The Finance Blogger


Self Driving Cars for Retirees

December 7th, 2015 ernie Posted in Travel No Comments »

Self Driving Cars for RetireesGoogle’s self driving car shown in this picture is obviously a prototype. Many companies are working hard to perfect the technology and bring it to market along with Google. But who will be the early adopters for this technology? Self driving cars for retirees will tap a huge market. Turns out that the baby boomer generation just could be the primary market for self driving cars. Just as they have done with so many other markets, the baby boomers with their mass market purchasing capabilities, they could be the ones to drive this particular market. Within the next couple of years, there should be cars on the road that have the capability to take you where you want to go without the need to actually drive it. Just program the GPS with the address you want to go and sit back and relax. Really, is it that simple?

Self Driving Cars for Retirees

There are many challenges for the developers of the cars and the software. But one that we think may actually be a blocker to the adoption of the self driving car could actually be more personal. Somehow you have to tell the car where you want to go. You have to have an address and you have to enter this information into the vehicles computer, just like you would do for a GPS.

Many seniors cannot even program their TV’s and computers or the current GPS they have in their vehicles. How are they going to program a car’s computer? Perhaps their children will do it for them, but then what happens when you arrive at your destination. Who decides if you park on the street or the driveway. Can you take over from the car. What happens in a crowded store parking lot?

There are so many issues and questions, it is going to take some time to resolve, however for the market to really mature, the developers have to make the human interface for seniors really simple and straightforward. Otherwise they will be scared away from self driving cars and just not make that purchase.

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Renting Vacation Homes

May 21st, 2012 ernie Posted in Travel 2 Comments »

Renting Vacation HomesFor years now we have been renting vacation homes in various countries in North and South America. However the majority of experience has been in California and also in Arizona were most Canadians and northern US residents spend their time during the cold winter months. The question we have always asked ourselves is whether it is better to rent or to actually go and purchase a vacation home. We decided some time ago that it was better to rent vacation homes since we like to try different places and travel around to various states.

Vacation Home Prices Dropping

But recently with the price of homes coming down so much we are wondering if it is better to own a place. Next year we are going to rent a condo for three months and it is going to cost us $8000 for the three months which is quite a bit. Now this is a nice place with three pools, hot tubs, tennis courts, underground parking and within walking distance to many restaurants and bars. We are pretty happy with the unit as well since we rent it every year, however this will be the first time we take it for three months.

The Costs Can Add Up for a Vacation Home

When you add taxes, condo fees, utility fees and insurance we wondering if the cost begins to approach this $8000 number and would we better off with something we owned. Right now the condo we rent is worth approximately $250k, so taxes should be around the $4000 a year range. We are told that condo fees are approximately $300 a month or $3600 which includes water. That leaves insurance, electricity, heating and maintenance while we are not there.  With this quick analysis we are over the $8000 number and then some, so it probably does not make sense to buy a vacation home unless we were going to rent it out.

The problem with renting it out is that if you rent it to people who are trying to get away from the cold weather up north, they want the same time we want the unit. So renting it does not seem to work very well in a situation like that. If we decided to purchase the condo, we would want to use it as much as possible which just adds to our travel cost. Based on the numbers I think we will continue renting vacation homes.

We wrote a post two weeks ago entitled, “Should we purchase a vacation home” and based our analysis more on emotional issues instead of financial ones. it is good to see that not only did we make the right decision emotionally we made the right decision for us financially as well.

Problems Renting Vacation Homes

Many people buy a vacation home because they have had problems with rentals being badly equipped, or being very dirty and needing cleaning. We have not had this problem , although we did get to preview a unit before we decided and choose one that was clean. We have been renting the same unit for the past 10 years in California. Other condos that we rented have had some problems such as being dirty and needing a thorough cleaning. One unit we rented, we had to go an purchases glasses and towels to dry the dishes. We were able to get  our money back, but really if the condo is well run, this should not be a problem.

We have heard of horror stores when it comes to renting vacation homes so it pays to do your home work, talk to previous tenants, get references and so on. If you do not you risk the chance that you will be disappointed or face a lot of work cleaning up someone else’s mess.

We are interested in hearing what other people have to say about their experiences renting vacation homes. Good well written comments about this subject will be approved, while anything less than that will be picked up by our spam filter.

