By Joe Soong
In these tumultuous times, life can be confusing and filled with uncertainty. However, there are strategies that can assist us in navigating our financial and personal lives. The following are a few guidelines that I’ve come across, some of which offer practical advice and others that, if nothing else, offer an interesting perspective.
100 – Your Age = % of Stock holdings
For decades, financial professionals have repeated this maxim to their clients—“With increasing age, an investor should have proportionally less money in equities and more in stable assets such as cash and government bonds.” And it seemed to make sense.
Those with many working years ahead of them could afford to take some financial risk. They would have plenty of time to recoup any potential losses. For those edging toward retirement age, there would be less time to ride out the inevitable market fluctuations, so asset preservation became a more prudent strategy.
This philosophy went out the window during the last stock market bubble. Investors of all ages had up to 90 percent of their non-real estate assets in the stock market. For awhile, it looked like a smart decision, as equities soared upwards.
Now, of course, not so much. Many people paid a very heavy price as they forgot an important financial rule—What Goes Up Really Fast, Must Come Down Really Fast.
Car price < = Your Age
San Marino, the Beverly Hills of the San Gabriel Valley, is located adjacent to Alhambra, its poorer cousin. As a long time Alhambra resident, I can say that it’s nice having rich neighbors. Just a few blocks north, the lawns become bigger and greener and the road dividers have roses (really).
In the same area, I’ve also seen high school kids driving very expensive cars. Of course, I don’t begrudge parents sharing the fruits of their labor with their children. However, I’m not sure if this does the kids any favors as it can skew their perception of the real world. Things, especially nice things, don’t grow on trees. Mom and Dad earned it with their time and work.
I came up with a helpful guideline for determining an appropriate vehicle for younger folks. A car’s value should not exceed the number of years a teenager has been on the planet. For instance, a seventeen year old’s car should cost no more than $17,000.
A high school student only needs a car to drive to school, a local workplace or the occasional road trip to San Diego or Las Vegas. A Honda Civic can accomplish this as effectively as a $50,000 Mercedes Benz.
Actually, taken a step further, the rule can be applicable to anyone, regardless of age. If, at age 40, I want to spend $40,000 on my car, I should be smart enough to know whether I can afford it.
Especially after these last few painful reality checks courtesy of the stock market and real estate market, most of us now see our financial world through a more pragmatic, and less rose-colored lens. That $25,000 Camry/Accord is definitely looking better.
(Man’s Age/2) + 7
How young is too young? Because they were both deeply in love with each other, Playboy pin-up Anna Nicole Smith married an 89-year-old billionaire, who was 63 years her senior. He may or may not have truly been the apple of her eye, but she almost certainly had great affection for his ten-figure bank account.
So, if there is a significant age difference between the older man and younger woman, how can a cynical observer determine whether the romantic relationship has a future? Well, look no further.
This guideline came to my attention from a friend who overheard it at a local church. Take half the man’s age, divide it by two and then add seven. For instance, if the man is 56 years old, half of his age is 28. Add 7 to 28 and the guideline tells you that the better half should be no younger than 35.
It’s an extraordinarily unscientific guideline. But it’s the only one I’ve come across, and is, at the very least, good for a laugh at a party. As an added benefit, if you tell it with a straight face, people will be impressed by your romantic acumen.
I’ve had personal experience in relationships where there has been an age gap between the man and the woman. While there are always issues that can become problematic, I’ve found the age difference tends not to be a significant consideration. But that’s just me.
Haven’t heard anything about older women and younger men, but am keeping my ears open.
AAAA (The Four As)
More than a few years ago, I dated a USC graduate for awhile. It didn’t work out, but she did tell me of an amusing metric used by her sorority sisters to evaluate prospective suitors. By their definition, the ideal guy would have the Four As – (A)rmani, (A)merican Express, (A)dvanced Degree, and (A)mbition.
At the time, as I escorted her around town in my Toyota Corolla, I calculated my score to be a sad looking 1.5 out of a possible 4As. I began to get the idea that our budding relationship might not be as promising as I thought.
However, I now realize that the Four As might only be an effective evaluative tool for specific segments of the population. A different set of criteria would be necessary to properly gauge those from other backgrounds.
As an alternative to the Four As, I’d like to propose a new measurement. This barometer would more accurately measure success for us public school folks.
Presenting the Seven Cs – (C)ostco, (C)itibank (C)redit (C)ard, (C)amry, (C)ondominium, and (C)son tickets, preferably Dodgers.
What was my score? Decorum prevents me from telling you, but it’s more than 1.5…
Joe Soong writes from Alhambra and can be reached at [email protected] The opinions expressed in this column are not necessarily those of The Rafu Shimpo.