Julie
and Robin Sharp's "brief and childless marriage" began to unravel when
she discovered he was "pursuing another relationship"
Julie Sharp is fighting the divorce settlement (Photo: NEV AYLING)
A city trader who made millions in "eye-watering" bonuses is fighting for a "fair" divorce settlement - after her ex walked away with nearly half the £7million fortune she earned.
Millionaire Julie Sharp was married to ex-husband Robin for four years after they set up home together in 2007.
When
they met, both were already earning around £100,000 - with Mr Sharp
working as an IT consultant and Mrs Sharp a successful energy trader.
But as the relationship took off she began to rake in massive bonuses due to the "soaring" energy market, Gloucester Live reported .
She amassed bonuses totalling £10.5million in just five years, London's Civil Appeal Court heard.
On
the strength of her "windfall", they bought two lavish country houses
in Gloucestershire - the second with a £2million price tag which cost
£500,000 to refurbish.
Mrs Sharp, now 44, took pleasure in giving her partner expensive presents - including a top-of-the-range Aston Martin.
But despite her sudden wealth she was adamant that her husband "didn't see her as a sort of cash machine". Divorcee dragged screaming from court after hearing she might lose home to ex-husband 10 years AFTER they split
In
September 2013, Mrs Sharp learnt that her husband "had been pursuing a
new relationship for some time", her QC Frank Feehan, explained.
Their "brief and childless marriage" began to unravel - with Mrs Sharp petitioning for divorce in December 2013.
Their
rows over money were hammered out before High Court judge, Sir Peter
Singer, who in November 2015 allocated Mr Sharp £2,737,000 in a "clean
break" award.
The couple's total assets amounted to around £6.9million - with virtually all the wealth stemming from the wife.
Mrs
Sharp, a mathematics graduate from a "modest financial background" who
worked diligently to carve out her high-flying career, is now appealing
that ruling.
Mr Feehan criticised the judge's approach as
"intrinsically unfair" in light of the brevity of the marriage, lack of
children, and her massive financial contribution.
Despite her
stellar earnings, the judge approached the case on the basis of a 50/50
split, although he reduced Mr Sharp's payout to reflect "unmingled"
assets that his wife built up before the marriage.
"The notion
that equal sharing applied in this case made for an unprincipled
decision," Mr Feehan told three Appeal Court judges.
Mrs Sharp had proposed that her ex should walk away with £1,197,000, which would more than cover his needs, he added.
Throughout
their time together the couple maintained largely separate finances, he
added, "earning and spending their own money".
They took turns
to pick up the bill when dining out and, during the marriage, Mr Sharp
himself accepted the "bonuses were not his".
He "went out of his
way to explain that he did not see her as a sort of cash machine on
whose financial resources he would have a call", said Mr Feehan.
And although Mrs Sharp had shelled out on "expensive gifts" for her spouse this did not reflect "shared finances", said the QC.
Robin Sharp was awarded nearly half of his wife's fortune (Photo: Richard Gittins / Champion News) One of her gifts was an Aston Martin, but Mr Feehan termed
this a "very lavish 'boy's toy' which she was happy to give out of
love".
It was her wealth which enabled the couple to buy their
two luxury homes, the court heard - the first of which was acquired by
her before they wed.
However, Mr Sharp, aged 43, insists he made a
major contribution by project managing and carrying out renovation
works on their two properties - particularly after he took redundancy in
2012.
That was after Mrs Sharp bought their second home - in
Shurdington, near Cheltenham, a sprawling six-bedroom manor house with
two acres attached.
Mr Sharp's QC, Jonathan Southgate, said he
deserved half of the marital pot and there was ample evidence of the
couple's intentions to pool their resources.
Even though Mrs
Sharp had not paid her bonuses into a joint account this was common in
many "traditional" marriages where the breadwinner retains earnings and
"pays housekeeping to the other spouse", he argued.
Mr Sharp was
clear in his evidence that "they agreed he should take redundancy and
stay at home - redeveloping their home and supporting their joint life
together".
The couple originally met while Mrs Sharp was working as a coal industry specialist in Swindon, the Appeal Court heard.
She was earning £135,000 yearly, before bonuses, while her spouse, who at one time worked for Cisco, brought in £90,000.
There was no real "intermingling" of their cash during the
marriage, claimed Mr Feehan, although Mrs Sharp had paid large cash
instalments to her ex during 2013 towards home improvements.
"The documentary evidence is plain," argued the QC. "There was never a joint approach to funds in this marriage.
"The oral evidence is also plain: the husband accepted clearly that such was the way they lived their life together."
Mr Southgate, however, backed the High Court judge's handling of the case.
