Love and Finances: Navigating the Empty Nest Journey Together on Valentine’s Day

Photo by cottonbro studio: https://www.pexels.com/photo/monochrome-photo-of-couple-laughing-3692738/As the calendar turns to February and the aisles of stores don shades of red and pink, Valentine’s Day beckons us to celebrate love in its many forms. For empty nesters, this annual occasion may evoke a spectrum of emotions, from nostalgia for the days of homemade valentines and family celebrations to the excitement of rediscovering oneself in an Empty Nest. This Valentine’s Day, let us embark on a journey of self-love and exploration, embracing the unique chapters that unfold beyond the hustle and bustle of parenting. In this article, we’ll explore the various types of love that empty nesters can gift themselves, turning this heartfelt day into a celebration of the enduring, evolving, and ever-expanding tapestry of love in their lives.

There are many forms of love you can give yourself, such as:

Self-love- you can take the day off to do something for yourself, golfing, facial, etc.

Romantic Love (with your partner)- you can take your partner to a nice dinner.

Friendship love-you can go out with a group of friends to lunch.

Family love- you can spend time with your family, perhaps bake together or go out to dinner.

Nature love- you can take a walk with your dog under the colorful trees.

Let’s navigate now to giving your finances some love.

Perhaps you can remember a time when put too much butter, salt or any ingredient in a dish that made it so delicious? After eating the dish, your stomach later starts to get nauseous, and you feel like you are sick! The same is true with investing in one single company, a stock. The reward may be high, and you feel a good sense of accomplishment when you see the price rising at any given moment, but if it goes down, your stomach starts to get nauseous and you feel sick! There is a toll on your well-being or prosperity when excessively emphasizing one element over the other.

Here is one alternative, a mutual fund or ETF. These types of investments contain many ingredients, many stocks, to where it becomes more diverse, and reduces the risk element to your portfolio. To illustrate the difference, will take Enron, a natural gas company that was founded in 1986, went bankrupt in 2001 vs a mutual fund that contains a basket of several stocks and professionally managed almost impossible to lose it all because of the element of diversification.

I remember an employee of Enron who worked for the company for 30 years, was just about to retire at 65, came into my office, sobbing because the pension she was anticipating, was no longer viable. Not only did she invest all her 401k in Enron stock, but the trust she had in the company she worked for promised her a pension upon Retirement. Now, you would think this would be a lesson learned.

Subscribe now

Today, I still sit with clients who swear that their company is the best company ever existing, their CEO would never lie to them, and they understand the operations of the company. So, what I see is over 50% of their net worth is investing in one single stock, the stock of the company they work for.

To clarify, this is not stock that they went off and bought on their own. This is stock that was given to the employees as a form of incentive, either in an ESOP, a stock option plan, a 401k or alike. The employee is responsible for diversifying their portfolio after accepting the ownership of the stock, not the company.

Here is where it goes south, greed, concentration by way of trust in one single company and lack professional advice.

In summary, while mutual funds and ETFs may not go bankrupt in the traditional sense, they can close or liquidate due to various reasons, and investors are usually provided with options for dealing with their investments in such cases.

The moral of this true story is work with a professional who can give you advice, assess your risk level, discuss your financial goals, and just as important, help mitigate your taxes along the way with proper tax planning. If you want more information, you can go to Serenityfinancialplanning.com.

Happy Valentines Day!

Susan