The Grateful Dead is My Out-of-town Girlfriend

Back in the eighties, a friend and fellow Deadhead said to me, “Dude, we’re twins.” I replied, “Dude, what are you talking about?” He said, “We’re twins because we both have out-of-town girlfriends.” “I don’t even have an in-town girlfriend,” I said.

My friend explained to me that my out-of-town girlfriend was the Grateful Dead. And just like him, I would drive and travel untold miles to see my favorite band. He did the same thing to see his out-of-town girlfriend. They never fought, and the sex was always fresh and intense. “And I bet you never get sick and tired of the Dead,” he reminded me.

Trying to make sense of his logic, I said, “Bro, didn’t your girlfriend ever get on your case? Make you spend the day shopping with her, carrying her bags? Even make you take out her trash?” He said, “No, bro. Do you run errands for the Dead?” “I guess not,” I said. “But I think I get what you mean. The experience can be inconvenient but totally worth it.” “Exactly, bro,” he said.

Now fast forward thirty years later to the summer of 2015. The surviving members of The Grateful Dead are reuniting for their 50th anniversary with the Fare Thee Well Tour. I had tried desperately to get tickets to the Chicago shows over the Fourth of July weekend but was unable to. Luckily, I was able to secure tickets to the first set of shows that the band added on in Santa Clara, CA, just several miles from the birthplace of the Dead in Palo Alto, CA.

So here I am getting ready to schlep all the way across the country to see my favorite band, my “out-of-town girlfriend.” And what a long, strange trip it will be:

The weekend before the shows, I have to be in LA for a conference. It makes no sense to fly back and forth from Cleveland to the conference and then fly back the next weekend to San Francisco. Coincidentally, a friend of mine from the Bay will be vacationing in LA with his family the same weekend that I’m there for the conference. So, I’ll drive back with him, his wife, son and daughter and her boyfriend to San Francisco. Then, I’ll stay with them for five days before the Dead shows. The shows, by the way, will be in the Silicon Valley area which is 90 minutes south of their home. I’ll most likely need a hotel room for two nights, so I don’t have to travel back and forth in Bay area traffic. Oh, yeah. Did I mention that I have some of the crummiest seats in the house with a partially blocked view?

But like my friend and “bro” said over 30 years ago, the Dead is my out-of-town girlfriend. Inconvenient but totally worth it. As Bob Weir wrote, “I may be going to hell in a bucket, babe, but at least I’ll enjoy the ride.”

Is the Rock of Gibraltar Crumbling?

“Jeff,” my client, Paul, said, “you’ve always given me great advice, but you may have been wrong this time,” he said nervously. Believe me, no financial advisor wants to hear this from a client. After all, my job is to help my clients make the complex financial decisions simpler throughout their life. They trust that I’ve got their back and won’t give them bad advice.

“Wrong about what, Paul?” I asked trying to get some clarification. Paul continued, “Remember when I told you that I was going to retire at the end of the year? I asked you if I should get rid of my life insurance policy, and you told me not to.” “Sure, Paul,” I responded. “We agreed that you should keep your policy because your wife, Suzy, is collecting a teacher’s pension, and if you die before she does, she can’t collect both your Social Security benefits and her pension. Naturally, I thought your life insurance would provide her with security and peace of mind if you die before she does.”

“Well, Jeff, I called my life insurance agent just as you suggested, and he said that Suzy could collect both my social security benefits and her pension when I die. He said that I didn’t need the life insurance policy, and that I should transfer it into an annuity.” Exasperated he said, “Jeff, that’s the complete polar opposite of the advice that you gave me. Frankly, I’m confused and a little scared. You’ve never given me bad advice before, but could you have been wrong this time?” Paul asked. I could hear the anxiety in his voice.

Like many financial advisors, I’m in some ways a financial therapist. I assured Paul that I would find out what the best course of action was for him to take. So I checked with a business acquaintance of mine who happens to be one of the nation’s foremost experts on Social Security and is also a genius. This friend confirmed to me what I told Paul. After Paul dies, his wife would indeed stop receiving his Social Security benefits and collect only her pension.

I called Paul back to calm him down and to relay what my expert had told me. Paul then asked me why his insurance agent would give him such bad advice. I told him I really didn’t know, and it could have been a mistake. Then Paul asked me if the agent would make a commission from the annuity that he suggested Paul buy. I said, “Of course he would Paul.”

