24 June 2009

financial planning (or the lack thereof)

One of our closest friends in Boston is a financial planner, and when he invited us to an informal meeting with him, we said sure.

a. We know nothing about financial planning and figured we'd likely learn something.
b. We will likely use up all of our money during this coming year of travel, so we figured we had nothing to lose/invest.
c. He's our friend, and we didn't know how to say no.

The meeting was, as expected, very informative. But it was also really, well, grown-up. Since when do I need to start thinking about life insurance and wills? Isn't that for old people? Or people with something to leave others?

When I was little, I thought being 20 was old. I figured I'd probably have a house and be married by then. Right. (When I was actually 20, I thought I'd never own a house or be married.)

Now, I am actually married and can see buying a home in the not-so-distant future. And it's interesting that yet another industry has been created to deal with human laziness. As our friend told us, most people could do 90% of what he does. All it takes is the time to research all these different financial strategies and the discipline to actually carry out the master plan.

Of course, most of us do neither the research nor the discipline (see: current economy), and voila-- financial planning is a huge, profitable industry. For a fee, you have an expert who is constantly refreshing himself (well, we hope so) on all the salient changes that will affect your financial future. Who will then prod you to make good choices.

The little kid in me is about to shoot herself. "Financial future"? Good lord, who have I become, using words like that?

Our friend asked us if we planned on saving for our future children's college education. My partner and I laughed at the thought of our unborn children going to college one day, and we joked that we'd be better off being poor and getting financial aid. But it's a sobering question, with college costs pushing higher and higher every year.

It's also interesting to me that our friend has been the second person who has said we are "going on vacation for a year." I never thought of it that way. I thought of it as an adventure, yes, but vacation sounds like sitting on a beach and doing nothing.

My first reaction was, 'Hey, buddy, we'll be conducting field research in Tanzania, not sipping blue CuraƧaos on a motu.' But, of course, how do I know that? Maybe we will be sipping on blue CuraƧaos on a motu. And if we did, it wouldn't be the end of the world.

I guess my question now will be how to make this year ahead meaningful. We leave in six days, and while some of our trip has been loosely mapped out, parts of it have been left intentionally unplanned. I'm curious to see how different those experiences will be.

And maybe, during our downtime (hours spent waiting in an airport, for example), we can read up about financial planning.

Right. Who am I kidding?

So, my second question to you is: do you do your own financial planning (if you plan at all)? How should one do it? Does one just buy a Suze Orman bestseller and do everything she says? Read all of the Financial Planning for Idiots books, plus the Suze Orman books and pray for the best? Or hire an expert to keep you on track?

(Or just keep on winging it and hoping catastrophe stays far away? I guess our current strategy isn't the best one.)

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