Nimitz News - Sept. 1, 2013
The weekly publication of the aircraft carrier USS Nimitz (CVN 68).
September 1, 2013 Vol. 39 No. 29 INSIDE: WRITING FOR THE ADMIRAL Pg. 8 MUSIC MAN LS3 Shaw ‘supplies’ music on board Pg. 4 NIMITZ NEWS | SEPTEMBER 1, 2013 1 Commanding Officer Capt. Jeff Ruth Executive Officer Cmdr. John Cummings Command Master Chief CMDCM Teri M. McIntyre Public Affairs Officer Lt. Cmdr. Karin Burzynski Media DIVO Ensign John Mike Media LCPO MCC Mike Jones Media Production Chief MCC Gregory Roberts Media LPO MC1 Michael Cole Editor MC2 Jason Behnke Lead Designer MCSA Andrew Price Media Department MC2 Jacquelyn Childs MC2 Ashley Berumen MC2 Nichelle Bishop MC2 Devin Wray MC2 Ryan Mayes MC2 Alexander Ventura II MC3 Renée L. Candelario MC3 Shayne Johnson MC3 Jacob Milner MC3 Christopher Bartlett MC3 George J Penney III MC3 Raul Moreno MC3 Linda S. Swearingen MC3 Jess Lewis MC3 Vanessa David MC3 W. J. Cousins MC3 Derek Volland MC3 Phil Ladouceur MC3 Sam Souvannason MC3 Nathan McDonald MC3 Joshua Haiar MCSN Kole Carpenter MCSN Derek Harkins MCSN Kaitlyn Haskett MCSN Eric Butler MCSN Siobhana McEwen MCSA Aiyana Paschal MCSA Kelly Agee MCSA Victoria Ochoa Nimitz News accepts submissions in writing. All submissions must be in by Friday, COB. Submissions are subject to review and screening. “Nimitz News” is an authorized publication for the members of the military services and their families. Its content does not necessarily reflect the official views of the U.S. Government, the Department of Defense, the Department of the Navy, or the Marine Corps and does not imply endorsement thereby. 2 By Lt. Cmdr. Jeffery Jenkins CREATING RITUALS OF CONNECTION As we prepare for the return home and reuniting with our families, it is time to start considering some “best practices.” Did you ever walk through the front door after a long day and have your spouse greet you by dumping a full garbage can on your head? Sometimes this is what it feels like when we come home and immediately we are deluged with complaints about our spouse’s day. We need to be ready to hear them, but we may need time to get a “garbage sack” and be ready to receive all he or she is going to dump on us. Successful couples do this by creating rituals of connection. These rituals give couples the chance to develop their emotional intimacy, which is the bedrock of a great marriage. These rituals start when they say goodbye in the morning, occur through out the day, to include reconnecting at the end of a stressful day. Here is a small list of rituals developed by John Gottman, Ph.D. Partings: Don’t part in the morning without knowing one interesting thing that will happen in your spouse’s day. Reunions & The stress-reducing conversation: Each spouse takes 10 minutes, at a minimum to talk about their day. Rule: Understanding must precede advice. Admiration & appreciation: Find some NIMITZ NEWS | SEPTEMBER 1, 2013 way every day to genuinely communicate affection and appreciation toward your spouse. Affection: Kiss, hold, grab, and touch each other. Play is good. Make sure to kiss each other before going to sleep and follow the admonition in Ephesians, “Do not let the sun set on your wrath”. Marital Date: Should take place once a week. Think of great questions to ask your spouse (e.g., “How are you thinking of remodeling the bedroom these days?” or “What would be your idea of a great getaway?” or “How are you thinking about your work these days?”). These dates can sometimes be about resolving a marital issue. One additional ritual that has helped thousands of couples is giving your spouse a monthly gift. This may not on the surface sound like a genius idea but there is a twist to it. Each spouse prepares a list of 12 things they would most like to get as a gift. They can be simple, small things, or larger more expensive things. Then each month they each “surprise” the other with something from the list. There is something powerful about the person you love the most in life giving you something that you really want. Creating rituals of connection will bless your marriage and in turn your family. NIMITZ NEWS | SEPTEMBER 1, 2013 3 SOUND OF LS3 Shaw plays his flute in the hangar bay. 4 NIMITZ NEWS | SEPTEMBER 1, 2013 Photo illustration MUSIC T he flute is the oldest known musical instrument in the world and can be traced as far back as 43,000 years ago to the Swabian Alb region of what is now known as Germany. In the 14th century, the term “flute” was first used