I could almost hear the wheels turning in Paul’s brain. He said, “That damn agent was so commission hungry that he gave me bad advice. I think I should buy a different life insurance policy.” I explained to Paul that may not be a good thing to do, and he should just let the policy be. Paul said, “Thanks, I’ll take your advice, but I think I’ll get a new life insurance agent.” I smiled and silently agreed.

Charge It!

Many financial planners, especially the more well-known ones, will tell you not to use a credit card. Instead, they’ll tell you to use a bank debit card; some of these celebrity planners even get paid a small transaction fee when you use the one with their name on it. Regardless, I have a different point of view. I think that most people should pay their normal living expenses with a credit card. You might be thinking, “Don’t credit cards charge outrageous interest rates and encourage people to go into debt?” Well, yes and no. Before I explain, however, keep in mind that my advice is for people who are not compulsive spenders.

I recommend that you use a credit card for the things that you normally buy and can afford. That is, everyday expenses such as food, gas, utilities etc. In other words, pay your fixed monthly expenses with a credit card and pay the card off each month. I suggest this for two basic reasons. First, credit cards have more security compared to debit cards. In case of fraud, a credit card holder is only liable for the first $50.00 while the debit card holder may be liable for the whole amount. The other major benefit is the rewards. Many credit card companies have reward programs ranging from free travel to giving cash back every quarter or so. Whichever reward is best is a personal choice. The point is: why not get something in return for the money that you’re spending each and every month?

The two main reasons people get into trouble with credit cards is that they succumb to compulsive spending and purchase things that they cannot afford, or they lose their jobs and have to live off credit to survive. The latter issue can be countered by setting up an emergency savings fund in a separate bank, savings or money market account with the goals of six to twelve months of fixed living expenses. If you want to buy something you can’t afford, set up another savings account for that particular item and pay cash for it.

My wife and I put almost all of our monthly expenses on our credit card. What’s more, we’re rewarded with free first-class airline tickets several times a year. No kidding! If you can practice self-restraint, you shouldn’t be using a debit card for anything other than ATM access. If you can’t use a credit card responsibly, well, maybe now you have some incentive to improve your habits. After all, wouldn’t you like to fly first-class like a celebrity financial planner?

Financial Porn Strikes Again

It was a beautiful spring Monday morning in Ohio. The sun was actually shining, the birds were singing and the tulips were starting to bloom. My day started as usual with coffee, a smoothie and my morning meditation. Afterwards, I hopped into the shower, shaved and primped for the day. As I got dressed, I turned on my favorite morning news show “Morning Joe.” (Don’t you love when Joe says something outrageous and Mika elbows him in the ribs)? It was the normal news cycle, and Mika said, “Now for the stock market report.”

A beautiful talking head came on, and she started talking about how bad the new job creation numbers were during March. The economy had created only x number of jobs, but the expectation was for y number of jobs. Of course, “y” was a much larger number than “x”. She went on saying, “And the markets aren’t happy as the futures are down, and it looks like a bad day for the markets.” Not wanting to be influenced by negative news, I switched to the Fox business channel, and an even prettier and better dressed business babe echoed the same sentiment. I was about to shut off the TV, and my wife yelled, “Don’t change that channel; I want to see what she’s wearing.”

Even though I know better, I went to work a little worried thinking doom and gloom. But once I got to work, I was too distracted with client meetings and other tasks. I was so busy, in fact, that I didn’t have time to watch the market and drive myself crazy. At the closing bell, I finally got to look at the market, and to my astonishment, it was up over 100 points!

As my mentor once told me, markets are nutty and unpredictable; so don’t try to outguess them. Trying to predict the daily gyrations of markets is akin to fortune telling and soothsaying. Dr. Eugene Fama is a Noble laureate for his research in stock markets. His first job after graduate school was writing research articles for a market timing newsletter. Well, Dr. Fama discovered that market timing did indeed work; that is, if one were able to look backwards. Subsequently, Dr. Fama was fired from his first job.

So absence of a crystal ball, stick to what you can control. Am I saving enough for my kid’s education and my retirement? Am I taking too much or too little risk? If I retire, will my money last me for the rest of my life? In other words, ignore financial pornography and the Chicken Littles of the media.