By JULIA ANDERSON
My first box of clothes from Stitch Fix,
the online clothes styling service, arrived this week.
Of the five items in the box, I kept three, a pair of dark blue Capri pants and two tops, one with quarter-length sleeves with white stripes on black,
he other a tailored, lighter summer blouse. Total cost -- $190.
I signed up in desperation.
Nordstrom abandoned me a couple of years ago when the company closed its mall retail store nearest to my house. To shop Nordstrom, I now must drive an hour, one-way.
The change has been a difficult adjustment. I have been a card-carrying Nordstrom shopper since the ‘70s when I lived in Seattle. Sadly, I care about Nordstrom, which has faced challenges with the shifting online retail environment and its marketing strategy.
I loved the stores. Going to Nordstrom-land always made me feel better. I could usually find something of quality, something in my price-range (my upper price range). Of course, there were the extras – tissue-paper wrapped items, fragrances from the cosmetic counter, accessories and superb customer-service.
As a full-time working baby boomer, Nordstrom was my go-to place for business-dress suits, shoes and blouses. And when I needed the occasional elegant dress for a fund-raiser gala, Nordstrom would come through.
The chain began my abandonment long before the mall store closed. The merchandising mix changed as an attempt to attract younger customers. Prices moved higher. I began to walk out of my favorite store without finding something that “brought me joy.”
An unsettling disappointment.
Then Nordstrom was gone from my town. Since then, my purchases at Nordstrom have dropped to one or two items a year. Stores can still have what I need when I want quality -- a pair of well-made black leather sandals (for $200), for instance, or a black all-occasion wool scarf for travel ($100). A pair of fleece-lined green suede boots caught my eye, but that $230-purchase was more than a year ago.
Honestly, Nordstrom is too expensive for most of us. I've been priced out of its market. The mailed catalog has always been out of reach.
Macy’s, Target and Kohl’s are all I have left. But Macy’s just turned the upper half of its top floor into a junky discount bin. Seems like a race to the bottom. I've never bought much at Target or Kohl’s or J.C. Penny’s. The quality is not there.
I have done better finding what I want at a curated consignment shop called Gather in Seattle’s Columbia City neighborhood when visiting my son. A couple of locally owned women’s shops in my hometown offer some hope.
Since the Great Recession I've saved money on clothing by buying workout clothes, outdoor zip-up sweatshirts, outer rain wear and stuff for gardening at Goodwill. Why spend $30 on a cotton blouse or $20 an exercise bra when I can find them for $5 each at Goodwill?
Full disclosure: I no longer need business suits or heels for work. I retired from the full-time job nine years ago but continued to work from home (sometimes in my bathrobe). Lately, I have been writing and publicizing my book, “Smart Women Smart Money…..”. When I speak to groups of women about financial literacy or host my monthly Smart Money public television show., I want a look that says I'm on the ball. (click here)
But as the years have ticked by I have found retailers no longer take me seriously. They are missing the boat. Baby boomer women are NOT OLD and do NOT want to look frumpy and old.
Enter Stitch Fix
Clothes shopping was once fun for me, a stress-reliever, a way to find something nice, on sale. I could be in the moment, day-dream about what might look good, give my work-a-day world a lift.
I’ve told Stitch Fix everything about me….my weight, height, hip measurements, bra size, how I like to dress. There was nothing in my first box that knocked my socks off.
My hair stylist (nearly 20 years younger than I) told me last week that she quit Stitch Fix because she found the clothes a bit boring. “They just couldn’t figure out that I wanted more style, a more edgy look.”
Hum, if she can’t find happiness with Stitch Fix, I wonder can I?
A new box of clothes arrives next month.
Meanwhile, I just clicked the buy-now button at Amazon.com to replace the Estee Lauder lipstick I’ve been wearing this year. That’s better than driving into town, searching the cosmetic counter at Macy’s for someone to help me, only to find out that that particular shade of lipstick is not in stock.
The lipstick ships tomorrow!
