5 Quick Tips to Ensure Your Money Isn’t Misplaced or Mismanaged

Steve McDonald By Steve McDonald, Bond Strategist, The Oxford Club

Retirement Planning

During my stockbroker days, an old family friend asked if I would take over management of her bond portfolio.

She said she had $87,000 in tax-free bonds at home and didn’t feel she could handle the details anymore. She was well into her 80s at the time.

Back then, you could hold your bonds in paper form. It’s unheard of in today’s digital money world, but it used to be an option. You could have the actual printed bond sent to you, clip the “coupons” from the bottom, take the coupons into a bank and collect your interest in cash.

It was very common among Depression survivors who didn’t trust anyone, especially banks and brokerages. You couldn’t blame them.

When I arrived at this woman’s home, she literally handed me a paper bag full of bonds. I sat down to count them so I could give her a receipt, but she said she was on her way out and told me I could drop off the receipt another time.

She had $87,000 worth of bonds, and she didn’t want me to count them in front of her or give her a receipt?

It seemed a little iffy at the time, but I had known this person all my life. She was a lifelong friend of my father, so I took it as a huge compliment that she had that much trust in me.

The next morning at the office, I opened the bag to find $197,000 in tax-free bearer bonds.

Bearer bonds don’t exist anymore – and for good reason. Anyone who held them could cash them in at any time. Since they were set up to pay “the bearer” of the bond, no ID was required either.

In essence, this was $197,000 in cash in a paper bag.


My father’s friend was no slouch. She and her husband ran a very profitable business, and they were worth millions. She didn’t make mistakes with her money.

After my hands stopped shaking, and after my manager stopped lecturing me for doing something as stupid as not giving her a receipt, I called to inform her of my error.

She laughed – and in her usual “no nonsense” authoritative manner said, “I told you I couldn’t handle this anymore.”

The fact that she could admit she was unable to manage the details of her finances made her a rare commodity among retired people.

In fact, she was and still is the exception!

Gerontology researchers are reporting that losses from theft, mismanagement, and misplacement of money and accounts are mounting in the retired population.

And the losses are due to what they call the “myth of financial independence,” or the belief that we can manage our financial affairs indefinitely.

The Center for Retirement Research at Boston College reports that – despite the fact that our financial decision-making ability peaks at age 53 – 60% of its survey respondents say they’d witnessed a friend or family member lose their financial independence. That said, only 9% of older people surveyed believe they’ll ever lose their ability to manage their money affairs.

As we age, our reluctance to turn over control or accept help with our money activities isn’t just about stubbornness or a refusal to admit that we won’t be able to manage our affairs. In many cases, we don’t have anyone to lean on, we don’t want to be a burden, and/or we don’t trust our financial advisors.

And when you consider that statistics indicate the people most likely to exploit a senior or incapacitated person are friends, relatives, neighbors, caretakers, attorneys and bank employees, it’s no wonder we are hesitant to ask for help.

A complete “wealthy retirement” is about more than just saving and investing. In addition to exercising, dieting and maintaining a social network, it also requires us to take steps to ensure our assets don’t fall through the cracks or get stolen.

And the possibility of both happening increases tremendously as we age.

Here are a few things we can do to limit the potential damage of losing our edge…

  • Make sure your will and estate plan are up to date.
  • Keep an up-to-date list of all your holdings and income sources (include account numbers).
  • Don’t forget about passwords and pins. Since most banking and investing is now done online, you’ll want whoever picks up for you to be able to access them.
  • Write up your spending plan – including whom you pay and how much you spend each month.
  • Pick a trusted advisor who can take over for you if necessary. It doesn’t have to be your child. You might even consider the help of an attorney for this step, which would give you legal recourse if something goes awry.

The good news in all of this is that if you’re in your 80s and still able to pay your bills and manage your investments… there’s a good chance you won’t need help.

But, in case things change, you don’t want to be in a position where you mistakenly give away $197,000 to a friend’s son.

Make your preparations now and save yourself the worry.

Good investing,

Steve