"The
judge found that the evidence did not support her case that there was a
deliberate and agreed intention to maintain separate finances," he told
the court.
Overall, the judge's ruling was in line with "the usual sharing approach to divorce", the QC argued.
And there were no compelling reasons to "depart from that approach".
Lords Justice McFarlane, McCombe and David Richards have now reserved their decision on Mrs Sharp's appeal.
The Government this week paved the way for firms to slash the pension payouts of 11 million workers
BP chief Bob Dudley gained a £4.4m perk (Photo: PA
Fatcat bosses are raking in massive pensions perks while millions of workers are facing hardship in old age, a Daily Mirror investigation has revealed.
The Government this week paved the way for firms to slash the pension payouts of 11 million workers.
Yet companies are pouring a packet into directors’ retirement funds.
Research by the Mirror and shareholder group Manifest found that the average FTSE 100 chief executive gets the equivalent of 30% of their salary in pension payments annually.
But firms put an average 6% of a shopfloor worker’s salary into their pension. That produces a paltry £1,300 a year, on average.
Antonio Horta Osorio has a 50% pension perk (Photo: Getty)
Primark boss George Weston got a 68% boost By contrast, George Weston, boss of Primark owner
Associated British Foods, may well pocket £550,000 a year when he
retires. He had £711,000 put into his pension pot in 2015.
Associated British Foods called his pension “a mathematical outcome of longevity of service, age and salary”.
BP’s
Bob Dudley had £4.4million pumped into his pension that year – more
than three times his salary. BP said the payment was distorted by the
fact that it was a US scheme.
Alison Cooper received £590,000 (Photo: PA)
Erik Engstrom is given 67% for his pension Business information firm RELX put £766,000 into chief
executive Erik Engstrom’s pension in 2015, while Alison Cooper, who runs
tobacco giant Imperial Brands, got a £590,000 boost. Taxpayer-saved
bank Lloyds put £568,000 into Antonio Horta-Osorio’s retirement pot last
year.
Tom McPhail, head of retirement policy at broker
Hargreaves Lansdown, said: “The system is grossly unfair. There is one
rule for senior executives and one for everyone else.”
Earlier
this week, a Government Green Paper proposed that troubled firms with
defined benefit schemes could “cut or renegotiate” their pensioners’
benefits, potentially affecting 11 million people.
Retirement
may seem like a long time from now, but it’s closer than you think.
Don’t keep putting off your plans to get your finances in order. A survey
conducted by the Employment Benefit Research Institute found that
American workers are falling behind when it comes to preparing for
retirement. You can start the planning process by taking an inventory of
your financial situation. Here are some important questions you must
answer before you retire.
1. Do you really have enough money to retire?
Retirement savings | iStock.com
Guessing won’t cut it when it comes to figuring out how much money
you’ll need to live comfortably in retirement. It’s not a good idea to
leave this part of retirement planning to chance, because it can be
difficult to catch up once you realize you’re off track. Among the
Americans surveyed in the Employment Benefit Research Institute study
who said they are not saving enough, 20% said they plan to save more
later, while 15% said they will have to work during retirement, and 14%
said they have no choice but to delay retirement. Not knowing how much
you need to retire means you’re not going to be saving enough in the
meantime. If you don’t know the answer to this question, there are
plenty of retirement tools available to help you figure this out. One tool recommended by the experts is the T. Rowe Price retirement income calculator.
If you come to the conclusion that you are indeed behind on
retirement savings, you can still maximize contributions each year. For
2016, you’re allowed to contribute a maximum of $18,000 to a 401(k). If
you’re age 50 or older you can make an additional catch-up contribution of $6,000.
2. How much debt do you have?
Debt | iStock.com
Take a moment to tally up all of your outstanding debt. Expenses such as high-interest credit cards
and a mortgage will deplete your retirement income. Once you know how
much you owe, make an effort to pay down as much of your debt as
possible before you finally hang up your work hat. It will be tough to
pay off debt once you’re retired and living on a fixed income, so take
care of repayment sooner rather than later.
You may be feeling good and healthy as ever right now, but your
chances of needing long-term care increase with age. Those turning 65
years old today have a 70% chance of needing some type of long-term
care, according to LongTermCare.gov. In addition, roughly 20% of today’s
65-year-olds will need long-term care for more than five years. In
light of these statistics, it would be in your best interest to have long-term care insurance.
4. When should you apply for social security?
Social security card | iStock.com
It depends. Experts are divided about whether you should delay Social
Security until you reach age 70. Those who say it’s a good move reason
that waiting will allow you to collect a higher monthly benefit. Whether
you choose to follow this advice depends on your individual situation.
