Am I a Horrible Dad? Plus, 4 Principles to Guide Your Children Towards Financial Success

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Beau HendersonEven after they’ve grown up, your kids still probably ask you if they can “borrow a few bucks” every now and then.

According to Barron’s, nearly 80% of parents give some financial support to their adult children.

Whether it’s money toward a new car… help with a medical bill… or even just keeping them on the phone plan, you’re probably included in that number if you have kids.

After all, it’s only natural to want to help your kids when they need assistance.

And the easiest way to do that is financially.

But if you’re retired or approaching retirement, you know this can be difficult to budget for.

That’s why today, I’m bringing in my colleague Zach Scheidt to go over four principles you can follow to help your loved ones be successful — without sacrificing your income.

Helping Adult Children Through Life’s Difficult Periods

Zach ScheidtAm I a horrible dad?

I’ll let you be the judge…

This weekend, I took some time to go golfing with my brother. I don’t get to play golf very often, but it’s always nice to get a little one-on-one time outdoors with family members.

Halfway through our round, I got a text from my 19-year-old son David.

Apparently, David blew out the clutch on his car and it needed to be replaced. What’s more, he wasn’t able to work at his pizza delivery job without a vehicle.

David was panicking and didn’t know what to do!

And I had a dilemma… Do I jump in and help him out? Or do I let him work his way through the situation?

When I got the text from David, the first thing that went through my mind was “How can I make this better?”

As a dad, I want my kids to have a great life. I want them to have meaningful friendships. I want them to grow up to be responsible, fulfilled adults. And I want them to financially successful.

So naturally, I started thinking through solutions to help David get through this.

“How much will it cost to get the clutch repaired?” I asked.

David did some research and found a garage that could do it for $1,500.

“But Dad, I only have $1,200 in savings. And without my car, I can’t earn any more!”

Again, I wanted to jump in and say “No problem bud, I’ll pay to fix your car.”

But then what message would that send to David? Should he ask his Dad for a handout every time he runs into a financially challenging situation?

It was probably fortuitous that my brother and I happened to be on the golf course together that day.

I told my brother about the situation and the two of us reminisced about the times we were in similar situations growing up.

My memory was being stranded on the side of the road with an overheated engine. My dad helped me make the call to get a tow truck. And he made sure I had a way to get home. But it was up to me to scramble and figure out a way to pay for the repair.

My brother had a similar experience, being without a vehicle until he scraped together enough to pay the next installment for his insurance policy.

We’ve all been there.

And as my brother said, “The times when you have to struggle to figure things out… Those are the times when you really grow as a person!”

And so this weekend I didn’t pay for David’s car to get fixed.

Does that make me a horrible dad? I don’t know… I’d be curious to hear what you think!

As my kids get older, I’ve been thinking a lot about how to help them succeed in life.

By not allowing them to work their way through some tough scenarios, we’re robbing them of an important learning experience. We can be taking away the opportunity for them to earn that special level of confidence you get from figuring something out on your own!

At the same time, offering too much financial support to a young adult can also put you in a place where your retirement savings are depleted, or where you have to work longer before retirement.

I’m still learning and with six kids still at home, I’m sure there will be plenty more “young adult financial decisions” in my future.

But here are four principles I’ve settled on. Maybe they’ll help you with some of the scenarios you face as well!

Principle #1: Let Them Do Their Own Homework

As David and I were discussing his situation, I asked him to find out how much it would be to fix his car. It was up to him to call the mechanic and learn as many details as possible.

David also talked about possibly trading in his car and just getting something new.

While I didn’t think this was a great idea, I asked him to find some cars that he might be interested in, check different prices, and figure out what he could get from selling his current car.

By requiring him to do the research, (and helping to steer him in the right direction), I gave him the chance to learn how to work through a similar situation in the future.

Principle #2: Suggest Different Options to Consider

When David asked about possibly trading in his car and getting a newer used vehicle, he had his eye on an Infinity. That’s probably not the type of car that would serve him best as he works a delivery job and starts college in the fall.

I suggested looking at some Toyota, Honda or domestic sedans that might be priced more reasonably and still get him exactly what he needed for this stage of his life.

Similarly, you might ask your son or daughter to consider a different apartment complex (if they’re looking for a place to live), or a college with more reasonable tuition payments.

You don’t have to make the decision for them. But sometimes just by suggesting some different options, you can help them think through what is best.

