Sunday, June 21, 2015

Racism in My Community

I wrote at the beginning of the year, I’m considering rebranding this blog. One of the topics I’ve contemplated is “becoming Savvy” or “getting a clue.” I came up with the idea after reading an interview with Susan Jane Gilman where she describes her book Hypocrite in a Pouffy White Dress: Tales of Growing Up Groovy and Cluelessas a series of essays on getting a clue about her naiveté.

I am the queen of naiveté. I grew up on a farm in rural Wisconsin where the only sources I had for learning about the outside world were school, church, television – only CBS though since our reception couldn’t pick up NBC or ABC - and from books. Unfortunately, it wasn’t until later in adult life I realized these sources usually presented an ideal or white-washed version of the real world. 

While listing topics for my new “Getting a Clue Blog, racism along with feminism are always at the top of the list. It was rare for me to encounter people who weren’t white in my community during the 60’s and 70’s. The one and only time I remember seeing someone with darker skin was while visiting a nearby town with my Grandma. We were sitting in her car on a sweltering July day (probably waiting for my Dad to return from the feed store) when she said, “Quick roll up the windows and duck down. There are colored folks over there who’ll steal from us if they see you” I remember doing what she said, but only after sneaking a peek at this man and his son.

I learned about the civil rights movement in social studies and was taught God loves everyone equally at church. I believed our country had moved on from racism and that my Grandma was an anomaly. She was old, didn’t get out much and didn’t know better. In the eighties I went to see the film Mississippi Burning and was reassured the world had changed and my country had moved on from all that. 

That was until a few years ago, before the Trevon Martin incident. I was relaying bad news from a company I work with to a respected member of my community. This person is an educated, religious, wealthy, older white male. Upon hearing my news, he went into a rage swearing and spewing hatred towards every person he had ever dealt with at this company, even referring to a former employee of this company with a racial slur.

I was shocked. I stood there completely tongue-tied unable to believe my ears. I had been wrong. When this man singled out a person of color with the “n” word I realized not only did racism still exist, but I was looking right at it. This man may think he's good at hiding it, but racism and hatred are alive in his psyche. 

I was reminded of him this week as I read numerous articles and blog posts discussing how racism continues to be a huge problem in our society; in response to the shooting at Emanuel AME Church in Charleston.

Racism is not a topic I can easily write about. I feel I don’t know enough about it to write truthfully and intelligently. But I can tell you this, racism does exist and is more prevalent than I thought possible. It exists not just in our segregated cities and in the south. It is in the north, in our suburban communities, in our places of employment, in our churches, our charities, and our families. I would like to think the children of the man I spoke to above would have been appalled and embarrassed if they had heard his words, but I will never know for sure.

Another key element of my “Becoming Savvy” blog is to write about books that have made me a more informed person. A book I’ve been meaning to read for this project is The Warmth of Other Suns: The Epic Story of America's Great Migration by Isabel Wilkerson.

Mocha Mama, one of my favorite bloggers covering racism, writes:
There aren't many books that I would recommend be a part of a mandated curriculum in teaching History (because there are a great many to be sure) but one that I cannot stop thinking about is Isabel Wilkerson's The Warmth of Other Suns. It is remarkable in scope and one cannot help but consider that movement, The Great Migration, in shaping cities and labor issues and the construction of what came to be known as the ghetto and the gentrification of those cities later on in history. Wilkerson herself has called that Migration "the biggest underreported story of the twentieth century.

I plan to read The Warmth of Other Suns: The Epic Story of America's Great Migration next month. Will you join me?
Please Note, I am an Amazon Affiliate


Sunday, June 14, 2015

How to Pay off Your Parent’s Mortgage?


My Parents divorced when my Mom was 55. One of the first things she did after securing full-time employment was to purchase a condo. Despite refinancing her mortgage for a more favorable interest rate (than the outrageous balloon she originally incurred) and a shorter mortgage term she still owed $60,000 of principle when she was forced to retire at age 75. She quickly discovered with almost no accumulated savings, making ends meet on a fixed income with a mortgage was difficult.