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Should We Purchase a Vacation Home

May 7th, 2012 ernie Posted in Travel 1 Comment »

Should We Purchase a Vacation HomeFor years now we have been vacationing in the Palm Springs area of California. We have always rented a motel room or in the past few years we have rented a condo for one or two months. We have watched the prices decline significantly since 2008 and have wondered if we should purchase a vacation home or condo. There are all kinds of issues both for and against in terms of purchasing a vacation home. We have agonized over this for some time, especially when we see a place that we really like and imagine being able to visit anytime without needing to arrange to rent a place. Some of these places even come furnished and all we would have to do is move in!

We have spent a lot of time thinking about this issue of should we purchase a vacation home and decided to share some of our thinking with our readers. If you have gone through some of the same analysis and wish to share these comments with us please do. Also we believe that it is a very personal decision, so what works for us will not work for someone else.

Criteria re Should We Purchase a Vacation Home

We considered the following issues as part of our decision to not purchase a vacation home. You may have other reasons and you may say so what, let’s purchase a home anyway:

  • Will the home appreciate in value
  • What is the financial cash flow – mortgage, taxes, utilities, redecoration
  • Would we rent it out when we are not using it
  • Who would look after it while we were not there
  • How often would we use it
  • Would we go to other locations for vacation
  • Will the family come to visit
  • Rental facilities sometimes do not live up to the advertisement
  • Rental facilities can be messy or tired and not very appealing
  • It is someone else’s place

We went back and forth many times regarding whether we should purchase or not and in the end we decided not to purchase a vacation home in Palm Springs. Initially when we made this decision, it was prior to 2008 when real estate prices were booming and homes were increasing in price all over. We decided that buying a vacation home for us was not in the cards because we wanted to try different places and felt that owning a vacation home would hold us back from doing this. If you own a place you feel that you have to use it!

Prices of Vacation Homes have Really Gone Down

Since 2008, the prices of homes and vacation homes in particular have declined a great deal.  Once again we had thoughts about whether we should purchase a vacation home or condo. The prices had decline by more than 50% in some cases ( thank goodness we did not buy prior to 2008) and here we were again assessing whether we should buy a vacation home.

We had been to Mexico and really enjoy our vacation there as well we have visited a number of other locations around the US and always seem to come back to Palm Springs as our go to vacation location. We went through the list of criteria we had set up for ourselves and decided again that purchasing a vacation home was not the right decision for us. Although this time the decision was based on a different reason. Although we still go to other locations and do not want to feel guilty when we are not using our vacation home, we had another reason for not buying a home.

We simply do not want the bother and trouble that owning two homes would present to us. When we rent, we have no issues other than making the decision of whether we are going to rent or not and is the place clean etc. When we are ready we leave and do not have to worry about closing the place up for a long term absence or arranging for someone to look after it for us. It is a no worry vacation. So once again we decided not to buy a vacation home.

What About Long Term Real Estate Investments

Most people buy vacation homes for a place to take a vacation and appreciation is secondary. The long term real estate market in California is still in trouble and although homes have started to come back a bit, they have a long way to go. We could easily have another recession and for us it is not worth the risk of buying real estate unless I planned to hold onto the home for more than 10 or 15 years.

After all was said and done, our decision is to continue to renting and not purchase a vacation rental decision. If you have arrived at the same decision or are following a different direction, we would be interested in your comments and reasoning. Our readers will enjoy learning some of the ideas that went into your decision.

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Travel and Retirement – $$

October 7th, 2011 ernie Posted in Travel 1 Comment »

In our last post we wrote about living in an RV and traveling. Living in an RV is not something for us! This post is a bit more general in the sense that many people who retire also want to spend time traveling i.e. Travel and Retirement. They have the time to travel and the freedom to really go wereTravel and Retirement ever they wish provided that their health allows them to travel and even leave the country.

Some people are in for a rude shock, though. Once they retire they suddenly find out that not only can they not travel, they may just have enough to live on and maintain their current standard of living. In addition they have begun to have health issues and this really increases the cost of travel significantly or they may not even be able to travel at all because they cannot find any travel insurance to cover them due to their health issues.

These are tough times for many people, so it is important that you really evaluate your situation well to make sure you have the money to do what you want to be able to do. Travel can be expensive, depending on how you plan to do it. If you go first class, staying in top hotels etc, it is going to be expensive. Even if you plan to live in an RV like the couple we talked about in our last post, you still need to have sufficient funds to be able to purchase or rent an RV. Selling your home and moving into an RV is a pretty drastic step for many people.

