For some years now, I’ve been troubled by so many people I know refuse to consider how they are going to secure their future.
It’s a problem that extends far beyond my own personal circle, of course, and I fret about all of the people in the world who can’t make the best decisions simply because they’ve never had enough information and training.
In America, part of the problem lies in the most saintly of family values: trying to provide a better life for our children than we had ourselves.
The disconnect comes from the definition of just what a “better life” is. Based on observation, the current viewpoint is that it means children get more “things”.
Rather than go through a long list of redundant and/or excessive items purchased for kids (starting at baby level and going on until…well, whenever they finally leave home), let me explain why this is self-defeating.
During the time the kids are being raised, most parents find it difficult to put money away. In savings, in investments, or simply in banks, there just never seems to be enough. Or the amount doesn’t seem to be enough to make it worthwhile.
But it’s not about worthwhile, it’s about living a long life. Given enough restraint in spending on kids or personal wants, that money grows exponentially over time and ultimately provides the opportunity to retire without stress.
Really, which do you think provides a “better life” for kids: lots of stuff while they are growing up or freedom from supporting their parents when they’re grown up? (Note, this is not to say they shouldn’t call their parents to say “Hi” regularly.)
The challenge for the single person is all about restraint. Without someone else to raise, a single person can decide to be more or less aggressive in their budgeting and investing.
It’s not about being cheap. For example, when I was earning a comfortable salary, I spent frequently on my friends and family (gifts, flowers, dinners, trips). But I always made sure to also put some money to work for me. When my income dropped dramatically, my spending reduced to Hallmark cards and the occasional gift cards.
Even so, I waited too long to get started investing and had to take some major risks to get myself back on a reasonably secure plan for retirement.
The fact that so many people don’t even take the time to see where they stand with respect to their financial future worries me. It was the main reason my friend and I wanted to build a training program for young people (high school and college) that would give them the basic tools and information they desperately needed to ensure they would one day be able to rock on the porch of their own home.
Sadly, it appears that for us two middle-aged men, our ambition is not matched by our implementation skill. Thus, I am left with just worrying and trying not to nag (or make paranoid) my friends and family about planning for their futures.
Because, while it’s true you can’t take it with you, it should be everyone’s goal to at least get there on their own.