My siblings and I began discussing how we could assist her in paying off her mortgage, then recoup our investment when she eventually sold it.

My mom met with an elder care lawyer to discuss deeding her condo to her children. I knew it had become more difficult to transfer property since President Bush had signed the Deficit Reduction Act of 2005 (this Act increased Medicaid’s look back period from three years to five), but was surprised when the lawyer flat out refused to help us. She said with my mom having virtually no savings she would be ineligible for Medicaid for the next five years until every penny of equity transferred to us had been paid to her nursing home. What if her children couldn’t come up with this money? She refused to put my mom in that situation. 

We asked, “What if my mom doesn’t need nursing home care in the next five years?”
The lawyer didn’t care, she felt my mom’s condo equity should remain with my mom to cover her long term care or other expenses whenever they may occur. The discussion was over.

$60,000 split four ways was too great of an expense for my siblings and I to handle. There were spouses and grand-children to consider, child-care expenses and our own mortgages; $15,000 was a lot of money to hand over to your mother-in-law with no guarantee of ever getting it back. We explored other options such as selling the condo and having my mom rent or live with one of us, but she wasn’t ready for that. Plus, monthly rental payments cost almost as much as her mortgage expense. Instead, my brother reviewed all of her bills and cut every unnecessary expense. It literally made us sick to see how she had been taken advantage of over the years by cable companies, insurance agents, car repairmen, investment advisors, etc. When he finished her monthly expenses were manageable.
Her condo will be paid off next February and I’m confident she’ll make it.

I was reminded of my mom’s mortgage when my husband and I met with a Wisconsin title employee last week. As the representative was going over our mortgage paperwork she said something about it not being a good idea for our children to make our loan payments. Instead, she recommended they refinance the mortgage in their own names if they wanted to make payments.

After the closing was over, I asked her to explain what she meant about children refinancing the mortgage in their own names and if this was the preferred method for a child to pay off their parent’s mortgage.

She actually recommended children not pay off their parent’s mortgage and if needed do so only if:
- A written agreement was drafted by a lawyer and signed by the parent and the child prior to the child making any payments.

- All siblings were aware of the agreement and a written repayment plan was discussed and agreed upon by all siblings.

- Every mortgage payment was made with a paper trail. Never give a parent cash to make a payment.

She knows of several children (including herself) who paid mortgages and other expenses on behalf of their parents assuming they would be reimbursed from their parent’s estate only to have these repayments disputed by siblings. Lawyers were involved, the child was never reimbursed and the siblings no longer speak to each other.

Her bottom line advice on how to pay off your parent’s mortgage:

Don’t do it.

Have you or your siblings paid expenses on behalf of your parents? Has it been a favorable experience?

Sunday, June 07, 2015

Switching my Goal to Financial Independence

This week a 60-year old asked me, “How much money do you think the average couple needs to retire?”  I answered 1.2 million.

That was the number I had initially come up with for myself last fall when my husband decided to retire at the end of 2014.  The initial plan was for me to join him in retirement when our total liquid assets reached 1 million.  I added the $200,000 to cover taxes on our 401(k) distributions after hearing horror stories from a couple that didn’t plan for taxes on their 401(k) money.

The 60-year old has been asking this question to everyone he knows.  Most answers fall between $1 and $2 million.  For himself, he thinks he and his wife need between $3 and $4 million. His plan is to retire at 63.  He recently bought a condo in Florida on a golf course where he will spend the winters. He will sell his home in Wisconsin and buy a condo here where he will live in the summers.  His only hobby is golf.  He can play for free at his Florida condo.  His company offers retiree health care and he will receive a pension.

$3 to $4 million!  If that is what a couple needs to retire comfortably I will never be able to retire. 

Which is why I am changing my goal from retiring early to financial independence.  In addition to saving for retirement, I am going to spend the next 5-6 years building an alternative income stream to supplement our retirement funds.

In other news, I had to let my temp go last week for underperformance and am starting over on Monday with a new employee.  My boss told me not to count on having much of a summer…

Financial independence is looking very attractive right now.  What steps are you doing to create financial independence?

Also, how much money do you think the average couple needs to retire?