personal finance

How do you count your money?

In today's tech age people are using online banking, balance by text or mobile apps to check their balances or make payments. Does anyone still use an actual calculator? I mostly use my iphone but when doing some serious math use my HP-10bii or spreadsheets.

A client and friend told me he has a simple system for counting his money.  The guy is worth probably $80M and I expected a series of controls and systems to keep checks and balances.  However, this is what he told me about knowing if he is running his business efficiently as well as "the secret to building wealth".

I have a simple thing I do each month.  I check the bank statements.  If the ending balance is higher than it was last month, then perfect.  If the ending balance is lower than it was last month I know I have some hell to raise.  In terms of building wealth, the best thing I think a person can do is watch their lifestyle and not let it grow with the amount of money they are making.  I always kept my lifestyle pretty much the same.  Sure, I splurged and have toys and cars and houses.  But over the years, even when I had a big year, I kept our lifestyle the same and never got over extended.  I also only pay cash and do not borrow.  Banks are your friend when you don't need money and run the other way when you do need it.

I think that is some of the best advice I have ever received about money.  What about you?  Any good money tips to share?

When talking to another client the other day about writing up an LOI on a net leased property, I asked what he wanted to offer.  He said "hang on a second" and all a sudden I heard an adding machine in the background.  Seriously.  You know the electric kind with the paper tape.  He was doing a quick cap rate calculation to figure his offer price.  After we got the serious details out of the way, I almost asked "Do you save or file the paper tapes?" But I didn't.  It is his system and it works for him.

Here are a few photos of an antique Victor adding machine I bought at a rummage sale for $27.  And, no, I don't save the tapes each day.

I was interested to see if I got a deal at $27.  This is what I found:

Company History Victor Adding Machine Co. was a fledgling company in 1918 when the operator of a successful chain of meat markets gave a Victor salesman $100 for what he thought would buy an adding machine. Instead, he got 10 shares of the company’s stock. In an effort to protect his investment, that man – Carl Buehler – became a director of Victor in September 1918 and was elected president of the company three months later. The first Victor adding machine, Model 110, was introduced in 1919.

Usage his machine was widely used in offices for doing fast additions and calculations. The results were printed. Input from a ten digits keyboard in a 9x10 matrix. Extra function-keys to the right.

Cost The first Victor adding machine, the Model 110 , was introduced in 1919 and proved to be an extremely successful device. The Victor 110 was a full-keyboard non-printing machine with a front-mounted register, with only repeat and zeroing keys. The company sold 100000 of its Model 110 by 1926. The early nonprinting model cost $85, the model without carriage cost $100, the model with carriage $125. In 1921 the machine was extended at the rear to include a printing mechanism and was released as the 200 series. At a retail price of $100, 2000 units sell in the first year.

Current Value

  •     Antique Victor Adding Machine Brown Bakelite with Green keys circa 1940 It WORKS (Price: $75)
  •     A 1920s Victor Adding Machine. Fair condition. (Price: $100)

Source: ebay

So yes, it looks like I did OK.  If I sold it, which I'm not, I would stand to make a few bucks.

Do you think the Victor can calculate the IRR?

Will you outlive your money?


What do you fear most? Death or outliving your money? As one of their daily snapshots this week, USA Today published the results of a survey by Allianz Life Insurance Co asking 44-75 year olds "What do you fear more?  Death or outliving my money?

And the results are in….

61% - Outliving my money

39% - Death

fear of outliving money

Death may be frightening, but to a majority of older Americans, the possibility of outliving their savings is even worse.

Maybe it's me, but that seems crazy:  Fear running out of money more than death? To believe that you need what you don’t have is a definition of insanity.

My grandpa used to always say "it's just money, you can always make more" ….but he developed pancreatic cancer as a result of stress from a large business transaction gone south. So, maybe the survey is right. But fear is subjective and we are all entitled to our opinions.

I would rather plan.  As the saying goes, if there is a monster chasing you in your dream, stop, turn around and ask it "what do you want?".  Facing fears is the best way to eliminate them. In this case retirement fears.

Fear of running out of money is #1 in Sydney Lagier's  Three Retirement Fears to Conquer.  Regular savings combined with investments into secure low risk investments will help conquer this fear and alleviate worry.  It is better to plan and prepare rather than regret and repair.

Objective Retirement Planning: use a retirement calculator.  The purpose of every retirement calculator is to tell you one or both of these two pieces of information:Time Is Money

  1. how much you need to save (usually per month) to be able to retire or
  2. how big of a nest egg you must have in order to retire

So.... How much income do you need in retirement? Try this retirement income calculator

Also, try these other retirement calculators which include calculators to figure out Retirement Income, Retirement Planning, Fixed Annuities, Immediate Annuities, Long-Term Care and Social Security Benefits.

Here are Four Steps to a Healthy and Prosperous Retirement

  1. Develop sources of reliable, lifetime retirement income
  2. Manage your living expenses
  3. Protect against things going wrong
  4. Plan for a good life.

At the end of the day, happiness is cheaper in retirement especially when you have planned and have passive income from various investments. The majority of retirees surveyed by Ameriprise Financial say that after a few years of retirement, money worries fade into the background as long as you have planned.