Travel and Retirement – Budget

The first step is to have a budget. Use pen and paper or a spreadsheet if you have a computer available and are comfortable using spreadsheets. Enter all of your monthly and annual income as well as cost for living expenses, utilities, taxes etc. Don’t forget to set aside some money for maintenance of your home and car as well as medical bills. These can mount up in a hurry and really affect your lifestyle if you are not careful.

Once you have developed your budget, add in your plan expenses for travel or whatever you want to do from a retirement perspective. Some people only want to golf for example. You may need to make adjustments to your budget so that you can squeeze in some travel or other activities that are high on your priority list.

Travel can be Inexpensive

Another friend of ours will fly into a location, rent a car and then spend the next month camping in various state parks. They really like to hike and explore and this not meets their objectives in terms of leisure activities, it also helps their budget as well. They are paying for airfare and a rental car, however at that point they are living very inexpensively while they are camping. If the weather gets bad or they just feel they need a day or two in a motel with a clean bed and a shower they also will do that, but their main plan is to camp.

Staying with relatives is another approach many people use. As long as you reciprocate, you can have a very nice vacation that is inexpensive and yet very enjoyable as well. Sure you pay for a few meals, and probably bring some gifts, but this is much less  expensive than staying in hotels and motels or going to resorts. One friend of ours never stays in a hotel. They will only travel if they can stay with friends or relatives.  These people are being cheap since they actually have the money to travel with and can stay anywhere they want. As they have shown this is a great way to travel relatively inexpensively.

Well that is the end of this post. The main point about travel and retirement is to set up a budget and stick to it so that you can really enjoy your retirement and not worry about whether you are spending too much. Comments about your retirement plans are welcome.

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Living in an RV and Travelling

September 21st, 2011 ernie Posted in Travel 1 Comment »

You might wonder what does living in an RV and traveling have to do with finance and financial issues for seniors? Well as it turns out lots. I met a buddy the other night who stays in touch with a couple who are in their 60’s that we both know from years ago who have taken a really different approach to how they want to enjoy their retirement.

They sold their home and purchased a small RV, one that is relatively easy on fuel and an RV that his wife can drive. They put all of their things in storage and have all of their mail going to a friend’s place and off they go following the warm weather and the things they want to see from a site seeing perspective. They have been traveling around North America for the past couple of years thoroughly enjoying life. Talk about a life style change and a dramatic shift from home ownership which generally appreciates to living in small quarters in a vehicle that is depreciating! They are taking some risk, but enjoying their life and that is generally what it is all about once we retire.

Life Style Issues

There are lots of financial aspects to this plan and approach and there are also a number of lifestyle issues as well that many people might not be able to deal with. For example, although this couple is very close and they have no kids, were do you go when you are having a disagreement and just need some space. There is no other room in the RV. This is it, you can go to the other end, but you cannot lock the door and get away from your significant other! We all need our space from time to time no matter how much we love each other.

There is also the need to have flowers and pots, to decorate to have stuff you can call your own. Some call it the nesting syndrome. In an RV there is not a lot of room for this sort of thing. Having the flexibility to move around at will and always have a place to live, cook your meals and sleep has a lot of advantages.

Financial Issues of Living in an RV and Traveling

Selling your home and buying an RV has many financial impacts. The proceeds from your home can be invested, generating a nice income that can be re-invested or used to live on. The important thing here is to not touch the principal so that if you decide to repurchase a home, you still have some funds to do this.

The down side of selling your home and getting out of the real estate market is that if homes appreciate, you will be quickly priced out of the market and may not be able to buy back into the housing market. Instead you will have to rent which is fine with many people, however this is something to be aware of.

An RV will depreciate over time as it ages. At some point you will need repairs as well and it becomes a cost area that may be too much to deal with. A house needs maintenance as well, however it continues to appreciate in most cases.

While you no longer need to pay for utilities, taxes and home maintenance, which can be a large expense, you still need to pay for RV camping fees and park fees. Rent in some states in provinces and states can also be expensive as well. If you are planning to do this sort of thing it is important to develop a small spreadsheet and compare all of the costs and savings to help you with your financial part of the decision.

The Practical Side of Living in an RV and Traveling

Unless you have tried living in an RV even on vacation, you may not want to just make this leap in direction that dramatically changes your lifestyle. We suggest renting an RV for at least a month to try it out first. This is a good test to see if you and your significant other can handle the trials of living in an RV. One friend of ours rented out his house for 4 months and moved into his RV and headed south. After 2 months, they decided that they needed to rent a house. The RV was just too small for them! It is not for everyone.

If you have tried this approach, we would really like to hear your comments, the good and the bad.

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