"Trying to predict the direction of the market over one year, or even two years, is impossible." Peter Lynch, investment fund manager, (1944 - )
BY JULIA ANDERSON
Investor confidence is a must for women if they want to ever stop working, but it is in the area of investing that women say they are least comfortable. A business-owner friend of mine said that she just “can’t get her head around it.”
It being the stock market, stock mutual funds, how publicly owned corporations are required by law to operate and even how quarterly stock dividends are paid and reinvested.
Yet, understanding these the basics of investing is the way to successfully accumulate and grow savings for the long-term. It is especially important for women get in the game since they live longer and need more money in retirement. The only way to accumulate that kind of money is to be an investor. As Warren Buffett says, “this is not rocket science.”
If you are late to the party and interested in becoming an investor, here’s how:
1 Start early, start small. These days there are several online brokerage firms that require zero or low minimum deposits to open an account. Their fees on transactions are usually 45 or less. And they offer zero expense ratios on index mutual funds. And you can move money electronically from your bank account to an investment account with one click. Among those online brokerage firms are: Ally Invest, TD Ameritrade, Fidelity, Vanguard, Charles Schwab Merrill Edge and E-Trade. Nerdwallet says the best online account for beginners is Ally Invest.
2. Do your homework. Read a few books that will give the big picture and not try to sell you anything. My two favorites: Burton Malkiel’s “A Random Walk Down Wall Street” and “One up on Wall Street,” by Peter Lynch. These two books will give you everything you need to know about big-picture, time-tested investing. Written in plain English, you find out how to determine if a stock is worth buying, what to stay away from and how to manage your fear. These books are a bit dated in terms of details, but the fundamentals haven’t changed. Do some reading.
3. Buy something. Inside your new Individual Retirement Account on line fund, buy something. If you are “risk-averse” as brokers like to say, start out with a stock index fund. That means your money (and your risk) is spread over all of the stocks held inside the fund. An S&P 500 index fund owns ALL the 500 largest publicly traded U.S.-based companies. According to historical records from 1928 forward, the S&P 500 has enjoyed an annual average return of about 10 percent. That doesn’t mean we won’t see swings. In 2017, the value of stocks in the S&P increased by 21 percent. In 2018, they dropped an overall 4.3 percent.
But let’s say you want to buy stock in individual companies paying a good dividend of around 3 percent, which is 1 percent more than the average 2 percent a year inflation rate. Online research is at your fingertips, unlike the old says when you had to rely on a financial adviser with an office and all the data. Now you can look up a company, find out everything you need to know to make an informed decision: profitability, dividend rate, share price to earnings ratio, revenue growth and share price track record. All that may take 30 minutes online. Then push the buy button with the idea that you could own this stock for a long time, maybe a life time.
3. Give yourself permission to make (a few, small) mistakes. Those mistakes include selling too soon. I made that mistake when I sold O’Reilly Automotive (ORLY), retail automotive parts chain, because I saw that an analyst had “down-graded” the company’s stock rating. After I sold, the O’Reilly share price jumped. Despite a downturn, the share price is still up 31 percent from a year ago, when I sold. I should have looked at the company fundamentals and made my own informed decision. Mistakes are part of the learning process. I have learned to buy blue-chip (nationally recognized, well-established and financially sound) company.
In my blue-chip portfolio, among others, are a couple of drug companies, an oil company, several big banks, utility companies, a coffee retailer and a consumer products company. All pay a good (3 percent) dividend. My losers include a capital venture company, a start-up computer chip company and an international drug company hurt by the changing currency values between Europe and the U.S.
4. Don’t panic when markets go down. I rolled my 401(k) into an Individual Retirement Account at the bottom of the 2008-2010 Great Recession. Since then I’ve doubled the value of my nest egg even though I’ve been withdrawing some of the earnings in that account. Fear is all around us all the time in this 24/7 world. Just remember the long-term nearly 100-year track record of the U.S. economy. When markets go down, stocks are on sale. Your reinvested dividends buy more shares at the cheaper price.