to describe the instrument that produced sound when air was blown by the mouth across a hole in the instrument creating a vibration. The terms “flautist” or “flute player” is what a musician who plays the flute is referred to. Logistics Specialist 3rd Class Devon R. Shaw, of Kingstree, S.C., assigned to Helicopter Maritime Strike Squadron (HSM) 75, is a classically trained flautist. “I’ve been playing the flute for 13 years,” said Shaw. “I was in the 4th grade when I started playing the flute.” When Shaw was in the 4th grade, a music company that sold instruments came to his school to let the children test them out to see if they were interested in playing any of them. “I looked at all the instruments on the tables: the flute, the saxophone and the clarinet,” said Shaw. “I ended up choosing the flute because my cousin played the flute and I remember him playing it and loving the sound of it.” After hearing of Shaw’s interest in playing the flute his parents purchased him one from the music company and thus began his love affair with the wind instrument. “It’s something I’ve always had a passion for,” said Shaw. “I put it down for a while when I graduated high school and during college. When I joined the Navy I started playing again.” In junior high and high school Shaw played in the marching band, pep band, jazz band and concert band. “Once I got done with college I ran into a rough patch and got laid off my job working construction,” said Shaw. “It cost a lot of money to get my flute repaired and I “ didn’t have the money to keep it in constant repair. When I joined the Navy I ordered a basic beginners flute so I could get back into playing. Eventually I want to get a higher model.” While out to sea, Shaw can be found playing the flute throughout the ship during the night whenever he has free time. “I play in any little corner I can find on the ship,” said Shaw. “Sometimes when I’m feeling bold I go out to the hangar bay to play.” According to Shaw his musical influences are very broad, and include many different genres. “I’m influenced by everything from classical to modern music,” said Shaw. “I don’t like to limit myself to one type of music. I like to learn how to play by ear. If I hear a song I’ll learn to play it and put my own twist on it.” In addition to playing the flute, Shaw also dabbles in writing poetry and hopes to one day incorporate the two art forms. “I’ve always loved music and I’ve always written poetry and songs,” said Shaw. “I want to write my own jazz album and to do a tribute to other art-Shaw ists along with my own work. The flute isn’t always highlighted as much in songs and I want to change that as a way to show people that it can be incorporated into many different forms of music. I would like to start a band if I can find a group of like-minded individuals.” Shaw’s future plans include learning how to play the saxophone and continuing to play the flute. “[Playing the flute] is a hobby, but as long as people like what I’m doing that’s the only gratification that I need,” said Shaw. “Some people tell me they are inspired when they see me playing the flute on the ship. I can’t ever see myself putting it down.” I play in any little corner I can find on the ship. Sometimes when I’m feeling bold I go out to the hangar bay to play. ” STORY AND PHOTOS BY MC3 LINDA S. SWEARINGEN NIMITZ NEWS | SEPTEMBER 1, 2013 5 FAMILY MATTERS B eing deployed we are forced to obtain a thicker skin and learn to make due and comfort ourselves on our own vice having the comfort from our family. We begin to appreciate the small entities that create joy in our lives and develop a stronger love for those who are far away by focusing on what we are truly working toward everyday. Something as simple as a photograph of a loved one or hearing the laughter of a newborn over the phone can make a day at sea brighter than the one before. “My path in the Navy was rough until now,” Yeoman 3rd Class Justin Michael Payan, the Weapons Department’s yeoman, paused as he looked up with a twinkle in his eye and a grin on his face. “My family is my happiness.” Payan found himself enlisting in the Navy’s Delayed Entry Program at the young age of 18 after he moved from his hometown, San Antonio, to Wahiawa, Hawaii,to assist his aunt with her three children while her husband was deployed with the Army. “I’ve always been a family man,” he shyly looked away and laughed. “I grew up in a house with seven other family members, so privacy was