Principle #3: Safety First

Of course some situations require us to step in right away, regardless of the financial cost.

When I was stranded on the side of the road, my dad made sure I got home safely. I can also think of medical situations that would require us as parents to step in and help first, before discussing finances later.

Of course you have to be the judge of which situations are urgent, and which situations allow you to take time to think through and discuss options.

So while I may sound “tough” when talking about sometimes letting our children learn life’s lessons the hard way, there are still plenty of situations where it makes sense to intervene.

Principle #4: Help by Enabling THEM to Succeed

Sometimes it takes a little creativity to find a good solution. But when our young adult children need financial help, there can be times where we help THEM actually dig out of the spot they’re in.

In David’s case, we settled on me co-signing a new credit card application for him.

Yes, I know credit cards can be dangerous. And I can guarantee you that we’ll be discussing exactly how he uses this card over the next few weeks.

But by doing this, I wasn’t giving him a hand out. Instead, I was giving him a financial tool that would allow him to get his car fixed. David’s only going to spend about $300 on this card, and he’ll be able to pay off the balance in the next few weeks.

Plus, by getting his first credit card, he’ll be able to build a credit history which might come in handy when applying for an apartment or some other life event down the road.

Here’s to living a rich and rewarding retirement!

Zach Scheidt

Zach Scheidt

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Mailbag: Your Top 3 Retirement Questions Answered!

This post Mailbag: Your Top 3 Retirement Questions Answered! appeared first on Daily Reckoning.

I’ve received tons of emails from readers like you with questions about retirement.

There’s just no way I could respond to them all.

And while many people don’t like getting so many emails, I do.


Because it means that there are existing or future retirees out there who can use my experience to live a more fulfilling retirement.

That’s the reason I became a retirement coach in the first place!

So today, I’m going to answer the Top 3 most frequently asked questions I get from readers about retirement.

Let’s get to it!

Question #1: “I plan on retiring this year, but I won’t be eligible for Medicare for another three years. What are my other options for health insurance?”

Purchasing health insurance outright can get expensive.

Most Americans receive healthcare coverage from their employer which brings down the cost. And by the time they retire, they’re eligible for government-sponsored health insurance through Medicare.

But if you’re ready to retire before 65, which is when Medicare eligibility kicks in, one option worth considering is what I call a “step-down retirement.”

It’s a simple strategy where you significantly cut back your hours at work, let’s say to 2 days a week for example.

Or you can find a new part-time job instead if you prefer.

Since you’re still working, you can keep employer-sponsored health insurance.

But you’ll still have the majority of your time free to start settling into your new retirement lifestyle.

Once you reach 65, you can make the switch to Medicare and fully retire.

This is a great strategy for not paying full price for health insurance, and it has some other added-in benefits as well!

You’ll still receive part-time income, so you may even be able to afford to delay filing for Social Security and receive a higher monthly benefit.

And you have room to settle into your new identity as a retiree.

I recommend everyone consider this option when they’re planning for retirement, even if health insurance coverage isn’t your top concern.

Question #2: “What’s the biggest mistake you see people make while planning for retirement?”

The biggest retirement planning mistake I see actually has nothing to do with finance.

I had one client who was a former Delta pilot.

He was very successful and had all of his finances for retirement squared away.

But he didn’t plan for his new identity as a retiree which caused him serious problems.

He was used to walking through terminals in his pilot gear and seeing people express respect for his status.

He enjoyed the admiration!

But when he retired the pilot uniform, all of that went away. He felt like he lost a piece of his identity and became seriously depressed because of this.

This is a phenomenon I see all too often.

People of all professions identify strongly with their careers. After all, “What do you do?” is one of the first questions people ask when they meet someone new.

Before you retire, you need to ask yourself, “What do you want to do?”

I’ve seen people use their newfound free time to write a book, volunteer, start a business, and much more.

If you’re looking to avoid the most common retirement mistake, then you need to start thinking about what type of person you want to be when your career ends.

Question #3: “How will my current income affect what I receive from Social Security when I retire?”

Earned income is one of the many factors that contributes to how much your monthly Social Security check will be.

More specifically, Social Security uses your highest 35 years of earned income in its calculation of your monthly check.

The more money made over these 35 years, the higher your benefit will be.

The math on this calculation can get complicated pretty quickly.

And even if you use the income earning chart on the Social Security website, it will only give you a rough estimate.