How did I become a confident investor? Easy, no one ever told me that investing was complicated. I learned from my mother who was an enthusiastic investor. A child of the Great Depression, she was careful with money, paid off debt including the farm mortgage and lived with my father within her means.
With just a high school education, you might think she would be intimidated by the investment world. Not so.
She only bought shares in companies that she understood…utilities, consumer companies, businesses that made sense to her. She had me investing when I was in my 30s because she wanted to share her interest in the economy, in successful businesses. She loved McDonald’s hamburgers, so she bought shares in the company and let the dividends reinvest. She bought, Exxon and Merck and let the dividends reinvest. At the end of her 40 years of investing she had a $1 million portfolio. This is not rocket science.
5. Look into management fees and upfront trading commissions. It’s one thing to put money into the stock market, it is another to find out what management fees and upfront commissions are being charged against your investments. If you are in a 401(k), find out what the management fees are for those funds. Anything more than 1 percent is too high. You would do better with your own IRA at an online brokerage firm in a zero-fee index fund. The same goes for commissions on specific products sold by financial advisers where an upfront commission may be as high a 5 percent or more on the money you are investing with them.
That’s it. Investing 101. As my readers know, I am passionate about financial literacy for women. Movies such as “The Big Short,” (2015) and “Wall Street,” (1987), “The Wolf of Wall Street,” (2013) and even “Trading Places,” (1983) give us the idea that the stock market is one big game for crooks.
Meanwhile, with the fall of the Iron Curtain, the villain in move after movie is the corrupt and evil corporate tycoon who is either poisoning the world or stealing us blind. Why wouldn’t we be afraid to invest. Let’s not forget the Tulip Bulb Craze in Holland in 1593 that really happened or the Enron market manipulation disaster in 2000 that really happened.
It's OK to be realistic and maybe a bit scared but not scared out of the market.
In reality, modern markets, while still driven by the basic human emotions of fear and greed and occasionally abused by real crooks, are governed by rules, by reporting requirements and by the incentives of regulated capitalism. A sensible investing strategy means understanding risk-return trade-offs. Remember, the more glittery the investment, the higher the risk. I’ve learned that lesson more than once. Remember that past records are a good indicator of future performance. and remember that there’s a difference between investing and trading.
“If you know you will either win or at least not lose too much, and if you index at least the core of your portfolio, you will be able to play the game with more satisfaction,” says Burton Malkiel, in “A Random Walk Down Wall Street.”
My mother, the investor, stuck with blue chips, put money into businesses that she understood, reinvested the dividends and never lost her resolve. Her investing philosophy continues to guide my thinking.
U.S. NEWS. Stock market 101: Everything you need to know about buying, selling and trading,
Stocks for Beginners, Motley Fool.
5 Easy Ways to Start Investing with Little Money, Money Under 30.
"Keep only those things that speak to your heart," Marie Kondo, Japanese organizing consultant and author. (1984 - )
BY JULIA ANDERSON
Marie Kondo’s book, “The Life-changing Magic of Tidying Up,” will be delivered this week to my doorstep. I’ve watched three episodes of her eight-part Netflix series, “Tidying Up.”
I am intrigued by her mantra, “Does this object bring you joy?” If not, say thank you and goodbye.
Over the weekend, I decluttered the guest bedroom closet and a cupboard in the laundry room. I know, Kondo wants you to start with clothes, but I decided to start small. For me the experiment worked!
I let go of the big-shouldered ‘80s gold silk blouse with the black swooshes across the front that I wore at my 40th birthday party. I thanked it for the joy it had brought me and said goodbye. My 40th is so far in the past it isn’t even in my rear-view mirror.
I said goodbye to a couple of business suits I still held on to from nearly nine years ago when I left the 9-to-5 newsroom job. My thinking: I might need a classy business suit again someday. Not going to happen.
De-cluttering hangs like a guilty fog over many in my Baby Boomer generation. We look around our houses and see sentimental connections to the past in our furniture, our dishware, art and certainly our family photos. Never mind all the stuff we’ve picked up here and there.
After 18 years of living in the same house, every closet, all shelf space and every cabinet is full. I need to tidy up.
