Tag: Risk

Depending on the Kindness of Strangers is Risky

Have you seen the article about the 82-year old Walmart employee who received over $100,000 from strangers so that he could retire?

This story makes me very, very sad.

I’m not sad because people reached out to help this senior citizen , nor am I sad that he retired. No, I feel despondent and a little discouraged because he’s also in a system where working to death is the only option for so many. Had he not been “lucky” enough to be cashiering for a TikTok influencer, then it’s doubtful he would’ve benefitted from the kindness of strangers. He would still be working, just like countless other elderly people whose personal stories go untold online.

Truth be told, I’m not convinced that he was working because that’s what he wanted to be doing at age 82. If that had been the case, then I doubt that he would’ve retired upon receiving the six-figure cheque. He would’ve banked the money and gone back to work – just like all those other people who work because they love their jobs! He wasn’t the CEO of a successful company that he had built from scratch. There was nothing in the story to suggest that working as a cashier fulfilled his most cherished dreams and desires. None of the details of this story indicate that his employment brought him a sense of fulfillment or a belief that he was pursuing his life’s purpose.

Instead, the story was about a senior citizen who was toiling away with no end in sight. I can only assume that he earned just enough to not starve to death but nowhere near enough to ever stop working.

Think about your own circumstances. When will work become optional for you? Do you want to be forced by your personal finances to work at age 82? Or would you prefer that working at that age be a choice based on your passion for what you do?

If it’s the latter, then make sure that you’re building your financial cushion today. The sooner you start, the better. Invested money needs time in the stock market to grow. I’m not in any way suggesting that you sacrifice every single joy that you have in order to save for the future. That’s an awful way to live!

Sixty of seventy years ago, the internet didn’t exist. I cannot blame that 82-year old Walmart employee for not knowing about mutual funds, exchange-traded funds, and other investment products. The information wasn’t as readily available at one fingertips, not like it is today. The search engines, online classes, blogs, robo-advisors, self-directed brokerages, and podcasts from which to learn were not there for him until well into his late 50s and 60s.

The same isn’t true for you. If you can find this blog, then you can find anything you need to know about investing. The information is there. You need only go and find it. Do yourself a huge favour! Make the effort to maximize the odds that working in your dotage is a choice and not a requirement.

Invest some of your disposable income for long-term growth. Spend the rest of your money however you want. Just make sure that you never touch your long-term-growth money. A slice of every paycheque should be invested every time you’re paid. The capital gains and dividends should be automatically re-invested. It won’t happen overnight, and it will likely take years, but you’ll eventually have a stream of cashflow from your investments that can be used to replace your paycheque. Once that happens, then you will truly be working because you want to and not because you have to.

Take steps today so you’re not in the same position as this 82-year old cashier. Depending on the kindness of strangers to fund your retirement is risky. While this man was “fortunate” enough to be helped by a group of online strangers, there are countless others who need the same help but will not get it. This is how our system is designed. There is no onus on anyone to give you the retirement that you prefer. Our legislation provides you a financial floor. You can rest assured that it will not be enough for you to live the way you want in your dotage. Thankfully, there are steps that you can take to minimize the odds of an impoverished old age. It’s up to you whether to follow them.

Credit cards everywhere!

Earlier this week, I went shopping at Canada’s last remaining national department store. I’ve been searching for black pants for the past few months and I had some time to kill between appointments so I took myself shopping, an activity that I normally hate very much.

To my very pleasant surprise, I found the pants that I was looking for and they were on sale for $29.99. Hooray for Blue Lobster! Exactly what I wanted at a price that I was willing to pay. Does it get any sweeter than that?

So I took my awesome find to the till…and the credit card tussle began.

The cashier asked me if I had a last-remaining-national-department-store credit card, which I’ll refer to as the LRNDSCC for simplicity’s sake.

I said that I did not.

She asked me if I wanted to apply for one.

I said “No, thank you.”

At this point, she gave a look that very nearly had me checking my shoulders to see if I’d grown another head.

The cashier doubled-down. She told me that I could save 15% on my purchase if I were to apply for a LRNDSCC that very moment.

Again, I replied “No, thank you.” And then I threw her for a loop. “I don’t need any more credit.”

I thought she would faint, but she held it together. That cashier indicated that it wouldn’t take but a minute and she repeated that I would save 15% on my purchase immediately.

Once more, and with a smile, I told her “I don’t need any more credit.”

At that point, she stopped pushing the credit card. I have assume that, during her cashier training, she’d been instructed to keep pushing credit until the customer had denied it three times.

She was so perplexed by my refusal that I almost felt sorry for her… until she asked me for email address. I told her I didn’t want any email. She started to tell me that providing my email would allow me to get notice of sales and special offers. I just shook my head. Still reeling from my denial of credit, that hard-working cashier simply gave up and rang up my purchase.

Why not accept the credit card offer?

I thought about this a lot on my drive home. It’s a bit more complicated than the fact that I don’t need more credit. Tis true – I don’t need more credit. I have plenty and it’s sufficient for my purpose. In a certain respect, credit is like dish soap. Why would I use more than I need?

The other reason I didn’t accept the offer was because I don’t believe that the reward was worth the risk.

Risk, Blue Lobster? What risk is there in accepting a store credit card?

Well, there’s the risk that my information will be compromised. The more cyber locations housing my personal information – name, address, social insurance number, salary, etc – the more opportunities for Bad Guys to steal it and engage in identity fraud against me.

Limiting the number of creditors with my information offers me some measure of comfort and control.

Check this out – 37,000 customers from Transunion have had their information compromised. This is not a good thing. I might already be one of those unfortunate customers, so I’ll have to keep a close eye on my credit cards to ensure that my financial identity remains safe. I suggest you do the same thing too.

On a purchase of $29.99, I wasn’t willing to increase the risk of identity fraud simply to save $4.50. Fortunately, I had the extra $4.50 in my budget to make the purchase without impacting my ability to pay for shelter, food & my bare necessities. My choice to spend the additional $4.50 means that I won’t be taking on the risk that Bad Guys hack into the credit card information of the LRNDS and steal my personal information.

The third reason why I didn’t accept the credit offer is simply because having credit in my wallet means being tempted to spend on that card. Why put myself in a position of temptation if I don’t have to?

The 15% discount was a one-time thing. Again, I would’ve saved $4.50 on a pair of pants if I’d accepted the offer. Yet, I would have a shiny new piece of plastic winking at me from my wallet. And the sole purpose of that new little item would be to put me into credit card debt.

So how many credit cards do I have?

I have two. They’re accepted everywhere. One is for my day-to-day, and the other is for travelling. Both of them are free. Both of them offer rewards that suit my lifestyle perfectly. Personally, I see no reason to get anymore credit.

While I’m willing to accept that credit cards are a convenient tool for many people, I still think it’s a great idea to limit one’s access to this particular tool. My rules for this tool are simple – pay it off, in full, every single month. If you can’t do that, stick to cash.

Physical currency will buy you the exact same things that credit cards will, and it provides the additional benefit of preventing you from ever going into debt. Cash is still king for a reason.

The next time you’re offered a retail credit card, be brutally honest with yourself. Think about whether you really need it. Will you be tempted to spend on that new credit card? Is the savings of that particular purchase worth the risk of someone hacking your information?