hard to come by. My grandfather, Jesus Reza, raised me. He was a sergeant with the Marines so he taught me a lot about respect. He taught me how to handle priorities and responsibilities and that there is always time to have fun, but when it comes to work you have to take your job seriously because that is how you make a living to support your family. That’s the motto I live by today.” Payan took pride in the words he spoke about his grandfather and felt achieved and more connected to him when he joined the Navy. “The day I graduated boot camp was the first time I had ever seen my grandfather cry,” Payan explained. “I took a big oath of responsibility to take charge of the family by following in his footsteps.” Payan married his wife, Angelica, when he was 21 years old and now has an 8-month-old son, Tristen. 6 NIMITZ NEWS | SEPTEMBER 1, 2013 STORY BY MC3 (SW) RENEE CANDELARIO PHOTO BY MC1 (AW/SW) MICHAEL COLE “He just started crawling the other day,” he smiled and shook his head. “When I left he was just three months old. I’ve been receiving videos and pictures of him from my wife a lot throughout deployment.” When asked what feeling he gets when he receives those pictures and videos Payan paused in thought for a moment and responded, “It makes me happy and sad at the same time. It has made me sad knowing that I have missed the beginning stages of my son’s life, but it makes me happy because it reminds me of what I’m working for and that it will all be worth it. I miss my wife and son like crazy. I watch the videos of my son multiple times every night before I go to bed. I feel like the distance from my family makes the love grow stronger.” Payan plans to make a career out of the Navy so he can continue to provide for his wife and son. “I joined the Navy for a reason and I’m not going to fall off that path,” Payan spoke with determination in his voice. “To take care of my family is all I live for. Family comes first. I like to work for my paychecks. It makes me feel like I have accomplished something just to know that if we want to do something or have fun, I have earned it.” When the ship returns home, Payan will have a few months in Everett before he gets ready to transfer his family to San Diego for his next duty station. “My goals for when I get back is to be the best father I can be and the best husband I can be,” he said. “I love the fact that family can depend on family and knowing what I have when I come home always motivates me. Coming home from a deployment to be loved is the best feeling and to be able to see my son smile every morning will start off my day and I wouldn’t change it for anything.” The ship’s deployment is coming to an end and the final stages are fast-approaching. Payan will soon be one of the many Sailors who get to return home to their families and begin a new chapter in their lives. FAMILY MAN YN3 Justin Payan poses with pictures of his family on fathers day. NIMITZ NEWS | SEPTEMBER 1, 2013 7 OFFICIAL BUSINESS STORY AND PHOTOS BY MC3 CHRIS BARTLETT It takes a great team to accomplish the mission, and that statement certainly applies to the team of an admiral and their flag writer. Meet Yeoman 1st Class Jennifer Zeravsky who is the official flag writer for Rear Adm. Michael S. White, commander, Carrier Strike Group 11 (CCSG 11). CONTINUED ON PG. 10 8 NIMITZ NEWS | SEPTEMBER 1, 2013 YN1 Jennifer Zeravsky takes notes for Rear Adm. Michael S. White. NIMITZ NEWS | SEPTEMBER 1, 2013 9 S CONTINUED FROM PG. 8 he attended high school in Bloomington, Ill., competing in basketball, cross-country and track, while also working at a Steak and Shake part-time. “My friends and I thought it would be a good idea to join the Navy but they kind of ducked out on me and I was the only one to join the military,” said Zeravsky. The decision to join the Navy that day was just the beginning of what would become the fruitful and fortunate career that it is today. “I did it, made it fit, and I have been very successful at it,” she said. “It was a great choice.” When Zeravsky went to the classifier to establish her rating, it didn’t take her long to choose a rate. “The classifier said, ‘with your personality you’re a great fit for yeoman’, and I was like ‘roger that, sign me up’,” said Zeravsky. It’s safe to say that Zeravsky has no problem interacting with others, as this interview with her was one of the easiest to accomplish. “I like people, I’m a good people person, and I have a great attention to