Save For The Future But Live For Today

In late August of 2012 (one day after my birthday) my wife learned that she had breast cancer (not the best birthday present I have ever received). At the time, the news was devastating and very depressing. Since then, however, we have come to realize that the diagnosis is not the death sentence we initially thought it may be. Just hearing the C-word, though, is enough to make a person feel that the end is nigh, and the diagnosis is something that can give even the hearties among us reason for pause.

Both, my wife and I are older parents (though my wife will tell you that she is twenty-nine and holding :-D), and the first thought that occurred to me when we received the news was: “Do we have enough saved to ensure our child’s future? “ Sadly, the answer was a resounding “no!” The irony is that our little girl is an in-vitro baby who we were fortunate enough to produce after our very first in-vitro procedure. After she was born, however, my wife and I spent a small fortune trying to produce a sibling for her – but to no avail 😥 . So, after seven rounds of Intrauterine Insemination (IUI) and seven rounds of In-Vitro Fertilization (IVF), we ended up with one super-terrific little girl, but no siblings for her.

As anyone who shares similar experiences knows, the treatments are very expensive, and if we had not pursued the infertility treatments my wife and I would be sitting on a pile of cash right now — but, then, we would not have our beautiful little girl either. Life is full of risks and our choice to pursue infertility treatments is not one that I regret. The challenge for us now, however, is to ensure that we have enough money to provide a bright future for our one and only little princess – and that has been much harder to do lately.

Though we were lucky enough to have survived all of the end of the world predictions for December 21st, 2012, we’re still living in some very challenging times. We’re still facing fiscal cliff issues, entitlement issues, tax issues and a congress that can’t seem to focus on anything other than finger pointing (remember the opposite of progress is congress). As a result, most investors are in a quandary as to where to invest because the future seems so opaque.

Fortunately, though not all is lost. For me, the best move I made was to move a majority of my investment dollars from equities to bonds. At the time, I felt that the prudent thing to do was to move from volatile to less volatile, more boring and more dependable securities. Though there are still risks involved (as with most things in life), I like like collecting my coupon (dividend) payments each month while my principal investments remains constant.

Other than bonds, I’m also looking to make and investment in Vanguard’s Long-Term Tax-Exempt Fund (VWLTX). The fund is a conservatively managed municipal invest fund that has averaged an annual dividend yield of around 3.8% since July 2011. The dividends are paid on a monthly basis and the fund has managed to produce an annual return of 8.08% in 2012. Since its inception in September of 1977, the fund has produced an annualized return of 6.21%. Not bad considering the entire muni market was set to crash and burn in 2011.

Don’t get me wrong, states and local governments (and our country, as a whole) are still facing some considerable headwinds, but the future is beginning to look a little brighter. Our decade+ long wars in Iraq and Afghanistan are coming to an end, corporate profits are still holding-up rather well and the comet did not hit us on December 21st of 2012. All-in-all, we’re doing pretty well.

And, while on brighter subjects, I’m beginning to feel as though my wife will do pretty well, too. Though it’s still a nasty disease, it’s not the killer it once was. The diagnosis of, and the treatments for, cancer have come along way – especially in the past decade (more on that in my next post). Until then, the lessons I want to take away from our recent experiences are these: Life is short and none of us can truly know what the future holds in store – whether in our investment strategies or in our personal lives – and it is a gift that we should not take for granted. Most importantly, people and personal relationships – not material things and/or stuff – are the most important and valuable commodities we have in our lives. When planning your investments be sure to invest in your personal relationships with friends and loved-ones. Though we must try to provide for our futures, we should not be self-imposed slaves to the future. “Life is what happens while you are busy making other plans” (John Lennin). So, plan for the future – a bright one at that – but do not forget to live the life you are given today.

Disclosure:  I do not own shares of VWLTX and do not plan to purchase shares within the next three trading days.

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