But what you need to know is that to get the highest amount, you’ll want to have as many years as possible earning the highest income possible — which actually brings me back to Question #1 when I talked about a “step down” retirement.

If you don’t have 35 years of work experience, or you earned very little in a few of those years, working a part-time job is an excellent way to replace some of those zero-income years that are weighing on your Social Security benefit.

Of course, everyone’s situation and ability to work part-time is different. But know that ultimately, the more income you make, the more you’re entitled to in Social Security benefits.

That’s why it’s so important to file with a plan that takes into account every factor to make sure you and your loved ones are getting all you deserve.

Do you have any questions about retirement that you want me to cover in this newsletter?

If so, I’d love to hear from you!

As a retirement specialist, I’m not able to provide you with the best and most accurate information unless I know a little about your situation.

Here’s to living rich,

Beau Henderson

Beau Henderson

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[Enclosed] Your FREE Retirement Guide for Beginners

This post [Enclosed] Your FREE Retirement Guide for Beginners appeared first on Daily Reckoning.

“I haven’t started my retirement nest egg yet, and I’m worried about not having enough. How do I get started? Please help!”

Beau HendersonI’ve already gotten hundreds of replies from Monday’s survey.

And as they keep rolling in, I can’t help but notice many of you facing the same questions about retirement.

By far, the number one question I’ve received is about investing for retirement.

Over the years, I’ve had countless clients come to me saying they haven’t started their retirement nest egg yet.

And that’s because they don’t know how to start!

So today, I’ve asked my colleague Zach Scheidt — editor of Lifetime Income Report and author of The Big Book of Income — to show you the first step to investing for a Rich Retirement.

Let’s get to it!

Your Beginner’s Guide to Investing for Retirement

Zach ScheidtWhen you hear terms like “Wall Street” and “investing,” your mind may flash to visions of frenzied traders shouting and pointing some sort of foreign language at each other on the stock exchange floor.

This is how Hollywood often portrays the profession.

But today, very few trades are actually processed this way.

That’s because computers have replaced the need for these “floor traders,” as they’re called, and instead have opened up the world of investing to anyone with internet access.

Online brokerage accounts are now the easiest option for investors to purchase stocks.

Opening up one of these online brokerage accounts is as easy as opening up a new bank account.

  • First you complete a short application.
  • Next you provide proof of identity — usually by sending in a picture or fax of your driver’s license and Social Security card (for tax purposes).
  • And then you fund your account by either wire transfer or credit card.

The process really is that easy. All that’s left to do is figure out which investments to buy — but that’s what we’re here for!

Here are a few of my favorite online brokerage firms…

With So Many Brokers to Choose From… Here Are My Favorites

Charles Schwab


Schwab is one of the oldest and most widely used brokers around. The company charges you $4.95 for every trade but now no longer requires a minimum account balance to start trading. Schwab is not only among the cheapest of brokers, but they also have good customer service and some nice bells and whistles for reviewing the income in your account.

You can click here to be taken to Schwab’s new account form.



E-Trade is one of the best known brokers in the business because of their eye-catching advertisements. The company requires a minimum of $500 to open an account. And for most investors, E-Trade charges $6.95 for every trade. E-Trade’s fees are a little higher than Schwab’s but E-Trade also has a nice online platform with fancy reports to monitor your account.

You can click here to be taken to E-Trade’s new account form.

Interactive Brokers


Interactive Brokers (or IB) is a no-frills company that is a little light on customer service but has very low fees for trading. The company requires you to have $10,000 to open a regular brokerage account or $5,000 to open a retirement account. IB only charges $1.00 for a stock trade, or a penny a share if you’re trading more than 100 shares, and also offers discounts if you’re making large trades.

If you’re internet-savvy and an experienced online investor, IB is a great brokerage. If you think you might need a little more support with your account, I would use one of the other options.

You can click here to be taken to Interactive Brokers’ new account form.

When you’ve found a broker you like, look for an “Open Account” button on the homescreen. (Or just use the links we’ve provided.)

The site will walk you through their procedures for opening an account, which as I explained earlier is very simple and should take on average just 15 minutes!

I hope this quick rundown helps you out and finally puts you on track to make money in the markets.

Here’s to growing and protecting your wealth,

Zach Scheidt

Zach Scheidt
Editor, Rich Retirement Letter

The post [Enclosed] Your FREE Retirement Guide for Beginners appeared first on Daily Reckoning.