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Living within Your Money, not Your Means

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

Do we ever accept responsibility for our own actions?  It would seem in today’s society, the answer is no. 

When I was a kid, we used to play ball in the backyard, that’s football, basketball, and baseball. 


The first two sports, football and basketball, created no problems, but baseball could be an issue when you pulled a pitch down the left field line. 

Mr. Scott’s house was in the way, more specifically, his second floor picture window.  One particular day, my hit and the window happened to collide, and it wasn’t very good for the window. 

My dad heard the noise as we kids scattered.  He marched me over to see Mr. Scott, to both apologize and tell him how I alone would pay for the window. 

It was a long process of payback and punishment. 

However, I learned it was my fault, and my responsibility.  I couldn’t put the blame someplace else. 

Today, that attitude seems to be passé. 

For years, we’ve learned through financial planning to consider withdrawing for retirement from your assets at a 5% to 6% rate. 

At this level, historically, things should be okay.  Unfortunately, given Mr. Bernanke’s artificially contrived low interest rates, a 5% to 6% rate seems difficult when all your money is sitting in a CD, savings account, or money market. 

However, there seems to be a large majority of people that will not adjust their rate of withdrawal in order to account for the reality of short-tem interest rates. 

They want the liquidity and safety that a savings account provides, but refuse to accept the low interest-rate reality. 

When other alternatives, such as guarantees and investments non-correlated to the market are suggested to meet those cash demands, these same people find excuses not to participate. 


Regrettably, many people continue to withdraw and spend at a rate not able to be achieved. 

So, what happens?  It’s simple. 

They erode their principal, and ultimately run out of money. 

When asked during this withdrawal period to cut back on spending, the usual response is akin to the temper tantrum of a young child:

“But, I waaaaaant it, it’s my money!”  Or, “I’ll deal with it later.” 

Finally, the classic, “I have to maintain my lifestyle.” 

Most people, when confronted with erosion of capital, are stunned and want to blame society, the bankers, the broker, or even their spouse, but never themselves. 

Our historically low interest rates have forced everyone to reexamine how they spend money, how they invest it, and how they withdraw it. 

Ultimately, everyone must realize that now, more than ever, you must live within your money, not your means. 

If you don’t, then you may run out. 

At that point, don’t look around for the culprit, just look in the mirror, because the person to blame will be the one looking right back at you.         

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