Kondo’s technique asks us to organize according to preference. This is somehow freeing. I can let go if I say thank you. I can let go if it no longer “sparks joy.” The process worked with the blouse from my 40th.
And it worked with the laundry room cabinet space where I have stashed stuff without any thought to category or why it went there. With nothing of high priority, items went either to the trash or to the downstairs shop with the rest of the paint supplies. Most of the laundry shelf space is now empty, a happy (if not unsettling) result.
These small steps feel good. Maybe I can work my way to clothes in the over-stuffed master closet and to the big bin of “collectible” T-shirts from rock concerts that is hidden in the attic.
According to media interviews, Kondo is shocked by how much stuff Americans have and how emotional we get when we unburden ourselves by letting go and throwing away.
Her KonMari Method challenges us to ask the simple question, “Does this spark joy?” If not, goodbye.
She breaks the de-cluttering process into categories, not by place: (Oops, I already violated that rule.)
Those categories in order are:
Miscellany (How about bathroom cupboards?)
Mementos (photos, scrap books etc.)
She asks you to pile ALL your clothes in a big pile in a one location. Then ALL your books. ALL your kitchen stuff, and so on. Then you address each item in each pile by holding it and asking yourself, “does it spark joy.” If not, discard. She recommends discarding first, then storing later.
Once the discarding is finished, designate a place for each thing that you keep.
This worked for me with the closet and the cupboard. At least I tiptoed into the experience.
But Baby Boomers may need a new revised book from Kondo. This new book would cover de-cluttering but also suggest how to handle the dispersal of tangible assets of real value (art, jewelry, books, dishware, cars). The new book might suggest a process for finding out what your heirs want. And a process for organizing a list to avoid fights later.
Her new book might suggest how to off-load items of value such as art pieces that no family member wants, rugs that are too big for Millennial apartments, valuable furniture and collectibles. I can’t just give this stuff to Goodwill.
For me, the pressure is growing. In her early 90s, my mother turned to me one day and said how sorry she was about leaving her house full of stuff for me and my sister to sort through. Her house was definitely full from top to bottom. Fortunately for me, my sister moved into the house. I only asked for a few things.
My issue now with my own home is not so much clearing out clutter because I am not totally over-run but letting go of sentimental treasures. The clock is ticking. I don't want to end up with regrets, like my mother's.
My pledge to myself this year is to:
- Sell something on eBay.
- Sell something on Craig’s list.
- Invite all family members to tour the house and make a list of items they someday might want. Then update the tangible asset distribution list and give a copy to everyone affected.
- Give away to charity certain items of value that might raise money for a worthy cause.
According to Kondo’s book web site, she’s sold 5 million copies of “Tidying Up,” worldwide. Bless you, Marie.
For her book at Amazon.com, click here.
My SMART MONEY show regarding tangible assets
BY JULIA ANDERSON
During our Smart Money video conversations, co-hosts Joe Smith, Pat Boyle and I have covered many money-related topics. The short videos are distributed by TVCTV, the public television operation in Beaverton, Ore.
Some shows include guests such as Alan Edwards from the Social Security Administration or J.D. Roth at www.getrichslowly.org. These have been great fun and are hopefully giving viewers useful information.
Topics range from reverse mortgages to writing a will, selling a business to buying a franchise. We have discussed marrying after age 60 and how to keep your kids happy while doing it. Financial elder abuse and downsizing.
Below are YouTube links to some of these shows.
Why women should approach Social Security differently than men.
Why have a will.
Timeshares: Buying and selling. What to watch out for.
Social Security 101
How to Hold a family money meeting.
May to December relationships require special planning.
Reverse Mortgages: Questions to ask.
Charitable giving in Retirement
Evaluating an Early Job Buyout Offer
Should you buy a franchise in retirement?
These are just a few of our shows: For More:
Visit TVCTV public television, Beaverton, Ore.
