Monthly Archives: June 2015

HOW TO SPEND LESS

How would you like to automatically spend less and protect your identity just by using cash in place of plastic cards. Two things most of us are concerned about especially during this new age of hacking. Many of us enjoy some level of fraud protection when using credit cards. If our card number is stolen, we can file a complaint and not be responsible for the charge. This wonderful benefit is why I use credit cards.

However, I met a vendor on vacation recently who told me he got rid of his cards forever. When I asked why, he said that his identity was stolen in the Target hack a few months ago. He claimed he never wanted to go through that again, so he only uses cash now. Beside identity safety, the very use of cash changes how we view our spending. The purpose of a card is obviously for ease of use. But, it has become so easy, it is a distraction to our perception of spending. Since we do not deliberate over our spending, we do not experience the “pain of payment” according to some studies. When we perceive this pain, we spend less.

We also value our purchase differently depending on how we buy it. “Across four experiments(1), we demonstrate that consumers perceive and evaluate the same products differently when primed with credit cards as opposed to cash. Specifically, when credit concepts are activated, people attend more to benefit aspects of a product whereas when cash concepts are activated, people attend more to cost aspects of the product being considered (i.e., the costs associated with product acquisition and use).” In other words, using cards takes our attention off the price and onto the product. Using cash reverses this perception.

Besides spending less and protecting your identity, I’ve noticed that using cash lowers the price of retail items. I bought some art from the above vendor who has a retail price of $60, but only $50 for cash without tax. I did not have the cash at that time and ended up paying $65 with tax. That is a 15% premium I could have saved. I recently had surgery, but since I don’t have health insurance, the cash price they gave me was 50% of the normal price. Remember, vendors have processing fees with cards that eat into their profit. So, they prefer cash too.

The above article also mentions a study that found using cards can be bad for our health. Using credit cards deludes us into making over-indulgent purchases that are not good for us. Weather it is eating or drinking to much, it appears that most purchases with cards can cost us in more than one way. So, lets trick ourselves into saving money starting right now.

In conclusion, using the simple method of cash payment:

1. Helps us spend less

2. Helps protect our identity

3. Helps get a better retail price

4. May even be better for our health

From: L. Johnson    www.creativeretirementforwomen.com

(1)Chatterjee, P., Rose, R. “Do Payment Mechanisms Change the Way Consumers Perceive Products?” 11-13-2011. Chicago Journals, Univ. of Chicago Press. Retrieved on 6-23-2015 from: http://www.jcr-admin.org/files/pressPDFs/111411131134_chatterjee–article.pdf

GREEN TEA UPDATE

The benefits of green tea have not been disputed, but there have been recent articles about lead and the effect of green tea extract on the liver, so its time for an update.

“Green tea benefits your health as an antioxidant, anti-inflammatory, antimicrobial, anti-carcinogenic, antihypertensive, brain protector as well as lowers cholesterol.(1)” We also know that it has a long list of nutrients, minerals and vitamins. Green tea has been shown to reduce cancerous tumors in skin, colon, liver, and mammary glands.

The above study reports that in Canada, black, green and oolong teas taken from local store shelves contained lead. Green tea from China had lead while green tea from Sri Lanka did not. Organic teas had the same concentrations. So, it’s not the tea itself, but where it’s produced that matters.

According to the National Institute of Health(2), “Drinking green tea has not been associated with liver injury or serum aminotransferase elevations.” But, the tea extract in diet supplements like Exolise(now rescinded) has caused some warnings. The problem is that the extracts have various concentrations levels. Even then, the article concludes that, “Liver injury from green tea is rare.”

What to do? You might hear that green tea is considered unsafe during pregnancy and lactation. Although, confirming studies are needed, it’s probably a good idea for women to refrain from tea “extract” and matcha use during this period.

In the NIH article, “Human clinical studies demonstrate that single doses of up to 1.6 grams of green tea extract are well tolerated.” That is equivalent to about 4 cups in extract from. However, if the extract form is questionable, why use it al all?

CONCLUSIONS:

1.  “The amount of lead is not dangerous if it is brewed. This is because 90% of the lead stays in the tea leaf itself.”(3)

2.  It is prudent to avoid green tea “extracts” or supplements until better research is available for both genders.

3.  Drinking green tea powder or Matcha can have concentrated levels of all ingredients.  “If in doubt(about its content), limit yourself to just one cup of Matcha a day and drink brewed tea for the rest of the day.”(3)

4.  Be more aware where your tea is grown and look for testing of the ingredients.

5. GREEN TEA WITHOUT LEAD: Bigelow Green Tea Naturally Decaf(bags), Salada Green Tea Naturally Decaf(bags), and Tevana Gykuro Loose Leaf. Matcha without lead is matchadna.com/organic/(based on studies that DNA can be restored).

