TOUGH TIMES FOR BOOMERS

For most Boomers in their Second Half these are the times that tries men’s souls. With retirement portfolios heading south the economy in the tank and the job market even for so called "survival" jobs shrinking Thomas Paine’s dictum rings painfully true for many Boomers who now have to put their hopes and dreams for the Second Half on hold as they figure out what to do next. As for myself, my portfolio has taken a beating and the retirement plan I developed now looks naively optimistic. My initial response was anger, fear and loathing. But after months of lousy news I have adjusted to the new reality and am now trying to get things on track. Here is what I am doing.

An important lessons of Victor Frankl’s account of life in a death camp, Man’s Search for Meaning is one of the last great freedoms is our ability to chose what we think. That insight enabled him to survive Auschwitz and will enable us to survive our present trials, which pale by comparison. It is very easy for us to create doomsday scenarios if we believe everything we hear from some of the shrill, hysterical so called reporters on cable TV. As a result I quit watching cable news. Instead, I try to replace negative, self defeating thoughts when they occur with positive ones and remind myself that I can control what I think. As the saying goes, its not what happens that matters, its what you do with what happens that matters.

Once that hurdle was made, I decided to focus on what else I could control. An obvious area were my costs. I learned in business when revenue goes down, costs follow. Bearing this in mind, I went through my annual expenses and classified them as fixed and variable. For example, I classified my mortgage, my kid's college tuition, and property tax as fixed expenses and the lawn service, vacations, telephone as variable costs. Once I completed classifying my expenses I looked for ways to either reduce or eliminate variable expenses. Thus the lawn service and vacations were eliminated and a phone line cancelled thereby reducing phone expenses.

The third thing I did was search for opportunities to apply the skills I developed as a college instructor, corporate executive and management consultant to generate additional income to supplement my retirement portfolio. I concluded I didn't need to find a “survival” job at this time. Instead, I decided to develop a seminar business to equip retired Boomers to deal more effectively with important areas of their lives including their finances, marriages, health, mental development and relationships with other people. I concluded seminars would be more affordable for people who wanted help rather than one on one coaching sessions which tend to be more expensive.

The last thing I did was abandon my belief in models predicting the future, especially financial planning models. Nassim Nicholas Taleb in his book the Black Swan positing that we are not very good at predicting major events because we are more focused on what we know and fail to take into account what we don’t know. Consequently, those who were responsible for protecting us failed to predict 9/11 just as those who were responsible for managing the economy failed to predict the recent implosion on Wall Street. All the propeller heads and quant mathematicians in the world with all their fancy models can’t put Humpty Dumpy back again. So, no more financial plans for me!

Where does his leave me, or you if you agree with me? I am simplifying my life by living within my means. I am practicing what I preach about the role of money in my life-- it’s not my life. Even though,I am still hoping that what goes down eventually goes up. And I am paying more attention to my intangible assets especially my values and beliefs and trusting that David Halberstam was right when he wrote in Breaks of the Game::

Fame is a vapor
Popularity an accident
And money has wings
The only thing that endures in life is character”