By JULIA ANDERSON
U.S. stock markets are taking a beating with the Nasdaq now into bear market territory, down 20 percent from its August 2018 high. Apple forecasting lower earnings. The Dow Jones and S&P 500 are off 16 percent and 18 percent respectively from their highs. This week, we saw the biggest stock market sell-off since 2008.
This, my friends, is good news!!! Stocks are going on sale. As Warren Buffett says, "Be fearful when others are greedy. Be greedy when others are fearful."
With share prices down, investors have a buying opportunity not available during most of the past 10 years. That’s because since the Great Recession, markets have been steadily marching higher…the longest bull market in history.
Trillions of dollars floated around the world in the past decade, thanks to easy money from central banks. It makes sense that a great place to park money has been in the U.S. stock market. The money has flowed in, pumping up share prices. Over the past 10 years, the value of many individual shares more than doubled. The S&P 500 (the 500 biggest U.S.-based publicly traded companies) has increased by about 300 percent. That’s even with two corrections, the first in 2011, the second in 2016 when the S&P declined 14 percent.
Now, those who study the big picture, say we are over-due for a pull-back. Bull markets do not go on forever, even this one. They take a breather. They sell off when company shares are over-bought and over-priced. In other words, buyer enthusiasm out-strips performance. Reality must eventually set in as it is right now.
Share prices will more accurately reflect true value as they relate to earnings and profitability. It’s called a free market tied to honest (rule-by-law) quarterly reporting.
This year, volatility returned to markets. Up 500 points one day, down 600 points, the next. Graphically, this looks like the edge of a saw with jagged, sharp pointy ups and downs. News flash: This is typically how bull markets end.
Investors in their 20s, 30s, 40s and 50s should be celebrating the pull-back because this means quarterly dividend money reinvested inside their 401(k) and IRA tax-deferred funds will be buying more shares at cheaper prices. More shares mean more returns going forward as U.S. publicly traded companies continue to pump out earnings. The miracle of compound interest (dividend reinvesting) LIVES!!!
Those nearing retirement or who are in retirement must embrace a more complicated strategy:
Rule No. 1: Don’t try to “time” the market by pulling all your money out. It’s too late and besides you will miss the rebound.
Rule No. 2: Keep most of your nest egg in stocks or stock funds. Don’t touch them. Let the dividend returns reinvest. Hopefully, you have enough cash and/or income to live on while you ride out the downturn.
On NPR this morning, a young economic analyst gave me the impression that people who are nearing retirement should move their money into more secure savings such as CDs or money-market funds. Hogwash! If you do that you will run out of money before you die.
There’s nothing wrong with the American economy or its stock markets. We are just adjusting to higher interest rates (a good thing), a cooling housing market (another good thing) and more reasonable returns from corporations.
We are coming off the biggest bull market in history. It makes sense that volatility will return to markets, that we will see a sell-off in over-bought shares such as Facebook, Amazon and Google. Let’s see earnings in line with operating costs, let’s see Price-to-Earnings ratios at 20 to 30 points rather than 70.
By the way, ignore what’s going on in Washington, D.C. Warren Buffett said he never made an investment decision based on what happens in Washington.
Question: Where am I putting my money in 2019?
Answer: Individual corporate stocks such as Idaho Power, Duke Energy, MMM and McDonalds. Along with substantial amounts in S&P 500 index funds, a telecom index fund and a contrarian stock fund, all inside my tax-deferred 401(k).
I am NOT selling or trading any of these holdings. Even though I am required to withdraw cash from my 401(k), I am doing it out of a small cash fund. I have the rest reinvesting for the long-term.
The outlook for the U.S. economy remains positive, if not more normal. A 3 percent GDP growth rate is good. Job growth is good, consumer spending is positive. Inflation remains tame thanks to cheaper energy…. gasoline, oil. The Fed’s ability to raise interest rates is a good thing.
Don’t panic over the market down turn. Stay the course. Reinvest the dividend money.
Stocks are on sale!!! Buy low and hold on.
I meet women all the time who face job and money transitions and who want to do them right. It’s about building confidence and taking charge of the future. This is your money. No one cares more than you do!
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