{"id":50776,"date":"2014-05-12T07:44:05","date_gmt":"2014-05-12T11:44:05","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=50776"},"modified":"2014-05-12T07:44:05","modified_gmt":"2014-05-12T11:44:05","slug":"collateral-damage-what-you-and-monica-lewinsky-have-in-common","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/05\/12\/collateral-damage-what-you-and-monica-lewinsky-have-in-common\/","title":{"rendered":"Collateral Damage: What You and Monica Lewinsky Have in Common"},"content":{"rendered":"<h4><span style=\"font-size: small;\">By Dennis Miller<\/span><\/h4>\n<p>Collateral damage can assume many forms\u2014and though some may be more newsworthy than others, the latter are no less real, nor any less frightening.<iframe loading=\"lazy\" src=\"http:\/\/trk.caseyresearch.com\/f\/?content_id=852&amp;code=PIP&amp;editorial=collateral-damage-what-you-and-monica-lewinsky-have-in-common-1\" width=\"1\" height=\"1\" frameborder=\"0\"><\/iframe><\/p>\n<p>On Tuesday, controversial radio talk show host Rush Limbaugh called Monica Lewinsky \u201ccollateral damage in Hillary Clinton\u2019s war on women,\u201d saying that President Bill Clinton and his wife destroyed the former White House intern \u201cafter he got his jollies, after he got his consensual whatevers.\u201d<\/p>\n<p>Last month, Jeremy Grantham, cofounder of GMO, a Boston-based asset management firm that oversees $112 billion in client funds, dubbed savers \u201ccollateral damage\u201d of quantitative easing and the Federal Reserve\u2019s continued commitment to low interest rates.<\/p>\n<p>Would it be worse to be known as the \u201cpresident\u2019s mistress\u201d for more than a decade and, as Lewinsky claims, to be unable to find a normal job? Maybe. But it\u2019s no laughing matter either to find yourself penniless in your \u201cgolden years.\u201d<\/p>\n<h3><strong>Signs of Monetary Collateral Damage Among Seniors<\/strong><\/h3>\n<p>The 55-plus crowd accounts for 22% of all bankruptcy filings in the US\u2014up 12% from just 13 years ago\u2014and seniors age 65 and up are the fastest-growing population segment seeking bankruptcy protection. Given the wounds bankruptcy inflicts on your credit, reputation, and pride, it\u2019s safe to assume those filing have exhausted all feasible alternatives.<\/p>\n<p>But even seniors in less dire straits are finding it difficult to navigate low-interest rate waters. Thirty-seven percent of 65- to 74-year-olds still had a mortgage or home equity line of credit in 2010, up from 21% in 1989. For those 75 and older, that number jumped from 2% to 21% during the same timeframe\u2014another mark of a debt-filled retirement becoming the norm. With an average balance of $9,300 as of 2012, the 65-plus cohort is also carrying more credit card debt than any other age group.<\/p>\n<p>While climbing out of a $9,300 hole isn\u2019t impossible, the national average credit card APR of 15% sure makes it difficult. For those with bad credit, that rate jumps to 22.73%\u2014not quite the same as debtor\u2019s prison, but close.<\/p>\n<p>None of this points to an aging population adjusting its money habits to thrive under the Fed\u2019s low-interest-rate regime.<\/p>\n<h3><strong>Minimize Your Part of Comparative Negligence<\/strong><\/h3>\n<p>A quick side note on tort law. Most states have some breed of the comparative-negligence rule on the books. This means a jury can reduce the monetary award it awards a tort plaintiff by the percentage of the plaintiff\u2019s fault. Bob\u2019s Pontiac hits Mildred\u2019s Honda, causing Mildred to break her leg. Mildred sues Bob and the jury awards her $100,000, but also finds she was 7% at fault for the accident. Mildred walks with $93,000. (Actually, Mildred walks with $62,000 and her lawyer with $31,000, but I digress.)<\/p>\n<p>Comparative-negligence rules exist because when a bad thing happens, the injured party may be partly responsible. For someone planning for retirement, the bad thing at issue is too much debt and too little savings. Through low interest rates, the Federal Reserve is responsible for X% of the problem.<\/p>\n<p>Though ex-Fed chief Bernanke doesn\u2019t seem to see it that way\u2014in a dinner conversation with hedge fund manager David Einhorn, he asserted that raising interest rates to benefit savers wouldn\u2019t be the right move for the economy because it would require borrowers to pay more for capital. Well, there you have it. And there\u2019s nothing you can do about that X%. You can, however, reduce or eliminate your contribution.<\/p>\n<p>In other words, you don\u2019t have to be collateral damage; you can affect how your life plays out.<\/p>\n<h3><strong>Money Lessons from Zen Buddhism<\/strong><\/h3>\n<p>This might sound like a \u201cduh\u201d statement, but it bears repeating from time to time. Inheritance windfall from that great-aunt in Des Moines you\u2019d forgotten about aside, there are two ways to eliminate debt and retire well: spend less or make more.