detail,” said Zeravsky. As a yeoman 3rd class, Zeravsky’s first command was at the Naval War College in Newport, R.I. There she was selected as Junior Sailor of the Year in 2001 and got her first taste of working with admirals and officers. “What started me with the goal to be a Navy flag writer was at the Naval War College,” said Zeravsky. While at the Naval War College, her duties included muster reports, correspondence, leave, evaluations, and everything a yeoman would do, but whenever she got the chance, she would work toward a bigger goal. “When the flag writer would leave, I would have to take their spot,” said Zeravsky. “So I was put right into the position, saw what I could do and aspired to make it a goal as a flag writer.” From there she left to her first sea duty and became a plank owner on board USS Mason (DDG 87) where she successfully made yeoman 2nd class. While serving on board Mason, she would marry the love of her life, who believe it or not was also a former Yeoman she met while serving in Newport, R.I. Her progress and professionalism was noticed as she was selected as Junior Sailor of the Quarter in 2006. She also served as ship secretary and legal yeoman. She then was hired as an executive assistant to Force Master Chief (FORCM) Johnny Walker at Naval Personnel Command (NPC) in Millington, Tenn., followed by FORCM Daryl Charles. While working at NPC she attended a five-week long yeoman “C” school to finally become a flag writer. She graduated “C” School and earned her NEC 2514 in April 2006. In 2008 her husband and she would become the proud parents to baby boy, John Robert Zeravsky. That very same year, she was called upon by Master Chief Petty Officer of the Navy (MCPON) Joe R. Campa, who asked if she would like to be his flag writer. While at The Pentagon she also worked as flag writer for MCPON Rick D. West in 2009, who pinned her to petty officer 1st class. Then the opportunity came to work for her first admiral, Rear Adm. Joseph F. Kilkenny, followed by Rear Adm. Donald P. Quinn, both at Naval Education and Training Command in Pensacola, Fla. Which brings us to the present where she is with CCSG11 for her first sea duty as a flag writer for Adm. White on board Nimitz. “Adm. White is great,” said Zeravsky. “He is very dedicated; he cares about the people and the Sailors. He is all about the mission but he is all about making sure that his YN1 Jennifer Zeravsky answers the phone as Rear Adm. Michael S. White. works at his desk 10 NIMITZ NEWS | SEPTEMBER 1, 2013 YN1 Jennifer Zeravsky takes notes for Rear Adm. Michael S. White. people are good too.” According to Zeravsky, as the flag writer you plan the admiral’s day and days to come even months ahead of time. Flag writers also help with speeches, flag correspondence, personal letters, FITREPs, and protocol duties for the admiral. “Knowing that I assist my boss and the strike group with day-to-day operations, just knowing that you are part of it all, where they depend on you just as much as I depend on them,” said Zeravsky. “It’s like I am a piece of the big puzzle.” Being a flag writer is all about being flexible. You have to be ready for changes at a moments notice. “You just have to be ready to roll with the punches, and that right there is what I live for,” said Zeravsky. Her job doesn’t stop at being a flag writer, as she also spends time with junior Sailors and serves as the Sexual Assault Prevention Response victim advocate for CCSG-11. “I’m a flag writer, a first class petty officer, and have no Sailors under me like most of my peers. I’m not an LPO, so my way of leadership is through mentoring and taking care of Sailors day to day,” said Zeravsky. For any Sailors who are curious about what a flag writer does or how to become one, Zeravsky is always available for any questions. “I feel like a lot of people don’t know what my job is so it’s fun to explain that to people especially for the yeomen who can do this in the future,” said Zeravsky. Any yeoman can be a flag writer. You just have to have the dedication, endurance for long hours and be dependable to the boss. The boss has to be first. The flag writers motto is “Sailor first, yeoman by trade, flag writer by choice.” “When you are handling something for the admirals or MCPONs, then it has to be done now and it has to be done right,” said Zeravsky. Zeravsky has been in the Navy for 14 years with seven of those years as a flag writer. Her goal is to make chief petty officer. “With no