Some experts say if money is tight once you finally retire, you might
want to apply for benefits sooner (age 62 is the earliest you can
collect Social Security benefits) rather than later. Other experts say
if you can afford to wait, and you’re in relatively good health, you may
want to wait it out until age 70.
Waiting until your full retirement age (age 67 if you were born in
1960 or later) to take Social Security benefits will yield a benefit
amount that’s roughly 30% higher than if you take benefits at 62.
Waiting until 70 results in a benefit that’s roughly another 32% higher.
On the other hand, if you’re not in such great health and you need the
money, by all means apply for your benefits when you’re eligible.
5. Where will you live?
House | iStock.com
You’ll need to move to a place where you can stretch your retirement
dollars. Retirement life will likely mean lower income and possibly
higher health care costs. Do your research or you’ll end up blowing
through your nest egg too quickly. Besides cost of living, you’ll also
need to consider weather and convenience. As you age, driving may not be
a possibility, so make sure to find a residence that will offer
adequate mobility. While doing your research, you’ll want to make sure
to stay away from these 10 worst retirement cities. Consider these 10 best places to retire instead.
6. What will your retirement expenses be?
Money and piggy bank | iStock.com
Account for expenses such as the retirement lifestyle you would like
to have as well as the cost of medical care. Remember that if you’re in
poor health now, you will most likely spend a pretty penny during your
golden years when it comes to health care costs. If you want to get a
better picture of your future expenses, start by filling out a
retirement expense worksheet like the one featured here on the Vanguard website.
7. Have you thought about your social life?
friends enjoying a meal | iStock.com/monkeybusinessimages
This may seem trivial, but once you stop working you’ll have contact
with fewer people. If most of your friends and former co-workers are
still working, they may have less time for you. They also may be more
focused on work, so there may be fewer experiences to share. Make sure
you’ve prepared for your social life after retirement. You can do this
by planning to connect with a local senior center or volunteering within
your community. Just make sure you plan to get out and socialize. A study
by the Institute of Economic Affairs found that retirement can increase
your clinical depression risk by 40%. This is because many workers
closely link their identity and sense of purpose to their jobs.
Financial problems
have a way of sneaking up on you. At first you may start borrowing
money to make a purchase or using your credit cards a little too often.
Before you know it, you’re facing a mountain of debt. You may be content
with denying you have a problem with managing money. However, burying
your head in the sand will catch up to you if you don’t take the proper
steps get things under control. Here are a few signs you’re headed for
financial disaster.
1. You often borrow money from friends and relatives
Money | Thinkstock
Many of us run into a financial snag from time to time, but if you find yourself constantly asking your friends and family for a loan,
and you have trouble paying them back — or at all — this is a warning
sign. In addition, borrowing money from loved ones and repaying late or
not returning the money can lead to even more strain in your personal
life.
2. Bill collectors are calling you — and it’s not to say hi
Phone call | Justin Sullivan/Getty Images
Ignoring your bills won’t make them go away. You may feel a temporary
sense of comfort and relief when you toss your bills into a pile on
your desk, but that won’t resolve the issue. Your money problems will
just continue to worsen. Soon enough, your creditors may come looking for you.
3. You rely heavily on credit
Using credit card | iStock.com
If you often reach for your credit card,
even for small purchases, this is an indication that you are spending
more than you earn. Relying too heavily on credit and maintaining a
balance from month to month can cause your debt to balloon, leading to
even more financial strain. When you get to a point where you can’t
afford basics like groceries or gas, it’s time to reevaluate your
budget.
4. You’re living paycheck to paycheck
Burning money | iStock.com
If you find that you frequently overdraft and you’re just barely
making it from one paycheck to the next, you are living on the financial
edge. Burning through your cash faster than you earn it is asking for
trouble. All it takes is one major financial emergency to put you in a
crisis. The key is not to wait until a crisis hits before taking action.
Once you start to see that you’re experiencing financial difficulty,
begin looking for ways to either spend less or bring in more money.
5. You tell financial lies
Lying about money | iStock.com
Are you making purchases and lying to your partner about it? Are
you gambling your paycheck away or excessively shopping? If you have
lost control of your spending and you’re going to great lengths to
conceal your behavior, this could put you at risk for serious financial
trouble down the road. Furthermore, taking a reckless approach to money
could point to some areas that need to be addressed concerning your
mental health. Meeting with a therapist may help you figure out if you have a deeper problem that requires exploration.
