Life takes unexpected twists and turns, doesn't it? Consider the case of Ralph Stebbins. You might think of him as the luckiest guy in the world: In 2005, he and his wife won $208 million in a Mega Millions lottery drawing.
I'm not a big advocate of lotteries, since our odds of winning are so microscopic (think smaller than one in 100 million!) and our odds of just losing dollar after dollar are so high. Still, I have to admire Stebbins based on the little I've read about the situation. He seemed to be handling it well: He took a $125 million lump-sum payout (preparing to fork over a big chunk of it in taxes), and, according to an Associated Press article, the couple "planned to use the money to buy a cow, pay off some bills and pay for a garage to house a 1963 Corvette." That's hardly extravagant stuff.
So far, so good. But the year after winning, Stebbins died of heart failure.
Splurging and denying
Thinking about his story made me dwell on how many of us live our lives either splurging or denying. Some of us frequently remind ourselves that life is short (and it certainly can be), and so we enjoy possessions and experiences as much as we can. We may not save and invest too much for tomorrow, though, because we're too busy enjoying today. There's some good in that, but also some danger. After all, sometimes life isn't short -- sometimes it's long. And you don't want to run out of money three-quarters of your way through it.
Meanwhile, others among us warn ourselves that life can be long. We drive old cars and pack bag lunches. We save and invest as much as we can for our future. We worry about not having enough money in our golden years. We put off that trip we've always wanted to go on, and we never get around to trying that fancy new restaurant. There's some good in this approach, too, but there will surely be a lot of regrets, as well.
The Stebbinses' story should remind us that life is unpredictable. We should save and invest for tomorrow, because darn few of us will win lottery jackpots. (Yes, Mr. Stebbins did win -- but only because scores of millions of people lost.) But we should also enjoy life along the way.
Add more balance to your life. Have your cake and eat it, too. Here are some suggestions:
If you've been saving every penny you could, perhaps dial that back a bit. For example, let's say you're socking away the maximum in your 401(k) and your IRA. If so, good for you! But let's also say you're denying your family an annual vacation so you can save and invest more. If so, perhaps look into changing that. You might opt to save just a little less, permitting a trip to the Grand Canyon or the Liberace Museum in Las Vegas (of course).
With a little creative thinking, you can add more enjoyment to your life without spending much more. For example, if you stay home most evenings watching TV because it's so expensive to have a night on the town, invite friends over to play games. A weekly game night can be great fun. (Visit www.funagain.com to discover lots of nifty new games.) Take the kids to the local museum on its free admission day. Perhaps volunteer with a friend. All these things can enrich your life while costing little.
If you find you're spending so much time studying stocks that you can't squeeze in sufficient time with your loved ones, consider shifting some of your nest egg into a few top-notch mutual funds. Lots of mutual funds offer compelling track records that beat the returns of lots of popular stocks. The Vanguard Global Equity (VHGEX) fund, for example, sports a five-year average annual return of more than 21%, and recently included Research In Motion
, Freeport-McMoRan (Nasdaq: RIMM) , and Cablevision (NYSE: FCX) among its top holdings. Yet its expense ratio (think annual fee) is a measly 0.3%. (NYSE: CVC)
So don't live at one extreme or the other. Don't think that by saving and investing, you have to forgo fun, or that by living it up, you won't be able to prepare for retirement.
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