Thursday, 21 June 2012

Happiness in Punta Gorda (PG), Belize


I just returned from Punta Gorda, Belize where I met with business owners in preparation for bringing MBA students for a week in January. I didn't know what to expect, for this was my first trip to Central America. We are organizing this trip through ProWorld Belize and the Toledo Association of Businesses in PG. Many thanks for their hospitality, openness, and warm reception.

A little geography lesson; Belize is south of Cancun, Mexico and just above Guatemala. I had to find it on the map before I left. Punta Gorda is on the southern coast of Belize with a view of Guatemala across the bay. It takes 1 hour be prop-plane or 5 hours by bus from Belize City. My experience with Belize is the 3 full days I spent in Punta Gorda, Barranco, looking out the window as we drove and the interactions I had with the people I met.

PG doesn't have the white sand beaches and the towns are not featured in travel magazines. PG is very rich in Garifuna, East Indian, Creole, Mopan, Q'eqchi, and Mestizo culture. The business owners I met are very entrepreneurial and scrappy, making do with what they have and creative in overcoming things they don't have. I was impressed with how sharp and perceptive they are at understanding customer needs and wants. Of note, they are some of the most genuine and sincere individuals I have met.

Driving through the bush and into the villages, I met subsistence farmers, living in thatched roof houses and huts. It reminded me of how little we need to be happy. It also made me question if all development and advancement is good. You buy a car and now you have to make money for gas, insurance, and (if you borrowed the money) to repay your loan. For this, it keeps us in the "Rat Race", always chasing the dollar to pay for goods we don't need. It made me question what we really need and what I want out of life.

Now don't get me wrong, I really enjoy the comforts and conveniences I have. But I also realize that these things don't make me happy. To me, happiness is good conversation and being around the people I love. Happiness happens when I share a meal, engage in meaningful work, and give back to my community; however you define your community.

The conversations I had in Belize were very rich with thoughtful people. Sitting in 90+ degree heat with humidity and sweating like there was no tomorrow but having rich meaningful conversation was very rewarding. Learning about Belize, PG, and the different cultures was enlightening. Meeting with and thinking of how we can help the entrepreneurs of PG was both exhausting and invigorating.

I look forward to spending 6 days with a group of Mount Mercy University MBA students in PG and sharing in their experiences. I feel we can do good for the PG community and businesses. I know our students will come back changed, richer, and with a new perspective on life.

So what does this have to do with a personal finance blog? Nothing and everything. It is always good to get out of your comfort zone and question what is truly important and what makes you happy. I hope all of you have that opportunity.

To learn more about life in Punta Gorda, Belize, check out Sarah's Blog: http://belizeyoume.wordpress.com/

Friday, 15 June 2012

Ready for Retirement?

Not ready for retirement yet? You see your net worth decreasing? You are not alone. In fact, retirement may be a dirty word in your household as you wonder how long you are going to have to keep working.

In a new survey released by TD Ameritrade Holding Corporation, one out of every two Americans surveyed were not looking forward to retirement. The Federal Reserve Board’s Survey of Consumer Finances reported Monday that the average American family saw their net worth decrease 39% from 2007-2010. Other statistics show that 69% of the respondents have no specific savings goal. Those that did respond had an average retirement savings goal of $750,000. Only 54% were confident that they would reach their retirement savings goal. What is one to do?

Hopefully, the housing and stock market will bounce back and increase net worth, but that can’t be counted on. One way to increase your net worth so to prepare for retirement is to maximize your 401k plan at work. Make sure you are depositing enough to take advantage of any offered employer match. Try to save at least 10% of your income for retirement in a 401k or an IRA. Take advantage of a Roth IRA and Roth 401k if you think taxes will increase. The Roth allows you to save for retirement on after-tax dollars, but the growth and withdrawals will not be taxed.

Start saving for retirement early in your life. The best time to plant an oak tree was 20 years ago. The next best time to plan an oak tree is today. The same is true with retirement savings. Compounding can make a world of difference in your retirement. If a 16-year-old contributes to a Roth IRA on an annual bases until age 66, he or she would have more than twice the money saved than if waited until age 26 to begin savings. Making annual contributions of $2000 with an 8% return over 50 years would grow to $1,147,540, while the same contributions over 40 years would only grow to $518,113. The extra $20,000 invested in the first 10 years grows to an additional $629,428.

Not ready for retirement yet? You see your net worth decreasing? You are not alone.  In fact, retirement may be a dirty word in your household as you wonder how long you are going to have to keep working.

In a new survey released by TD Ameritrade Holding Corporation, one out of every two Americans surveyed were not looking forward to retirement. The Federal Reserve Board’s Survey of Consumer Finances reported Monday that the average American family saw their net worth decrease 39% from 2007-2010.  Other statistics show that 69% of the respondents have no specific savings goal. Those that did respond had an average retirement savings goal of $750,000. Only 54% were confident that they would reach their retirement savings goal.  What is one to do?

Hopefully, the housing and stock market will bounce back and increase net worth, but that can’t be counted on.  One way to increase your net worth so to prepare for retirement is to maximize your 401k plan at work.  Make sure you are depositing enough to take advantage of any offered employer match. Try to save at least 10% of your income for retirement in a 401k or an IRA.  Take advantage of a Roth IRA and Roth 401k if you think taxes will increase.  The Roth allows you to save for retirement on after-tax dollars, but the growth and withdrawals will not be taxed.

Start saving for retirement early in your life.  The best time to plant an oak tree was 20 years ago.  The next best time to plan an oak tree is today.  The same is true with retirement savings.  Compounding can make a world of difference in your retirement.  If a 16-year-old contributes to a Roth IRA on an annual bases until age 66, he or she would have more than twice the money saved than if waited until age 26 to begin savings. Making annual contributions of $2000 with an 8% return over 50 years would grow to $1,147,540, while the same contributions over 40 years would only grow to $518,113.  The extra $20,000 invested in the first 10 years grows to an additional $629,428.

Increasing your net worth and being prepared for retirement takes discipline and sacrifice.  Having the long-term vision of the future growth and your financial well-being helps to ease the pain of the sacrifice and can help increase your strength to save.