Warren Buffett
is no stranger to multibillion-dollar investments. The Oracle of Omaha
has been beating the market for decades while accumulating positions in
some of the world’s most popular companies. Courtesy of a new filing, we now have a peek at how the legendary investor deployed capital in the final three months before 2017.
Many institutional investment managers recently filed their mandatory
13F with the Securities & Exchange Commission (SEC). The filing is a
quarterly report of equity holdings required by managers who oversee
more than $100 million in qualifying assets and must be filed within 45
days of the end of each quarter. The 13F provides a glance at what firms
did in the previous quarter, but investors should keep in mind that
hedging and trading strategies of each fund are still unknown.
Buffett’s Berkshire Hathaway made several big changes in the three
months ended December 31, 2016. In fact, this was one of the most
exciting 13F releases from Buffett and company in recent history.
Buffett also recently disclosed that Berkshire Hathaway purchased a net $12 billion in stock since the presidential election.
The conglomerate sold off its stakes in Deere and Kinder Morgan, two
positions that had already been reduced in a prior 13F release.
Berkshire Hathaway decreased its stakes in Verizon and Wal-Mart, but
opened new positions in Monsanto, Siri XM, and Southwest Airlines.
The largest investments in Berkshire Hathaway’s portfolio include
some of the most popular blue chips known to Wall Street. Let’s take a
look at Berkshire Hathaway’s top nine holdings according to dollar value
at the end of December, not including Buffett’s option to purchase 700
million shares of Bank of America at any time prior to September 2021
for $5 billion. No. 7 is new to our Cheat Sheet list of Buffett’s
biggest holdings, but it’s one of the most loved companies in the world.
9. Delta Air Lines
DAL stock price | StockCharts.com
A few years ago, Buffett called airlines a “death trap for
investors.” Times have changed. Buffett hasn’t said exactly why he likes
airline companies so much now, but the evidence is clear, he’s bullish
on the industry. At the end of the fourth quarter, Berkshire Hathaway
held about 60 million shares of Delta, worth $3 billion, and
significantly greater than the 6.3 million shares held in the prior
quarter. Investors should also keep in mind that Berkshire Hathaway
opened a new position in Southwest Airlines, and increased its stakes in
American Airlines and United Continental during the fourth quarter.
8. U.S. Bancorp
USB stock price | StockCharts.com
The financial industry is no stranger to Buffett. Berkshire Hathaway
held 85.1 million shares of U.S. Bancorp at the end of the fourth
quarter, worth $4.4 billion. The position is unchanged from the prior
quarter, but a recent rally in share price continues to keep U.S.
Bancorp as one of Berkshire Hathaway’s largest holdings.
U.S. Bancorp is based in Minneapolis and has nearly half a trillion
dollars in assets. It’s the parent company of U.S. Bank National
Association, the fifth largest commercial bank in the United States. The
Company operates 3,106 banking offices in 25 states and 4,842 ATMs. In
October, MONEY named U.S. Bank the Best Big Bank in a tie with TD Bank.
7. Apple
AAPL stock price | StockCharts.com
The beloved Apple is on our Buffett Cheat Sheet list for the first
time. Berkshire Hathaway more than tripled its prior stake and now owns
57.4 million shares of the tech giant, worth $6.6 billion, as of the end
of 2016.
Despite concerns about growth, Apple doesn’t appear to be slowing
down. The company sold 78 million iPhones in the holiday quarter,
setting a new record. Apple also set new revenue records for the iPhone,
Services, Mac, and Apple Watch. Furthermore, Apple’s cash hoard of $246
billion will likely continue to reward investors with dividends and
share buybacks for years to come. Apple returned $15 billion to
investors in the fourth quarter alone.
6. Phillips 66
PSX stock price | StockCharts.com
The multinational American energy company was originally thought to
be sold off by Buffett in the second quarter of 2015. As it turns out,
Buffett had the stake classified as confidential so it wouldn’t show on
the 13F and allow copycat investors to run the price up. At the end of
December, Berkshire Hathaway held 80.7 million shares (worth $7
billion), unchanged the previous quarter, according to the 13F. Phillips
66 is Berkshire Hathaway’s No. 6 largest holding, and appears to be a
favorite, especially when its share price dips toward $75.
Unlike oil giants Exxon Mobil and Chevron, Phillips 66 has escaped most of the carnage seen in the energy sector. Buffett told CNBC in 2015: “We’re buying it because we like the company and we like the management very much.”
5. American Express
AXP stock price | StockCharts.com
Warren Buffett has liked American Express since at least the 1960s.
Today, the credit card giant is Berkshire Hathaway’s No. 5 largest
holding. At the end of the fourth quarter, Berkshire Hathaway held 151.6
million shares (worth $11.2 billion), unchanged from the prior quarter.
