Forgot to report on the financial advisor meeting. I am living on a piddling little way-below-poverty-level retirement check from The Company (and since they have cut our health benefits so drastically, I don't expect a COLA raise any time soon), an only slightly higher widow's benefit check from social security, and a moderately higher collection of stock dividend checks. With all three (and no cable, no fancy stuff, etc.), I am moderately comfortable. For a few years, anyway. (Note - I was surprised to find that last year, when I had only the retirement check and the investment income, I was well below the local "poverty level". But I don't have rent or a mortgage payment, so I guess that's why I didn't notice.)
But! The most secure is the social security checks - so you can imagine how insecure the remainder is. I don't at all trust The Company to even continue paying retirees. (Not that I think they'd stop - just that if they did stop, I wouldn't be surprised.) If the stock market tanks, I'll be in big trouble.
Almost all of my investments, accounting for 40% of my income, are in stock. Slightly over half of the (offline) portfolio is in various oil companies (which, incidentally, pay very good dividends). When you add in The Company, that accounts for about 2/3 of the investments in only two industries. I have been fully aware for the past few years that I am very exposed. I know that I should move some of it into bonds, or at the very least spread the stock out over several industries.
Therefore, the contacting of a financial advisor. First time ever.
I made it clear to him that:
1.) I will control my portfolio. I am asking only for advice, which I may or may not take.
2.) It is absolutely necessary that if I sell stock and buy bonds, I must maintain the same level of income, which may be difficult since the oil stocks I intend to sell also pay the highest dividends.
3.) Since bond investments don't grow, I will want to keep more than 50% in stock for growth, because as the cost of living goes up, that's about the only way I'll get a raise.
What came out of our meeting:
1.) I selected several stocks for potential sale (1/2 of this, 2/3 of that and that, all of that loser...), so we could get a dollar number to work with. He agreed with my choices.
3.) I decided that I did not want a bond fund.
2.) We decided that individual short term government agency bonds would be a better choice because if interest rates go up, as anticipated, I will be in position to move without sacrifice.
3.) Even at the lower short term rate, when we ran the numbers, the income was sufficient to replace the lost dividends (especially since I decided to sell all the communications stocks, which didn't pay dividends anyway).
4.) My personal online portfolio** was judged extremely aggressive, so with that and what will be left of the stodgy blue chip offline portfolio, there's plenty of growth potential. And since I don't depend on the online portfolio for income, I can stay aggressive there.
5.) After we get this all set up, he recommends that I see a lawyer about a trust (but I think not an unrevocable one!)
So, I'm satisfied. It'll be late August before I can move on it, but at least now I know where I want to go. That nagging worry in the back of my mind is lessened.
~~Silk
** Definition of "personal online portfolio": When I sold the Highland house in late 2002, I invested half the profits in an online brokerage account, put one quarter into a money market account where I can access it immediately (that's what I've been using to buy materials for my planned future hobby/business), and spent the remaining quarter on myself (the fox coat, jewelry, rugs, etc.). The online stock account has been doing very well. I haven't been churning - I research, buy, and let it sit. Over the past two and a half years, it has tripled. I've been buying more stock with the dividends from that fund, so it's at the point now where it feeds itself.
Moral: Invest every extra penny, folks. And you probably have more extra pennies than you think (do you really need that expensive bottled spring water, or the Starbucks frappe (Oh, wait, I have Starbucks stock - go ahead, give me your money!)) When Jay died, I was 57, and even without what I inherited from him, with only what I'd saved myself and a few minor adjustments to lifestyle, I would have been able to retire. Well, yeah, the life insurance helped to tip the scale. But still, good choices along the way can give you enormous flexibility later.
