Traveling is Good for You

As anyone who reads this blog knows by now, my wife and I are frequent travelers.  While we always enjoyed traveling, now that we are retired, we have the time to travel as much as our retirement resources allow us to do.  Recently, we have been traveling a lot.  We just returned from a visit with our daughter and her family in Minnesota.

During our visit, we had a number of wonderful experiences in the Minneapolis area, which we will be writing about.  On the way back  home, we also made stops in New Glarus, Wisconsin and Springfield, Illinois.  

I will be writing about each of these adventures in the very near future. So, stay tuned.  What I wanted to share with you today is the somewhat surprising finding that traveling can be good for you, despite the perceived stresses of flying and driving.  

A study conducted by Expedia in 2013 found that 90% of vacationers experienced less stress after a day or two away from the office or factory.  Many other studies have shown that the failure to take regular vacations can both speed  up the aging process and result in a greater risk of coronary related disease and deaths. "Feeling Stressed? Hit the Road," Minnesota, Money Magazine, October 2014, p. 9.

Now, not everyone can travel or take a vacation as often as we do.  But keep in mind, if you can, give a vacation a try.  It just might save your life.

Do You Want to Play the Lottery and Never Lose?

Who doesn't like to play the lottery?  But how often do you actually win something? Oh, maybe you win a few dollars here and there.  And don't you just hate it when you lose  What if I told you that there is a lottery that you can enter that you never lose?

The answer lies in something called Prize-Linked Savings Accounts. What, you have never heard of them? You are not alone, neither have most people.I discovered them recently when I came across a reference to them in the editor's note to the December 2013 Money Magazine.  Intrigued, I did a little research and was quite astonished how simple and useful they are as savings mechanisms and as a means of satisfying that inner voice that insists that the next time I play the lottery, despite all the evidence to the contrary, I will win big.

Prize linked savings accounts are savings accounts offered by banks, credit unions and local and national governments which pay little or no interest, but which are eligible for participation in a lottery, where the   proceeds of the lottery are paid from earnings on the deposits. In other words, the savings portion of the account is never touched, but if lucky enough, you may win money with absolutely no risk of losing any of your savings. Sound too good to be true?  Well, in Europe and elsewhere, they have been offered since at least the mid 1950s.

In Great Britain, which was one of the first countries to adopt the accounts, it has been shown to have substantially increased the amount people have saved. It is estimated that more than 25 billion pounds have been saved by people in Great Britain since the program was initiated there.

While many states in the US consider these accounts to be a form of illegal gambling, four states, Michigan, Nebraska, Washington and North Carolina permit these types of win-win lotteries.Consideration is being given in other states as well to allow these accounts including Connecticut, Massachusetts, Rhode Island, Maine, Mississippi and Maryland.

I don't know about you, but it seems to make a lot of sense to permit these types of accounts. After all, most states now permit certain types of lotteries and many allow casinos. With the personal savings rate in the US an  abysmal 2 to 3 percent, the Prize-linked savings account may just be the motivation needed to improve that rate. This step not only gives the state's residents a chance to win money, it guarantees that none of the money deposited will be lost.

Sources:  Money Magazine, The Financial Brand

How Boomers Can Save Money in Retirement by Studying the Fundamentals of Personal Finance

We boomers all think we know more about money issues than we really do.  So maybe, we need a little help with our finances..  But who wants to go to a financial planner?  Even those who charge by the hour and do not take commissions can still cost you a pretty penny.  Money Magazine recently recommended two online courses to give you the fundamentals of financial planning. I thought I would test drive those for you and give you my impressions of the two courses.

First up is the course entitled "Fundamentals of Personal Financial Planning" offered by the University of California at Irvine. This no credit, no-fee course is available online at http://ocw.uci.edu/courses/course.aspx?id=12.  This course is not intended to replace a professional financial planner, but to help to give you a better understanding of financial planning. According to the course description, "The course was created to help those who cannot afford extensive planning assistance better understand how to define and reach their financial goals. It provides basic understanding so informed decisions can be made. The course can also be seen as a reference for individual topics that are part of personal financial planning."

The course is quite comprehensive, covering some 22 different topics from preparing cash flow and net worth statements to determining how much you will need for retirement.  If you are truly interested in planning your financial future, this is certainly a good place to assist you with your planning.  However, it does make certain assumptions that beginners may not be familiar with.  I think it is geared more towards the person with some general knowledge of the principles of personal investing who wants a refresher course.

In a future blog I will discuss another financial planning course from the Khan Academy. www.bettermoneyhabits.com.