American Express shares have struggled in recent years. Costco
severed ties from American Express after 16 years in business with each
other. American Express was able to make a deal with Sam’s Club, but it
did little to comfort Mr. Market at the time. However, shares found a
bottom in early 2016 after touching $50, and are in the green this year.
Berkshire Hathaway’s positions in Mastercard and Visa come nowhere
close to the size of its American Express position.
4. International Business Machines
IBM stock price | StockCharts.com
If you’re looking for a reason not to follow in Buffett’s footsteps,
IBM used to be it. The company was the worst performer in the Dow Jones
Industrial Average in 2014, and one of the worst performers in 2015. In
fact, IBM’s revenue has fallen for 19 consecutive quarters. Nonetheless,
Buffett isn’t giving up and you might not want to either. IBM’s stock
price has surged from $115 to $180 over the past year, providing yet
another example why thinking about the long-term may help you avoid
making bad investing decisions.
IBM is Berkshire Hathaway’s No. 4 largest holding. At the end of the
fourth quarter, the company held 81.2 million shares (worth $13.5
billion). IBM shares still offer a dividend north of 3%.
3. Coca-Cola
KO stock price | StockCharts.com
Coca-Cola is the most predictable position at Berkshire Hathaway.
Buffett is on record saying he will never sell his shares in the
world-renowned beverage company, and can often be seen holding a Cherry
Coke. At the end of the fourth quarter, Berkshire Hathaway held the
usual 400 million shares of Coca-Cola (worth $16.6 billion), making it
the company’s No. 3 largest holding.
While sugar water has seen its fair share of problems in recent
years, Coca-Cola shares have been experiencing support near $40 since
late 2015. Coca-Cola has investments in Monster Beverage, Keurig Green
Mountain, and Suja Juice. The company is also making operating changes
to drive stronger growth and save $3 billion annually by 2019.
2. Wells Fargo
WFC stock price | StockCharts.com
America’s second most profitable bank is also Buffett’s No. 2 largest
holding. Berkshire Hathaway held 479.7 million shares (worth $26.4
billion) of Wells Fargo at the end of the fourth quarter. Somewhat
surprisingly, this was once again unchanged from the prior quarter.
Wells Fargo quickly become Buffett’s most controversial holding in
September. The mega bank finally admitted it created roughly 2 million
fake accounts, which inflated sales numbers and banking fees. Wells
Fargo had an incentive program in place that essentially forced
employees to commit fraud or risk being fired for underperforming
unrealistic sales goals. More than 5,000 workers related to the scandal
were fired. Wells Fargo CEO John Stumpf also resigned in the wake of the
financial abuse. Buffett appears to be standing by Wells Fargo for now.
1. Kraft Heinz
KHC stock price | StockCharts.com
Berkshire Hathaway’s position in the merged Kraft Heinz has been
listed on the 13F for the past six quarters. Buffett teamed up with
investment firm 3G Capital to takeover Kraft Foods with Heinz. The deal
created one of the biggest food companies in history, with over 10
different brands valued at more than $500 million each. More recently,
the company has laid off thousands
of workers to cut costs and “consolidate manufacturing across the Kraft
Heinz North American network.” In August, Kraft Heinz raised its
quarterly dividend 4.3% to $0.60 per share.
Buffett and company held 325.6 million shares of Kraft Heinz at the
end of December, worth a whopping $28.4 billion. That makes it Buffett’s
largest portfolio holding. Disclosure: Author holds BRKB and AAPL
Too much debt can ruin your life. You may not be able to get a
mortgage for a house, you might face never-ending credit card payments,
and you might even face court action if you can’t pay your bills. Even a
small amount of debt can bring on obnoxious collector calls and make it
difficult to build your credit. If you have wanted to eliminate or cut
your debt, and you’ve tried, but you can never seem to really get your
debt in control, then something might be in your way. Some people find
that it is difficult to cut debt on a limited budget,
but it is possible to do so with careful planning and smart lifestyle
changes. In addition, if you’re currently overspending, using credit
cards too often, or not keeping a budget, all of these choices can make
it difficult to get out of debt.
1. You don’t keep a budget
Keeping a budget is essential in order to become financially stable,
and to eventually get out of debt. Even if you regularly pay your loan
payments, you won’t be able to pay much extra, or even pay every month,
if you don’t keep track of your spending and stay in budget. Without
regular budgeting updates, you won’t know how much you are spending, or
how much extra you have. This will make it difficult to prioritize
cutting down your debt, because if you are overspending each month, you
will risk going even further into debt.