question, I wouldn’t have made it this far without the support from my husband,” said Zeravsky. “He is my rock.” They will be celebrating their tenth anniversary this September. “My husband and I are very well organized,” said Zeravsky. “He comes back to me saying that I am more organized at work than I am at home and that’s something I am working on. I think it is perfectly normal because I feel that you can only handle so much on your plate at once. You have to know how to handle your priorities and life, balance is very important.” Her dream after the Navy is to move with her husband and son to Heyworth, Ill., where her family resides, she being the oldest of 23 cousins, and work for State Farm Insurance Headquarters where coincidently most of her family works too. NIMITZ NEWS | SEPTEMBER 1, 2013 11 SURRENDER Story by MC3 Phil Ladouceur Adm. Chester Nimitz signs the articles of surrender, ending hostility with Japan. T he nature of the weather conditions in Tokyo Bay on Sept. 2, 1945 depended on the perspective of the observer. An American present on the quarterdeck of the battleship USS Missouri thought the day hot even at 8 a.m. A Japanese diplomat present for the ceremony that ended hostilities between his country and the Allies remembered it as being a cool day for the time of year. And just as the weather depended on the one perceiving it, the paths the various participants had walked toward this day surely colored their perceptions of it. Lt. Gen. Jonathan Wainwright had most recently been liberated from a Japanese prisoner-of-war camp in China, but his journey had begun farther south. He had been the man left in command of Corregidor when Gen. Douglas MacArthur had retreated to Australia. It had been left to Wainwright to surrender to the Japanese on May 6, 1942. MacArthur had made good the promise to return to the Philippines in triumph. To him had gone the glory and headlines. But Wainwright had spent the intervening years imprisoned, his high rank earning him no special treatment. He was shrunken, leaning heavily on a cane, eyes sunk in their sockets, cheeks hollow, hair gone all 12 NIMITZ NEWS | SEPTEMBER 1, 2013 white. As bad as the treatment he had received, he had spent three years certain that he was considered a disgrace for surrendering Corregidor to the Japanese. When MacArthur took his arm at their reunion and told him that he was considered a hero Wainwright burst into tears. He would later be awarded the Medal of Honor. He was then told that he would be standing on the quarterdeck of the Missouri during the ceremony as a guest of honor. As Wainwright came on the battleship that day, he heard a voice hehad not heard since the early 1930s, when Wainwright was a lieutenant colonel and the other a commander. “Hello, Skinny!” said Adm. William Halsey, welcoming Wainwright onto his flagship. Halsey had fought the war with a philosophy that had become famous: “Hit early, hit hard, hit often.” He had been returning to Pearl Harbor on Dec. 7, 1941 with the Enterprise when he received news of the Japanese attack. Returning the day after, he made a remark that summarized his attitude toward the Japanese. “Before we’re through with them, the Japanese language will be spoken only in hell,” said Halsey. The remarks did not soften as the war progressed, and even for Courtesy photo TERMS OF “We are committed,” he said, “to see that the Japanese people are liberated from this condition of slavery. To the Pacific basin has come the vista of a new emancipated world. Today, freedom is on the offensive, democracy is on the march. Today, in Asia as well as in Europe, unshackled peoples are tasting the full sweetness of liberty, the relief from fear.” MacArthur understood that peace could not be achieved through vengeance and humiliation. This understanding would inform his efforts to rebuild society, and was shared as well by Nimitz. He had issued detailed instructions to those under his command when he learned of Japan’s intention to surrender. “With the termination of hostilities against Japan, it is incumbent on all officers to conduct themselves with dignity and decorum in their treatment of the Japanese and their public utterances in connection with the Japanese,” said Nimitz. Years earlier, a young, recently commissioned Nimitz had been in Tokyo not long after Adm. Heihachiro Togo had led the Japanese navy to victory against the Russian navy in the Battle of Tsushima, considered one of the greatest naval