Personal Finance Blog


Why flying in an airplane may become quaint in the next 100 years.

Flying has always had a certain romance to it. The trouble is, as soon as airlines figured out what they had, and demand for their product increased, the price of airfare went higher than a new Boeing Dreamliner. Sure, deregulation gave consumers some options when it came to choosing flights that fit their budget, but almost as soon as that happened, airlines began doing everything they could to cram as many passengers onto planes as possible- getting rid of leg room, minimizing seat size, and adding as many rows onto planes as they could to try to offset that loss of revenue by sheer volume of tickets sold on each flight. Now really, you can’t blame them. They have shareholders to answer to, regulations to follow, and employees to pay.

That doesn’t mean the industry is going to be around forever, though. In fact, there may come a day in the not-too distant future when riding on an airplane will become as quaint as riding a horse and buggy are today.

Some of the technology under development in the automotive world today is what will ultimately end large-scale air travel- simply because it’s more cost effective in the long run. Imagine for a moment getting into your car in New York at 8pm, and by the same time the next day, being in California. Impossible, you ask? Fifty years ago, cars rarely exceeded 65-70 miles per hour safely. Today’s tire technology allows many cars to travel 85+ miles per hour (albeit illegally) with a margin of safety. Future tire technology could see cars that safely and easily exceed 120 miles per hour, and when you combine that high-speed travel with the rapidly evolving technology that is autonomous driving, what you are left with is a hyper-efficient vehicle that could get on the highway, let you sleep, watch movies, or play games with your family in a mode far more comfortable than an airliner could possibly manage, even with more legroom.

Much of the argument in favor of air travel as opposed to highway travel is the safety factor. There’s no disputing the fact that airlines today are far, far less likely to have an accident than you are in your car, but looking into the future, this is almost guaranteed to change, as the next two to four generations of young people will begin to see driving and flying very differently than we do today. If the future lack of air travel as a regular means of transportation comes to pass, it bodes well for bringing back the idea of the family car trip, and at the end of the day, actually making it once again the best, most affordable way to travel.

Posted in:  cars
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You Don’t Need Whole Life Insurance?

Insurance is a strange sort of financial product. Sometimes it’s needed, sometimes not, and life insurance in particular straddles that line deftly. In the history of man, there may have never been a more insidious way for corporations to separate people from their money willingly, call it an investment, and be thanked for the opportunity.

Whole-life insurance plays upon a host of psychological influences that make it seem that you’re getting a great deal on those things that are being sold. After all, they tell you you can “lock in” your rate if you buy insurance early in life, which trips most people’s “buy it cheap” gene, and then you’re expected to hold that insurance throughout your life in case something happens to you, playing on your fear of death.

What if I told you that you were wasting your money on whole-life insurance? Would you hear me out? First, let’s take a brief look at what insurance is meant to do. Think of it as a debt mitigation tool. It covers your funeral expenses, which is pretty great, since funerals can pretty easily run north of $15,000, and the price can go up astronomically from there. Next, it covers your outstanding financial obligations. Credit cards, student loans, mortgage – that sort of thing. After all that, it can be used to provide for the living expenses of your survivors, or can be used to make a donation to a charity or organization you care about. Let’s keep it simple, though, and leave it at that for a while. There are other aspects of life insurance, but those are really the big ones there.

What insurance is not meant to do is make your survivors rich. That’s just Hollywood talking there. It’s also one reason why whole-life insurance isn’t as great a thing as you might think (or have been led to believe.) You’ll simply never get out of it what you put into it, and if certain conditions of the policy aren’t met, the insurance company can simply cancel your policy, send you the cash value, and be done with you.

Not surprisingly, a better option is to be self-insured. Basically, you live as debt-free as possible, save up money like it’s going out of style, and build up your retirement savings as much as possible. Once you’ve got enough put together to take care of those things, you’re effectively self-insured, and you won’t have to deal with all that life insurance garbage at all!

Posted in:  Insurance
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What Options Exist for Workers Nearing Retirement?

When you begin to reach retirement age, building up your savings really takes on a whole new level of importance. You might be facing the prospect of coming up short in your 401-k or other retirement savings, and are wondering with some despondency how you’re going to be able to retire at all, given the escalating cost of medical care, rising cost of living, and relatively poor performance in traditional investments.

The first thing you have to do is put away your despair. It won’t be that bad. With a little care and preparation, you should be able to at least enjoy those aspects of your retirement that are most important to you. Sure, you may not get to buy that globe-trotting ticket you had dreamed about, but really, even that can probably be pared down a little bit, providing you with at least enough experiences to be satisfied with the life you’ve led.

It’s important, though, to keep saving up as much as possible in tax-deferred accounts. You may find yourself having to sell some non-necessities, particularly things like expensive cars or other big-ticket toys that you may feel you’ve earned, but in particular if you’re making payments on those items, or on other heavy debts, retirement will be a lot less enjoyable later on. Sure, it might be great to cruise around on that brand-new Harley Davidson, but if you can’t afford to put gas in it, it won’t be so great, will it?

In the last ten years of your full-time working life, it’s a great time to really sock money away for your retirement. Many retirement plans allow you to make catch-up contributions in these years, so take advantage of them as much as possible.

Finally, work hard to get your debts paid off, and keep them paid off. Crazy, irrational spending will only weigh you down and prevent you from actually being able to relax in your retirement. Get your household budget worked out, and start living at the level you’ll need to retire on, and find yourself much more able to enjoy the fruits of your labor later on. Sure, it may be necessary to work part-time when you retire if you haven’t saved up enough, but these days, it’s actually pretty unusual to see retirees who don’t work at least a little bit to keep themselves busy, active, and to supplement retirement income streams.

Posted in:  Financial Planning, Retirement
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