A Gallup poll found that only one in three
Americans keeps a detailed household budget each month. If you are part
of this group, and you want to get out of debt, then maintaining your
budget is a great place to start.
2. You don’t set financial goals
Person Hand Inserting Coin In Pink Piggybank | iStock.com/AndreyPopov
Setting financial goals specifically about your debt will help you
have a date in mind to pay off your debt. If you owe a lot of money, it
can feel like you will never pay it off. However, setting a specific
goal will allow you to plan for how much you need to pay off each month
in order to meet your goal. In addition, knowing a due date will help
you visualize the debt disappearing, which can help motivate you to keep
up with your payments.
According to a poll by CreditCards.com, 18% of those polled who were already in debt expected to still have loans when they died. Thinking like this will certainly not help you pay off your debt, but setting financial goals can.
3. You rely too heavily on credit cards
Credit card user | iStock.com
Credit cards can be helpful and even necessary, but they can also be
dangerous. Because of the high interest rates, using credit cards too
much (especially if you can’t immediately pay the minimum balance) can
truly destroy your budget, and leave you in a long-term debt cycle. The average credit card debt
includes $1,128 per card that doesn’t carry a balance, $1,164 per
account for U.S. adults with a credit report and a Social Security
number, $3,766 per person for U.S. resident adults, and $5,540 per U.S.
adult with a credit card.
If the majority of your debt is from credit cards, or you rely too heavily on credit cards, you can reduce your debt
by negotiating lower rates, tracking your progress, paying with cash,
and implementing other ideas such as those mentioned in this article
(like using a budget and making goals).
4. Your priorities are all wrong
Luxury yacht | iStock.com
It’s nice to have a big house and a fancy car, but if you can’t
afford to do so then taking out loans that you can’t afford is a bad
idea. If you purchase more house than you can buy, or you buy a car that
leads to an expensive monthly payment, it can be difficult to stay on
budget and reduce debt. If you are worried about keeping up with your
friends by buying fancy suits or shoes, or eating out all the time, you
will also find it difficult to eliminate your debt.
The good thing is that you can always change your spending habits. If
you’re willing to downgrade your house or your car, and you can stop
impulse or peer spending, you can get your finances back on track and
cut your debt. Too much debt can be hard to live with, but there are
ways to pay your debt down and still have the things you need (and even
some that you want). Doing so requires keeping a budget, changing your
spending habits, and making and keeping financial goals.
Americans today are pretty awful at saving money. Since 25% of Americans
said they would give up showers in order to save money, systemic issues
like income inequality are likely more to blame than individual habits.
But don’t let that be your excuse. Even when you are near-broke, you
can still find ways to save here and there. You can cut out unnecessary expenses, eat your meals at home, and make a strict budget and stick to it.
Are you getting bored yet?
It seems that for some people, no matter how many articles they read,
no matter how many advisers they meet with, today’s wants simply
outweigh tomorrow’s needs. That’s not to say there aren’t people who
have money troubles for no fault of their own. But if your steady income
is accompanied by a history of poor money management, unpaid debts, and bad financial choices in general, chances are good that you’re just a terrible saver.
To help you understand why you can’t seem to put any of your paycheck
aside, we’ve outlined some of the reasons people are so inept at
saving. If you can understand where you’ve gone wrong, it will help you
finally turn things around. Here are the major missteps of the
savings-challenged.
1. You keep upgrading your lifestyle
Fancy ride to the poor house | Aston Martin
When you get a tax refund or a bonus at work, is your first thought
to go out and splurge on a luxury? Impulse buying is one of the most
dangerous habits consumers can develop, and it can be made even easier
by sudden windfalls. This is how people get into the dangerous cycle of
unnecessarily living paycheck to paycheck. What happens is you justify
each purchase by telling yourself you still have money “left over.” You
might think of increased wealth as a chance to seek status symbols or
lifestyle upgrades. Instead, use your newly acquired wealth to break
free from old habits. If you resist the temptation to spend your entire
paycheck, you’ll find that a little security will give you much more
freedom than a lifestyle upgrade.
2. You procrastinate
Sleeping instead of taking action | iStock
There’s a reason why “pay yourself first,” is a golden rule of personal finance. It’s
because if people don’t set aside money right away, most won’t do it at
all. The general idea is this: Take a certain percentage of your
paycheck and allocate it to savings, and the remainder is what you’ll be
left with to use for bills and other expenses. Bad savers are often
procrastinators, so they continuously tell themselves they’ll save
later. To take the pressure off, these kinds of consumers can benefit
from setting up automatic withdrawals each month. This gives you no
choice but to save, so you can stop making excuses to put it off again
and again.