So, we can continue to drink brewed green, white, black and oolong teas, but should switch to a higher non-lead quality for matcha drinkers and avoid extracts for now.   L. Johnson   www.creativeretirementforwomen.com

528E7GeI1KL1. Thyr, S. ND, “Green Tea Update” 6-24-2014. Retrieved on 6-16-15 from: http://www.naturopathic.org/article_content.asp?edition=105&section=157&article=926            2. National Institute of Health. “Green Tea” 4-3-2015. Retrieved on 6-16-15 from: http://livertox.nih.gov/GreenTea.htm         3. Becki. “What you need to know about green tea and lead” 10-14-2014 Retrieved on 6-16-15 from: http://www.green-tea-guide.com/green-tea-lead.html

Common Retirement Assumptions

We all make many retirement assumptions, some of which we are not aware of.  We feel entitled to an enjoyable retirement after working most of our lives either inside or outside the home. Social Security and Medicare are entitlement programs that we all assume will ensure a big part of our retirement income. Some of us assume that we will live well without a partner because of our network of good friends. If we have a partner, we assume they will be there for us. We further assume that our health will continue to be stable. We certainly don’t expect to become disabled or significantly impaired in any way.

The hard truth is that many assumptions in life don’t work out. When you were young, did you think you would be where you are today? Of all the mis-assumptions that are made, I find that the most mis-calculated area is in money matters. Many women I speak with assume that the financial part of retirement will be taken care of. Some mention that their parents will pass on their money, that Social Security will provide for them, or their partner or advisor will help.  It’s the number of static assumptions without backup plans that worries me the most.

Why don’t we prepare better? Well, assumptions set expectations for the future and reduce our worry. Since we don’t want to worry or feel anxiety about the future, assumptions offer predictability and provide us with perceived security. When we feel too secure, we become complaisant about building our savings and investments.  So, many of us find it easier to live with assumptions. However, assumptions afford us less understanding, less control, hinder our problem solving skills and can even ruin your retirement. We trick ourselves into a false sense of security.

A common example is a wife who gives financial control to the husband while assuming he won’t make investment mistakes.  I can tell you from personal experience as a stockbroker and real estate investor that everyone makes mistakes when investing. How people deal with these mistakes is determined by the amount of experience they have with market losses. But, even in this day and age, many women still allow their advisor or partner to handle personal investments and often turn a blind eye. That can be a big mistake since men typically take more risks when investing. (See: http://blog.creativeretirementforwomen.com/women-need-female-financial-advisor/)

For many women, learning investing is like going to the dentist. But, I believe that is simply an attitude that can be changed at any time. If you’re not worried because your partner is financially knowledgable, what if you outlive him? Being a single woman only increases the need for financial acumen as you must depend on yourself. So, just as we become resigned to go to the dentist, we also must become resigned and determined to manage money. After all, it is your future.

It helps to think like a single women who must be self-sustaining and more creative than her counterpart. Most single women do not assume someone will take care of them, they know they have to do it.  I know that many people find money management too complicated, laborious or even boring. To help make investing more exciting, consider joining an investment club, engaging in online discussions, read books, and take classes. If you are single or a couple, taking investment classes is a solid foundation to build upon. I also like investment clubs because you get actual experience investing and you get to hear all the strategies. You can even start your own investment club if one is not in your area. Think of it as similar to a book club. Even if you are seeing an advisor that you trust, you still want to understand the strategy and the risks–you never want to be in the dark.          L.J.      www.creativeretirementforwomen.com

WHY RETIRED WOMEN LIVE IN POVERTY

What if I told you that retired women are almost twice as likely to live in poverty compared to men. The reasons for this begin with different genes that set men and women on different life paths. Women are often the caretakers for their children and their parents. This experience can dramatically enrich the lives of those cared for. But, both of these situations mean less employment, less savings, and less social security. “On average, women work 12 years less than men do over the course of their careers.(1)” The above chart reveals the financial result for 2012.

We are all aware of the historical gender wage gap for the same position. This gap is estimated to be anywhere from 76 to 80 cents of what a man earns. This difference may be slowly closing, but equality still looks a couple of generations away. So, thats not going to help us right now.

CNN Money(1) reports that, “Female workers make up about two-thirds of all part-time employees.” The problem with this is that health insurance and others benefits don’t kick in for part-timers. Working part-time also means less goes into your savings and for social security benefits.

Medical expenses for women are expected to higher throughout each life stage. The bottom line from many studies is that, for various reasons, women just need to see the doctor more often which ends up costing more. This is partly because women have different needs and partly because of being more alert and concerned about resolving medical issues than men.

The lifestyle needs for women are more complicated and expensive than for men. Women spend more on hygienic and cosmetic items that men don’t need or want. Men can get away with letting their appearance slip, but that doesn’t work for most women. A decent appearance is important whether you are retired or not.

I also believe that your relationship with money becomes a factor. Women do not put finance and investing at the forefront of their lives since they view other things as more important. Women also tend to not talk to other women about the pursuit or accumulation of money. So, as women focus on areas of their life they feel are more enjoyable, like family and friends, investing often takes a back seat.

So, the factors working against many women are less lifetime employment, the gender wage gap, part-time work, medical needs, lifestyle expense, and a tentative relationship with money. As a result of the above and probably other factors, women are almost twice as likely to reside in poverty in retirement. In my next article, I’ll discuss what to do about it: http://blog.creativeretirementforwomen.com/how-to-spend-less/.        Lee Johnson    

(1)Hicken, M. “Why many retired women live in poverty” 5-13-14. CNN Money. Retrieved on 6-3-15 from http://money.cnn.com/2014/05/13/retirement/retirement-women/?iid=EL