sage advice given!
Written by Tom Barron