3. You think saving is lame
Shopping won’t solve your money problems | iStock.com
Bad savers sometimes claim they like to “live in the now,” rather
than prepare for the future. Do you ever feel like you are stuck in the
present? It’s often a lot less glamorous and exciting than it sounds.
You can’t have much fun living in the present moment if your present
always feels like you are running out of money. Savers are actually
better equipped to take the occasional spontaneous trip or adventure
because they don’t have to wait for their next paycheck every time they
want to do something fun. Instead of focusing on what you want in the
here and now, and being disappointed when you can’t afford it, start
thinking about what you really want. If you can see past your immediate
desires, your bigger goals will start to motivate you. Then you’ll see
that saving isn’t a chore at all, it’s your ticket to financial freedom.
A divorce and marriage counseling session in Old School | Source: Dreamworks
Maintaining a long, healthy relationship is
one of the biggest challenges people face in life. There are so many
factors that can affect the status of a marriage or relationship and so
many things that are simply out of a couple’s control that divorce has
become rather common. Though divorce rates have been slowing down over the past several years, people are still doing what they can to avoid it — be it marrying the right person, waiting until the right age, or deferring until financial security is solidified.
All of those things may help you avoid a divorce, but we now have
even more insight into what can make an otherwise strong union fracture.
And it has more to do with the economy than with Tinder profiles,
Facebook flirting, or too much time at the bar or in front of the Xbox.
According to a study published in American Sociological Review,
the biggest factor leading to divorce is the husband’s job status.
Harvard researcher Alexandra Killewald crunched the numbers and found
that men who didn’t have jobs, or who had been out of work for a long
time had a statistically higher chance of getting divorced in any given
year, compared to those with stable careers.
Many couples fight about money, and that is often a leading factor in
divorce proceedings. But this study goes a little deeper and adds
another layer of complexity to those financial issues. Per Killewald’s
study, men without jobs increase their odds of divorce by roughly 30%.
Divorce and employment status
Unemployed businessman | Source: iStock
The research looks at data dating back 46 years to the 1970s and
found that for men who were not employed full-time, there was a 3.3%
chance they would get divorced in any given year. Compare that to men
who did have a full-time job during the same time period, and the
chances dropped to 2.5%. That’s what was found from looking at more than
6,300 couples.
“For marriages formed after 1975, husbands’ lack of full-time
employment is associated with higher risk of divorce, but neither wives’
full-time employment nor wives’ share of household labor is associated
with divorce risk,” the study says. “Expectations of wives’ homemaking
may have eroded, but the husband breadwinner norm persists.”
Those are a couple of other interesting details that the study
unearthed — that the full-time job status of the wife and the division
of household labor didn’t have a significant impact on divorce risk.
Instead, the real difference had to do with the husband’s job status.
“It is possible that husbands’ less than fulltime employment is
associated with marital disruption more strongly than wives’, not
because of gendered interpretations of lack of full-time employment, but
because husbands’ part-time employment or nonemployment is more likely
to be involuntary,” the study says. “Involuntary nonemployment may
negatively affect marriages more strongly than voluntary nonemployment.”
In other words, it’s not just being out of work; it’s being fired or laid off, and not being able to find a job.
Dodging divorce
Wedding rings | iStock
There are limitations to the study, as Killewald points out. It
didn’t include same-sex couples (marriage data hasn’t existed for very
long), and it didn’t include men who chose to become stay-at-home dads,
and let their wives be the household breadwinner. Read through the study
to get a full picture of Killewald’s other concerns. There is also evidence out there
that division of labor in the household and a wife’s employment status
can play a bigger part in divorce than this study claims.
But what you really need to know is that there was a clear correlation with employment status and divorce rates.
What does this mean for you and your relationship? It might not mean
anything — each and every marriage and relationship is different. But
we’ve known for a long time that many marriages fail due to financial
problems, and the employment status of the husband clearly plays into
that.
And perhaps most importantly, there are innumerable other factors
that can lead to divorce that aren’t necessarily taken into account by
this study. Cultural differences, religion, children — a marriage can be
wrecked by any number of things, not merely the fact that someone loses
their job. But a connection exists, according to Killewald’s work, and
if you want to stay out of divorce court, you should first try to stay
out of the unemployment office.
Planning for retirement is a smart thing to do. However, it’s not always the most enjoyable activity. Reaching your retirement savings goal requires some sacrifice now so that you can enjoy life later. Even though getting ready for your golden years
means you’ll have to give up some things today, you’ll thank yourself
in a few years. However, not everyone thinks this way. Less than half of
workers in the United States (48%) said they and/or their spouse have
never attempted to calculate how much money they’ll need so they can
live comfortably during retirement, according to an Employee Benefit Research Institute survey.
