Money Awareness

I spend a goodly amount of time online, reading, so it came as a bit of a surprise to realize that I didn't know how the disaster in the Gulf started, and I didn't know why what was going on with Greece was such a big deal. In fact, I asked my wife why the cover article in the latest Economist, which showed the Acropolis, and helicopter, titled 'Acropolis Now' -- okay, that I got, it was a pun on the movie title - also had a shot of Angela Merkel. Why her, I asked. What has Germany got to do with Greece? And she was able to tell me, because NPR had done a quick bit about that the night before.

So though I think I'm well informed, maybe I'm not as well informed as I think. Which is why it came as a little bit of a surprise to discover, the other night, while I was playing with Quicken, to find that in a sense we didn't have as much money as I thought we did. I look at our money frequently, have this series of spreadsheets showing what we have, what we spent, so I think I know what we have. And then I find: Well, not exactly. We didn't lose any; it's just that I suddenly realized that it wasn't all one big -- okay, not that big, but a goodly amount -- pool of money. We couldn't, tomorrow, take 80% of it and go do something with it. At most, we could take about 35%. That's the amount that's in savings, checking, money funds, and direct investments. The other 65% is in retirement funds -- mostly 401(k), a little in defined benefit plans. So, that other part, the major chunk, isn't spendable. I suppose we could, for one of them, say 'give me a lump sum payout', and they'd do it, but we're not going to do that. The idea is that we want our retirement income stream to sustain us, comfortably, and having to think about investments isn't my idea of fun. Of course, having to think about the possibility of 401(k)s and the like defaulting doesn't, either.

So, given that the amount of money we can actually spend is about a third of what we have, it makes sense that when I bring up Quicken, the amount that I see first, in the summary, is just that part. The other two-thirds is 'hidden' -- I can tell Q to show the total, but I usually don't. But in thinking about income streams, it occurs to me that I really do need to start thinking about when, and how, and how much we'll start taking from those various hidden funds. I must say, it makes me feel odd to do that. It made me feel odd to realize that in order to meet ordinary expenses, we were drawing down on a money fund, which we started doing about a year or so ago. It made sense; instead of using 'real' money to do that, we instead contribute to the retirement funds, thus deferring taxation. We did that math, and it worked out. But it felt funny. So now, to think 'we should start drawing down on the 401(k) and the like' -- well, that feels funny, too. It's like building a house on rock, and every year you've been reinforcing the rock -- and now, for the first time, you're starting to chip away at it, instead. It feels funny. And a little scary.

Not as scary as Greece, or the Gulf, of course. Just a little - unsettling.