battles in history. At a garden party, Togo, at that time possibly the most famous naval officer in the world, was approached by the young Nimitz. Invited to join a collection of junior officers, Togo accepted. Speaking fluent English, he shook hands with all present, and the memory of the modest and polite admiral would stay with Nimitz, who would later attend Togo’s funeral. In 1958 Nimitz would even help raise funds to restore Togo’s flagship, the Mikasa. He would never forget the atrocities of the Japanese during their imperialist expansion or those committed against the Allies. But he could set that to one side and respect the accomplishments of Togo and appreciated the naval heritage of the Japanese. He could look for common ground on which to build. With the signing of those documents, World War II was over. In the years to come, Japan would be transformed from a militant totalitarian regime into a peaceful and democratic society. In the war, the United States and Japan had been enemies. After, they became partners in the peace, and our bitterest foe of the war was transformed into one of our strongest allies in the Pacific. For more information about the surrender on the Missouri, visit www.history.navy.mil Courtesy photo the time they stuck out as being racially insensitive. On at least one occasion, the New York Times summarized his remarks by simply stating that they were unprintable. For Halsey and many of the others, watching the Japanese officials approach the Missouri that day inspired nothing but contempt. It was plain on their faces. When Mamoru Shigemitsu, the Japanese foreign minister, wearing an artificial leg, began to board the ship, he had difficulties. “With savage satisfaction everyone watched Shigemitsu struggling up the steps,” said Theodore White, a reporter who witnessed the ceremony. Toshikazu Kase, secretary to Shigemitsu, compared the eyes of the Allied representatives pointed in his party’s direction with a physical attack. “A million eyes seemed to beat on us with the million shafts of a rattling storm of arrows barbed with fire,” he said. “I felt their keenness sink into my body with a sharp physical pain.” There can be no doubt the anger felt and expressed by the Allied representatives was entirely understandable. The Empire of Japan had fought a war with modern technology but with medieval morality. The suffering of Wainwright was not unique. His experiences—and worse—were replicated in the hundreds of thousands, perhaps millions. Soldiers and civilians alike had been subject to cruelties ranging from indignity to atrocity. At 9 a.m. the ceremonies began. Two copies of the surrender were to be signed. One, leather-bound, was for the Allies. The other, for Japan, was bound in canvas. Overhead was the American flag that had been above the White House on Dec. 7, 1942. Beneath were the flags of MacArthur, signing as the Supreme Commander for the Allied Powers, and Adm. Chester Nimitz, who was there to sign as the representative of the Unites States government. As MacArthur spoke to begin the ceremony, the Japanese party listened, some struck by the even-handedness of his remarks, others imagining the outcome if the situation had been reversed. Kase was amazed by what he heard. “Here is a victor announcing the verdict to the prostrate enemy,” said Kase. “He can exact his pound of flesh if he so chooses. He can impose a humiliating penalty if he so desires. And yet he pleads for freedom, tolerance, and justice. For me, who expected the worst humiliation, this was a complete surprise.” As they began to sign, some of the Japanese officials looked at the assembled representatives of the Allied nations. Russian, Dutch, Australian, British, Chinese, New Zealanders, and Canadians, all standing alongside the Americans. For almost the first time, as if coming out of a dream, some of those officials realized the enormity of the forces they had been fighting against. It had truly been Japan against the world. “Today the guns are silent,” said MacArthur after the signing. “A great tragedy has ended. A great victory has been won. The skies no longer rain death—the seas bear only commerce—men everywhere walk upright in the sunlight. The entire world is quietly at peace.” NIMITZ NEWS | SEPTEMBER 1, 2013 13 15 Finance Drawing Down in Retirement A Fun and Easy Guide Cmdr. Matthew Miller N33/N35 Sub Ops/Future Plans Introduction In this article, I’m going to summarize a new type of fund that Vanguard