Instead of focusing on the results, some people make excuses for why
they can’t save for retirement. Here are five of the lamest retirement
excuses people tell themselves.
1. I’ll work until I die
iZombie | The CW
If you reason that you can just put off retirement savings
because you plan to work until you die at your desk, you might want to
rethink that plan. The odds of being physically unable to work at some
point in your life are higher that you might expect. Roughly 1 in 4 of today’s 20-year-olds will become disabled before they have a chance to retire, according to the U.S. Social Security Administration. Sadly, many millennials say they expect to work until they draw their last breath. A survey
of adults aged 20 to 34 conducted by Manpower Group found that about
20% of millennials believe they will have to work until their dying day.
2. I need to save for my kids’ college education
College fund | iStock.com
Your kids can get a scholarship for college. You, on the other hand,
can’t get a scholarship for retirement. In addition, your child can
choose a less expensive option for school or take on a side job.
Transfer some of the responsibility for college financing to your
children. It will teach them a bit of responsibility. The best gift you
can give your children is to not be a burden on them when you’re older.
In this situation it’s best to put yourself ahead of the kids. Don’t
feel guilty, they’ll appreciate it later. Financial adviser Pedro Silva says many people put other major expenses before retirement and never get around to saving for the future.
People often cite car payments, child care expenses,
credit card, or college debt as primary concerns and retirement saving
as something to be done later. There is no way to make up for lost years
of retirement savings, and those who can afford to save the additional
amount later often take on too much risk to make up for the time lost.
We often picture our lives in the future as being different; we will
exercise, we will eat better, spend more time with our families, clean
out the basement, etc. The truth is the changes you wish to make have to
start today. Make a to-do list and write “call HR to start 401(K). Once
that is done, move on to the next item, realizing you are in control
and making choices to shape your future in the direction you want to go.
3. I’ll save when I make more money
Paying bills | iStock.com
Time is quickly ticking away. If you wait until you make more money,
you might be waiting for a very long time. Raises and promotions aren’t
guaranteed (neither is your job), so you might as well go ahead and
start socking away some cash now. The longer you wait to save, the less
time your money has to grow, so it’s wise to start saving as soon as
possible. If you delay saving for retirement until you’re 35 years old,
you’ll need to save more than 16% of your income
each year just to produce the same potential retirement income at the
age of 65 as a worker who started saving 10% of their income starting at
30 years old, according to the Insured Retirement Institute. If you
decide to wait until 40 years old, you would have to save more than 26%
of your income.
4. I can’t afford to save for retirement
Money in a wallet | iStock.com
Saving for retirement means you’ll have to give up some comforts right now, but you really can’t afford not
to save for retirement. If your finances are tight, work on developing a
budget so that you can make room for retirement savings. Your future
survival could depend on it.
Howard Dvorkin, CPA and Chairman of Debt.com said the people who
claim to not be able to afford retirement are usually the ones who are
wearing most of their money in the form of expensive purchases:
The lamest excuses I always hear are the unsaid ones. I
meet someone who tells me they simply can’t afford to save for
retirement, as they look at their Omega wristwatch and climb into their
leased BMW so they can pack for their vacation to the Bahamas. Yes, many
Americans are struggling and simply have trouble making ends meet, and I
respect and work with them. But I meet many other Americans who earn
quite enough to meet all their obligations – but they spend frivolously
without ever admitting it to themselves.
5. I don’t know how much to save
Thinking young woman looking up at many question marks | iStock.com/SIphotography
There are plenty of retirement tools available that can help you figure out how much cash to put away.
This is one of the worst excuses for not building your nest egg. These
tools allow you to create a retirement budget, figure out life insurance
needs, estimate retirement income, and more. As a general rule of
thumb, you should aim to have at least one times your salary saved by
age 30, three times by age 40, seven times by age 55 and 10 times your
salary by the time you reach 67 years of age, according to Fidelity.
Governor Godwin Obaseki of Edo State yesterday signed the 2017 appropriation Bill into law. The
governor who also signed the Pension Bill into law, said he would
organise the implementation of the Contributory Pension Scheme. Governor
Obaseki who commended the legislators for the ‘speedy’ passage of the
budget, said, “Last year when I presented this bill to you for
consideration, we were very clear that there were certain key principles
and budget policies, which we showed would lead to significant changes
in our economy. This early passage will help the process.” On
the pension bill, he said the state government had already commenced
implementation of the Contributory Pension Scheme since January and that
with the signing of the Pension Bill, what was left was to start
settling arrears.
