Dear Dave,
My parents recently lost their home due to some very bad financial habits. They have always had financial problems, even though my father is smart and makes good money. They found another place to live, but since all this happened, my father has been constantly askingmeformoney.Heasks me to come over to talk about this when my husband is at work, and my mother isn’t home. The last time, he even asked me to give him half of an inheritance I received from my grandparents. I’m really feeling guilty about everything. Can you help?
Alicia
Dear Alicia,
I know this is a hard thing to talk about. It’s an even harder situation to be in. Honestly, I think your brain knows exactly what needs to be done, but your heart is having a tough time handling it all.
What I’m going to say next will be difficult to hear. Your father is being manipulative. He’s acting like a travel agent for guilt trips. There’s nothing wrong with doing a few, short-term things to help out your folks if they’ve been through a rough time. But something like this shouldn’t become a habit, even with parents. And if you choose to help them out, you have every right to expect to make that help contingent on the fact they change the behaviors that put them in this situation.
There should be no more private meetings with your father, either. The next time he calls, you need to make sure he understands a meeting will only happen if your husband and mother are present. To this point, he’s tried to hide all his sneaky behavior. This should be brought out into the open and stopped. I know you love your parents, Alicia. That, along with your dad’s behavior, is what’s making this so difficult. But taking part in this sort of thing isn’t going to help anyone. Plus, it’s dishonest.
Any financial help you give needs to have limits. No loans, either. Make it a gift. You and your husband should agree on exactly what you’re going to do, and how much you’re willing to give. And it should be on your terms. Don’t get involved in giving them money every month for the rest of their livesjustbecausethey’reyour parents. That’s not how this is supposed to work.
— Dave Dear Dave,
I’m 50 years old, and through a series of bad life decisions, I have nothing set aside for retirement. Now that I’m finally in a better place financially, I’m getting to the age where people say to invest conservatively. Because of this, I’m afraid to investinanythingaggressive, and that makes me feel like I’ll never be able to have a decent retirement. I’ve put aside $20,000 in a savings accountsofar.Anyadviceyou have would be appreciated.
Jack Dear Jack,
First of all, you’re not at the age where you need to be investing conservatively. I don’t know where you heard this or who told you it was a good idea, but they’re wrong. You’re only 50. I’m not investing conservatively, and I’m 63. I’m investing in good, growth stock mutual funds that are growing like weeds. And you should be too.
Listen, I’m not saying you need to shift into panic mode. But you do need to get moving on this retirement thing today. It’s great that you’ve started saving money, but I’d be pretty nervous if all I had to my name at age 50 was $20,000. At this point, you should have something like $250,000.
You mentioned being afraid to invest more aggressively. I’ve learned over the years there are two situations where fear can be a positive thing. The first is being afraid of things we don’t understand. One day when I was 12, my dad told me to move the car. I didn’t understand you weren’t supposed to stomp the gas pedal all the way to the floor. That little episode scared us both silly, and I spun almost all the gravel out of our driveway. Now, with years of practice and understanding, I’m a better driver. Being behind the wheel doesn’t scare me at all.
The other positive type of fear is being afraid of things that can legitimately hurt us — like standing in the middle of the highway. If you do this, you should be afraid an 18-wheeler will come flying down the road and turn you into a pancake.
But when you’re afraid of something just because you don’t know how to do it — like you are with investing — you can dispel that fear with knowledge and wisdom. That’s why I want you to find a good investment professional. I’m talking about someone with the heart of a teacher, who will help you learn the ins andoutsofinvestingandtake away the fear you feel. If you do this, your confidence, and your knowledge, will begin to grow. Once that happens, you’ll start to feel comfortable pouring into good retirement investments.
Get to it, Jack. You can make this happen!
— Dave