and Fidelity are offering, go through some really powerful mathematical facts, and summarize some very good general “life philosophies” that are directly applicable to personal finance as discussed in Secrets of the Millionaire Mind by T. Harv Eker. The stock markets have started off like a rocket this year and are now sideways with the potential to gyrate quite wildly. You can read all sorts of predictions for/ against oil, gold, commodities, the Federal Reserve’s plan on Quantitative Easing, the Japanese Yen, China’s slowing economy, and of course the Euro debt crisis (yes, it’s still going on). I think I’m going to move all my retirement money out of the stock market. Just kidding. That would be just about the worst thing to do….other than not funding your retirement accounts (401(k) and/or TSP, and IRA) in the first place. Not funding them is without question the worst thing you can do, but I’m sure everyone is doing the best they can there. Remember, in a down market, you are buying more shares if you are buying in on a regular basis (dollar cost averaging), so don’t get spooked and stay on track with your longterm investing plan. 14 NIMITZ NEWS | SEPTEMBER 1, 2013 Drawing Down Your Portfolio in Retirement This portion is applicable to everyone even if you’re decades away from retirement. You may not have accumulated all of the assets you need, but it’s never too early to start thinking about how you’re going to draw down that nice nest egg you’ve saved up. This is a general discussion on some relatively new investment products being offered by Fidelity and Vanguard (and I’m sure will soon be offered by just about every major mutual fund family). Here’s how this works. A general rule of thumb in spending down your portfolio in retirement is to deplete no more than four percent of your assets your first year and use that amount as a base for subsequent years (plus inflation). For example, if you have a $1-million portfolio, then you should pull out a maximum of $40,000 your first year of retirement. This is a rough rule of thumb and everyone’s situation is unique, but this is a reasonable rough estimate. The really cool thing about what Vanguard and Fidelity are doing is they are establishing mutual funds that will do this type of thing for you - it’s the exact same idea as the Target Retirement Funds, but working in reverse. Instead of picking a year when you are going to retire and having the funds manage your asset allocation for you, you pick either a year you want to exhaust all your money (Fidelity model) or you pick a percentage of your assets you want each year (Vanguard model), and the mutual fund will then do all the work for you in terms of asset allocation and distributions. Note – you will still need to manage your taxes, required distributions, etc., so this won’t do everything for you, but it goes a long way towards it. Fidelity Model You select a target date (8-28 years out) and receive monthly payments until the money is exhausted. Payments are set for a year at a time and may rise (or fall) in subsequent years depending on market performance and payout rates. You shouldn’t necessarily put all your money in this type of fund because you could potentially outlive whatever time horizon you picked; however, it’s a great tool for managing expenses over an expected time period (like your travel budget for the next 20 years). Vanguard Model You select a percentage of assets you want (3-7 percent). Vanguard uses their low cost index funds to generate the return and provide the payouts. This is more appropriate if you don’t want to use all your money, but live on the income generated from your portfolio (better for planning to leave money to your heirs or hedging against a major medical expense as you get older). Note that neither of these models guarantees a return or protects you from outliving your money should you live a super long time. The only way to do this is through an annuity (like social security or an insurance product). Powerful Mathematical Facts In each of these scenarios, I am assuming an eight percent annual return (tax deferred), which is two percent BELOW the long run average annual return for the stock market (so it is a reasonable assumption for a long-term investment in an appropriate asset allocation). Here are some more compounding interest comparisons: • How much will be the difference in what you have at age 65 if you start saving $100/month when you are age 22 versus