Happiness Quotient

You may have heard of the term wealth effect - it is the idea that when the value of stock portfolios, IRA's, 401k"s, rises due to escalating stock prices, investors feel more comfortable about their wealth, allowing them to spend more.

We now have the happiness quotient as determined by studies in the UK where a group of social scientists measured the "happiness" of bank clients through multiple surveys. They found that overall wealth was not the factor. What produced a true sense of happiness and well-being was the amount of available cash in personal checking or savings accounts.

Invested money or a pension felt either abstract or inaccessible whereas their large ATM balance evoked a sense of security and importance.

The thought of surplus cash not invested as losing value (due to inflation, lack of growth) misses the human psychology element. The premise is how you maximize your well-being over maximizing your financial benefit.

Ways to increase your happiness:
1. build your savings i.e. your emergency fund,
2. save for vacations before you take them,
3. live within your means (aka spend less than you make),
4. buy experiences not things,
5. give money to causes that feed your spirit.

Be $ Smart: Enlarge your cash buffer to increase your sense of personal power, security and happiness.

Personal stories...

We never know how our lives may be impacted.  Right now I am awaiting the arrival of Sandy and wondering what havoc the storm will wreak.   I also feel powerless with my daughter, 8 1/2 months pregnant, over 200 miles away wondering how she will fare with the storm's low pressure and a full moon!
Life sometimes throws us lemons; it's up to us to make lemonade.

Please read the personal stories of a few people whose lives I have been privileged to guide:
One wintry, snow filled night Louise R. and her husband, Stan were returning from a friend's home in the next town.  The roads were icy and Stan could not control the car.  Stan did not survive the accident and Louise was hospitalized for two months.  No sooner was she home than the insurance agent arrived with the check for the life insurance policy on her late husband.  Before he left, he had sold Louise an annuity using the insurance  proceeds.  Fortunately, Louise had a good friend who called me for assistance.  I was able to review the annuity, determine it was not appropriate for Louise and had her money returned to her.  Louise understood she was grieving the loss of her husband and was not able to make important decisions at this time.  She hired me to assist her with all financial decisions for one year.

Margaret L. came to me devastated on learning that her doctor husband of 28 years had been diagnosed with terminal cancer and had less than a year to live.  Margaret was an artist and never bothered with money leaving all the decisions and bill-paying to Hal.  Over the next six months Margaret met with me for one hour a week learning financial terms and taking  money-tasks home to perform.   She arrived for her appointment one day very excited about a visit to their estate attorney the previous day; she actually understood what the attorney had presented!

Cathy C.  had  a trust fund left to her by her grandparents.  She gave me a call to learn if she should refinance her mortgage.  After reviewing Cathy's substantial portfolio we were able to determine she had more than enough assets to pay off the loan  and live mortgage-free.   We also reviewed the charities to which she contributed 10% annually based on her family tradition.   We found new organizations that spoke to those things about which Cathy felt strongly.

Larry T. had suffered an injury while working as a carpenter apprentice for which he received a  reasonable  settlement.  We reviewed Larry's job prospects and financial goals.   Larry opened a savings account and paid off his credit cards and medical bills.  Once those items were satisfied Larry had enough money to put a downpayment on a small wood-working shop of his own.

Sally P. had been a nurse for almost 30 years.  She was single and frugal.  Toying with the idea of retiring in a few years, Sally wanted to start enjoying the fruits of her labors while she was still physically able.  Her dream was to take one BIG trip a year until she retired.  On reviewing Sally's savings, pension and social security we determined Sally would certainly have sufficient money to satisfy her wanderlust without jeopardizing her future.

Welcome to My Blog!

Hi!  My name is Eileen Hawe.  I’ve been working in financial services and personal finance for almost 30 years.  It’s an industry that’s rife with conflict of interest.  I witnessed it first hand and understand the need for basic, clear, unbiased information. 

Have you ever had to make an important decision, looked for help or direction and didn’t know whom to trust?  Or, while sitting across from a financial adviser heard that little voice in the back of your head wonder “what’s in it for him/her?”

I will answer your questions, even the “dumb” ones, clearly and simply.  I will guide you through the rough times, get you back on your feet and help you realize that personal finance is not rocket science. 

I love what I do.  I have a skill which I am happy to share with you.  It makes me feel good; we both benefit. 

Follow my blog where I will post important financial facts on a regular basis.

For example: are you familiar with The Rule of 72?

Take the interest rate you are earning on an investment (a CD earning 2%).

Divide that number into 72 to show the number of years it will take to double your money.  (72/2=36)  Thirty-six years. An investment with a higher return of 6% would double your money in 12 years.  (72/6=12)  Twelve years. Higher returns may have higher risk.

 Also, IRA Conversion:  did you know that this year might be a good time to convert your regular IRA (individual retirement account) to a Roth IRA? Many portfolios have lost money in the second half of 2011 so the taxes due on the conversion may be less.

If these tips have helped you, contact me to schedule a meeting and I will guide you to financial security.