<\/p>\n<p>Rising healthcare costs, emergency car repairs, and the like are real impediments to reducing your bills. Costs rooted in attempts to \u201ckeep up with the Joneses,\u201d however, are avoidable. Those attempts are also futile. A new, even richer Mr. Jones is always around the bend.<\/p>\n<p>Instead of overspending for show, make like a Buddhist and let go of your attachment to things and your ego about owning them. Spring for that Zen rock garden if you must and start raking.<\/p>\n<p>One of the wealthier men I know drove around for years with a gardening glove as a makeshift cover for his Peugeot\u2019s worn-out stick-shift knob. It looked shabby, but this man wasn\u2019t a car guy and had no need to impress. As far as I know, the gardening glove worked just fine until he finally donated the car to charity and happily took his tax deduction. Maintaining your car isn\u2019t overspending, but you catch my drift. Dropping efforts to show off can benefit us all.<\/p>\n<p>That said, keeping up isn\u2019t always about show. You may feel pressure to overspend just to be able to enjoy time with your friends and family. Maybe you can no longer afford the annual Vail ski week with your in-laws or the flight to Hawaii for your nephew\u2019s bar mitzvah. Maybe your friends are hosting caviar dinners, but you\u2019re now on a McDonald\u2019s budget and can no longer participate.<\/p>\n<p>Spending less in order to stay within your budget can mean missing out on experiences, not just stuff. If you\u2019re in this camp, there\u2019s no reason to hang your head. As I mentioned above, you can spend less or you can make more. The latter is far more fun.<\/p>\n<h3><strong>An Investment Strategy to Prevent You from Becoming Collateral Damage<\/strong><\/h3>\n<p>While it\u2019s tempting to start speculating with your retirement money, resist. If you have non-retirement dollars to play with and the constitution to handle it, carefully curated speculative investments can give you a welcome boost. However, if all of your savings is allocated for retirement, just don\u2019t do it.<\/p>\n<p>Unless you\u2019re still working, how, then, can you make more money in a low-interest-rate world? At present, my team of analysts and I recommend investing your retirement dollars via the 50-20-30 approach:<\/p>\n<ul>\n<li><strong>50%:<\/strong> Sector-diversified equities providing growth and income and a high margin of safety.<\/li>\n<li><strong>20%:<\/strong> Investments made for higher yield coupled with appropriate stop losses.<\/li>\n<li><strong>30%:<\/strong> Conservative, stable income vehicles.<\/li>\n<\/ul>\n<p>No single investment should make up more than 5% of your retirement portfolio.<\/p>\n<p>Whether you\u2019re designing your retirement blueprint from scratch or want to apply our <strong>50-20-30 strategy<\/strong> to your existing plan, the <a href=\"http:\/\/www.millersmoney.com\/go\/v2ng8-2\/PIP\" target=\"_blank\"><em>Miller\u2019s Money <\/em><\/a>team can help. Each Thursday enjoy exclusive updates on unique investing and retirement topics by signing up for my free weekly newsletter. Don\u2019t let the Fed\u2019s anti-senior and anti-saver policies unravel your retirement. <a href=\"http:\/\/www.millersmoney.com\/go\/v2n39-2\/PIP\" target=\"_blank\">Click here to start receiving <em>Miller\u2019s Money Weekly <\/em>today.<\/a><\/p>\n<p>&nbsp;<\/p>\n<div id=\"xvMdV95u77zU\" style=\"clear: both;\">The article <a href=\"http:\/\/www.millersmoney.com\/go\/v2n7a-2\/PIP\" rel=\"permalink\">Collateral Damage: What You and Monica Lewinsky Have in Common<\/a> was originally published at <a href=\"http:\/\/www.millersmoney.com\/go\/v2nsb-2\/PIP\">millersmoney.com<\/a>.<\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Dennis Miller Collateral damage can assume many forms\u2014and though some may be more newsworthy than others, the latter are no less real, nor any less frightening. On Tuesday, controversial radio talk show host Rush Limbaugh called Monica Lewinsky \u201ccollateral damage in Hillary Clinton\u2019s war on women,\u201d saying that President Bill Clinton and his wife &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/forex-news\/2014\/05\/12\/collateral-damage-what-you-and-monica-lewinsky-have-in-common\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Collateral Damage: What You and Monica Lewinsky Have in Common&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-50776","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/50776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=50776"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/50776\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=50776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=50776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=50776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}