age 32? This is a difference of $12,000 saved ($100/month X 12 months/year X 10 years). If you start at 22, you will have over $450,000. If you start at 32, you will have less than $195,000. That is a $255,000 difference on just $12,000 more invested! If you are in your 20’s and haven’t started saving yet, I hope that extra Starbuck’s Latte was worth it! • If you want to have $1-million in your portfolio by age 65, how much per month do you need to save? If you are 25, you need to save around $300/month. If you are 35, you need to save around $700/month. If you are 45, you need to save around $1,300/month. If you are 55, you need to save around $5,500/month. Sure is better to start earlier, isn’t it! Don’t forget that a $1-million portfolio is only going to generate you around $40,000 per year, so most of us will need a lot more than $1-million to remotely match our current standard of living (because most of us live on a lot more than $40,000 per year right now). These mathematical facts are provided to hopefully get you moving or encourage you to increase what you are currently saving and investing. Life Philosophies from T. Harv Eker – Secrets of the Millionaire Mind – Mastering the Inner Game of Wealth Here are some key takeaways from a pretty good book. The general theme is (in my words) that if you want to be successful in life, it all starts in how you mentally approach life. If you are interested in these, then I encourage you to read the book. Here are some good thoughts: money. Unsuccessful people either mismanage their money or ignore it entirely. You must acquire the habits and skills of managing money. The habit of managing your money is more important than the amount. If you start small, it will grow. Instead of saying “when I have plenty of money, I will manage it,” you should say “when I manage my money, I will have more.” It doesn’t matter if you have a lot or a little bit of money, what matters is you immediately begin to manage it and you will be in shock at how soon you get more. • If you manage your money, you can become financially free on a relatively small income. If you mismanage your money, then you will never be financially free – even on a huge income (do you know any doctors, lawyers, accountants, lobbyists, etc. that have credit card debt, limited savings, expensive car loans, etc. and will end up in financial trouble as they age? – I do). • Either you control money or it will control you. To control money, you must manage it. Money is a big part of our lives, so when you get your finances under control, the rest of your life will soar. • Financial Freedom is the ability to live the lifestyle you desire without having to work or rely on anyone else for money. • Successful people think long-term: they balance spending and enjoyment today with investing for freedom tomorrow. You need to set aside money for current enjoyment - if you save everything, then you will not be able to maintain a savings plan – the key is balance and don’t ignore tomorrow. • Successful people work hard, save, then invest their money so they never have to work again while others work hard and spend all their money, so they have to work hard forever. • The biggest mistake most people make is waiting for the feeling of fear to subside or disappear before they are willing to act. These people usually wait forever. This was just a sampling of the information in the book. If this type of thing interests you, I encourage you to get the book. • The number one reason people don’t get what they want is they don’t know what they want – you need to consciously think about and figure out what you want out of life. • Successful people focus on their wealth/net worth while others focus only on their income – your income ultimately is the least important aspect of wealth because your wealth/net worth is determined by your ability to save and invest. If you earn a lot of money, but don’t keep any of it, you will never build wealth. • Where you choose to focus efforts, energy flows, and that will improve – if you proactively manage your money and track your expenses, savings, net worth, etc., then they will improve. Have you ever heard, “what gets measured, gets done.” I encourage you to track your net worth on a quarterly basis (so does T. Harv Eker)–it will improve if you do track it! • The single biggest difference between financial success and financial failure is how well you manage your NIMITZ NEWS | SEPTEMBER 1, 2013 15