Tuesday, August 25, 2009

Weekend with the Folks

We picked up my parents from the Atlanta airport last Friday. It was a longer drive than I expected. I should have advised them to use a much closer airport, perhaps in Charlotte, NC to benefit from the savings. I guess we saved about 100 dollars (which is the difference between the airport tax if they disembarked in the nearby airport), but driving to Atlanta was a pain. We got home at about 11pm and had dinner of pork chops and salad. My folks are staying with my kids in their room. It’s a bit cramped but it could fit all of them. I am afraid that they will distract my kids in their studies but the plan is to pick our kids up an hour or two after the end of their classes so they can study and do their assignments before coming home. It will be a bit crowded in the house during the month that my folks are here.

For the past few weeks, they stayed in my brother’s house before coming over. My brother bought a huge house in California; it was actually a foreclosure and it had a huge yard. With my parents with me this weekend, I had second thoughts about my house and had thoughts that I should have purchased a much larger detached home instead of the townhouse. But I think the investment will still pay off if I keep my wits and allow my kids to finish college before spending on a huge house. We had talked of my parents retiring with some ideas that they would retire in California and South Carolina. So I felt that I should have purchased a much larger place like my brother.

But putting aside my folk’s retirement plans, my brothers and friends larger homes, I still think I made a good decision to keep my investments prudent. I still believe that one’s home should only be about 30% or less of one’s investment portfolio. Purchasing a large home would reduce my cash flow and inhibit important expenses like my kid’s college expenses and crimp our lifestyle like traveling to other states for vacation. I think traveling with my kids to other states like our planned trips to California and Washington, DC, are important opportunities for learning. These future trips will help us acclimatize to the new environment and increase success. Spending on a large home will stimulate more spending and purchase of possessions which will limit one opportunities for learning and increasing experiences which also require money.

Of course this is more an investment philosophy but does it exclusively focuses on my family and not considering the larger responsibilities to my folks and kids lifestyles? I guess now is the time to articulate an investment plan and philosophy so I can get my perspectives right. I think that I should keep the townhouse for at least five years until my kids finish college. This will allow me to have the cash flow to fund their education, have a good lifestyle with travel opportunities to increase learning as well as stimulate other experiences instead of just staying home which would likely happen if one lives in a large home with limited cash flow due to increased spending. I guess this philosophy is good because it is less materialistic and disciplines one’s lust for possessions or goods.

I was also thinking about changing my car with a manual gear shift. Is it because I can now replace my car with my funds that are now available? Do I purchase a car with better fuel efficiency like a 1.8 liter engine but with an automatic transmission? Or, do I purchase a new car or a pre-owned one? Or, do I purchase a better car like a Nissan Altima for myself and let my wife and kids drive the Kia? Strangely, these are the questions one thinks of in an advanced materialistic culture unlike in more primitive cultures where the question of survival is brutally at the forefront. Living in places like the Philippine provide this perspective but moving to places like the US where ones perspectives, priorities and values can change due to the affluence. I guess the key is to have a good investment philosophy as well as having non-materialistic values.

Living a simple and prudent life is the secret of happiness. I am glad that I am not a full slave to fashion and I try to make purchase decisions based on logic and practicality. I think it’s this strategy or philosophy that has sustained me in the past years. Living in the most affluent society in the world increases the challenges and temptations. It’s a much bigger arena with more investment opportunities. Staying the course and having a well defined savings and investment plan will determine the quality of one’s life. All these thoughts come to mind with my folks living with us. My folks philosophy come from a different age and culture which no linger exists and not practical for me. Many challenges lie ahead for all of us.

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