Little Chickens – Part Deux

Another day in The Park.   i’m drinking.  Just a little… Ok.  Perhaps a little bit more than a little…

Time for Momma’s check up with her smokin’ hot sex kitten of a cardiologist today – which went very well!  The painfully gorgeous Dr. M pronounced Mom heart-healthy, and as always, took time to chat with her, tell her how beautiful she looked, and generally fussed over her*.   All’s well in Cardio-Town!

Then it was off to the bank to rock the markets.  Last week, Mom mentioned that her “investment fund”-based retirement account was performing terribly, and that the balance had dropped from $90K in 2005 to about $60K this week.  She’s been losing sleep over this, and given dire predictions about the continuing recession, she wanted to move it all out and put it in lower risk certificates of deposit (CDs).

i advised her that it might make sense to let it ride – that we were either at, or approaching, bottom and that with a couple years patience, it would possibly recover.  That, and the fact that there is nowhere else to put it to grow, the best she could hope for was to cut her losses.  She went to the bank in November, intending to cut losses on this account.  At that time the value was around $77K.  She was angry with the financial advisers who talked her into letting it ride as the market continued to plummet.  When i suggested that given two years, it would likely stabilize Mom – now 80 years old – reminded me that she might not have a couple years…

She informed me that she’d spoken with my sister, T – the business professor – earlier in the week, and that T had advised her to pull her money from all investment funds.  Not only that, but to hide at least a years worth of cash in her mattress.  T, of course, has solid connectivity to several economics professors, and their predictions were apparently dire.  Seemed like pretty grim advice** to me… and it surprised me that T would take such a position.  But she’s the one in the know…

Against intuition, i steeled myself to do battle with these financial bullies.  She wants to cut her losses and rest easier.  My job was to let them know that by giving her shit advice, the poor woman was losing sleep, and it was affecting her health… i even considered smudging some mascara under her eyes to enhance the impact.  Momma wanted her money out of the market.  She was counting on me to get it done…

We went through a similar panic drill last summer.  Mom was reassured about her investments – which were fully insured by the FDIC should the banks go tits up.  She’s repeatedly told me that she’s counting on me to provide financial advice, since i’m the only functional member of the family i have durable power of attorney.  But it seemed that all she really wanted today was back-up – her mind was made up.

We arrived at the bank.  My brain cells began to escape my skull via my earholes within 10 minutes… 

The first revelation from the finance manager?  Mom has withdrawn cash from this account for 3 years.  Almost $20K in equal quarterly disbursements.  Momma kinda failed to mention this… She’d been using this retirement account – which was set up as her long term nest egg – to augment her pension and pay her monthly bills.  That’s fine, but it certainly affects the “loss math” just a touch.  She’d only lost about $10K over 3 years.  Not great, but i have friends who can blow that much in a single night at the black jack tables and booby-bars in Vegas.

My second surprise?  The financial manager asked why she was liquidating her “long term” IRA, while leaving her low-interest money market CASH account untouched.  The one with an assload of money in it.  Earning perhaps 1% interest.  Which i had never heard about until today.  He also mentioned the large sum in mid-term certificate of deposits…

daisyfae:  Momma?  i didn’t know about these accounts… Ummm…that sort of changes the situation a bit.

Mom:  Well, i don’t want anyone knowing where all my money is… You can’t really trust anyone these days.

daisyfae: [steam slowly escaping from ears and nostrils, with lip firmly clenched between teeth]  Momma, if i don’t know what you’ve got, i can’t give you good advice, now can i?

Going over the math several times, it became clear that with the cash account, she’ll have 10 years of withdrawals at her fingertips.  And adding in the CD’s?  Another 10 years.  That gets her to 100 years old – so long as her expenses don’t increase dramatically.  i helpfully pointed out that if you pretend like the long term stuff isn’t there?  She’s still fine!

In fact, she should probably up her spending!  The goal is for her last check to bounce.  i even helpfully suggested that she needed to spend more time at the regional casinos, and consider hiring a hot male stripper/nurse to attend to her needs. 

At the end of the day came my favorite revelation.  As we settled in the car and headed off for some grocery shopping, she lobbed this little offhand comment at me:

Mom:  Well, I sort of wondered if T was drunk when I talked to her last week.  You know how she gets really loud, and swears a lot when she’s been drinking?

daisyfae: [sound of head exploding goes here]

It's very difficult to drive when your head explodes. Makes talking on a cellphone look like a cakewalk...

*This is why i absolutely adore Dr. M…. Not just because she is stunning and smart.  Really.

** and completely out of alignment with any advice i’ve gotten from wealthy smart friends….