I was driving past a large cornfield the other day—I live in Nebraska after all—and had a few thoughts on sowing and reaping. We’ve all heard the phrase “You reap what you sow.” That’s true, but it doesn’t tell the whole story. Yes, if you plant corn, you’ll get corn. No surprise there. But there’s also an element of time and quantity. Time in the sense that it takes time for the seeds you plant to germinate, grow and yield their crop. Quantity in the sense that you often yield much more than you plant. With corn, for example, 10 pounds of seed typically yields 7,280 pounds (130 bushels per acre) of corn. So we reap what we sow, but it takes time and the output usually exceeds input.
As I’m sure you’ve deduced, I’m not talking about corn. I’m talking about living a secure, purpose filled, meaningful life. You won’t get a crop that you didn’t plant. If you want security and meaning, you need to plant “seeds” that will yield those things. Seeds that yield financial independence. Seeds that yield quality relationships. Seeds that yield a healthy body and mind. Seeds that yield meaningful work. Seeds that yield unique experiences and lifelong learning. Seeds that yield satisfaction, contentment, happiness and fulfillment. And once those seeds are planted, you need to nurture them just like the farmer waters, fertilizes and weeds his crop. And then one day, you will have a bountiful harvest. Some of your crops will mature quickly. Some will take more time. Either way, don’t wait. Start planting today with tomorrow’s harvest in mind.
How are those 2020 plans working out for you? In crazy and uncertain times, it’s easy to get sidetracked. To feel helpless and stressed. To give up or get discouraged. To ask: “What’s the point?” To pick up bad habits. And even to actively do things that reduce your odds of long-term retirement success. Things like:
- Not being intentional with your time and money
- Not exercising
- Eating badly
- Drinking too much
- Not learning new things
- Having too much debt
- Neglecting your marriage
- Not investing in your friendships
- Associating with the wrong people
- Allowing yourself to get bitter over circumstances
- Taking life for granted and assuming it will go on forever
- Getting stuck in routine
- Comparing yourself to others
- Not taking some “at bats.”
- Letting the headlines derail your investment strategy
- Doing nothing instead of doing what excites you
- Not taking care of your mental and emotional health
- Caring too much about what others think
- Mimicking others rather than deciding what you really want out of life
- Having an external vs. internal locus of control (i.e. “Everything is out of my control.”)
Are you struggling with anything on that list? If so, what’s one thing you can stop doing this week because it is holding you back and harming your chances of a successful life and retirement? What’s one thing that needs to go because it doesn’t align with what you want your life to be? Don’t let a difficult year derail all your hard work. It’s time to weed the proverbial garden.
Well, we just past the halfway point of 2020. Five months to go. Time for a mid-year financial checkup. I’m a big proponent of doing an annual review each January, but this year has been a bit…unusual…so I encourage you to look things over now and make sure that your retirement plans are still on track. Here are a few things to focus on as well as a free Financial Checkup Checklist to help.
Investments. If you’ve been afraid to open your statements or log in to your accounts, it’s time. Look at where you are, but more importantly, look at where you’ve been. Markets plunged and then rallied, so you’ll see volatility for sure. But if it’s more than you can stomach (or more than your plan can handle), it’s time to rethink your risk and allocation.
Work. If you lost your job or changed jobs due to the pandemic, you need to re-run your retirement plan and make sure that it still works. A new job means a different income, different benefits and a different 401k. Those are all variables in your plan. If they change, your timeline for retirement might change.
Savings. It’s natural to get defensive in the face of uncertainty. When markets are plunging and the economy looks shaky, it’s easy to quit saving and investing. I see it all the time. It’s one thing if you lost your job or your income shrank considerably. But if you’re still working and you just quit saving out of fear, turn those automatic investments back on.
Budget. Did your spending change during the lockdown? Mine sure did. When you have no idea how bad a downturn will get or how long it will last, it’s natural to reevaluate your spending and reconsider your wants vs. needs. Ultimately, that’s a good thing. Nothing impacts your ability to retire quite as much as your retirement budget. The leaner you can make it, while still doing the things that are important to you, the better off you’ll be. Cut the fat and optimize your spending for the lifestyle you want. Here’s a budget worksheet to help.
Debt. Divide your total debt by your income. That ratio should get smaller over time. According to research by Charles Farrell, your Debt/Income ratio should be around 1.0 by age 45 and zero by age 65. How are you doing? What would your finances look like if you were debt free? How would you feel? What would you do with the extra money? How soon could you retire? Make a list of your debts and put together a plan to pay them off. And if you have a mortgage, consider refinancing while rates are at historic lows.
Insurance. Review all your coverages, but pay particular attention to your life insurance. The pandemic is a good reminder that unexpected things happen. If your family is depending on your income, then you need to have a plan to replace that income if you die. A general rule of thumb is to have 7 to 10 times your annual income in life insurance, but you should meet with a trusted adviser to discuss the specifics of your situation.
Legal affairs. Again, the pandemic is a good reminder that unexpected things happen. Make sure that your will, powers of attorney and estate plan are accurate, up-to-date and reflect your current wishes.
One more thing before I go. Don’t just focus on your finances or legal affairs. One of the most important ingredients to a successful retirement is to decide what you really want out of life and to start taking those things very seriously. COVID-19, while terrible, has likely helped you in that regard by forcing you to reexamine your habits, routines, priorities, purpose, relationships, finances, lifestyle, career and any number of other things. What have you learned about yourself? Don’t just ignore those lessons and slowly ease back into your pre-pandemic rut. Design a lifestyle—home, work, leisure—that reflects your priorities and is faithful to what you want out of life. You still have plenty of time to do that before the end of the year. Redeem 2020 by turning the disasters and difficulties into a better, more secure, more fulfilling life.
My family and I just finished a 4,200-mile, 7 state road trip. A few nights we stayed in hotels. More often we camped. Sometimes camping was a luxury tent with a fireplace and running water (Thanks Under Canvas!). Sometimes camping was our trusty tent deep in the backcountry of a National Park or on the banks of the river we were rafting. This isn’t our usual trip, but after cancelling a trip to Italy in March and after being in lockdown mode for several months, we wanted to get out of the house. And while 2020 is a terrible year in most regards, it seemed well suited for a good, old fashioned road trip. So we plotted our itinerary on Google Maps, made a few bare bones plans, loaded the car and hit the road. Here’s a bit about the trip and what things are like out there right now. Hopefully, you can use it as inspiration for a Kerouac-style adventure of your own.
We’re trying to get our daughter to all 50 states before she graduates from high school, so any trip in the US usually involves trying to check off a new state or two. This time we got 3: North Dakota, Montana and Idaho. On our way north, we visited Badlands National Park in South Dakota as well as Mt. Rushmore where we stayed for a night. We left early the next morning and drove to Theodore Roosevelt National Park in North Dakota. This is the rugged land where Teddy went to disappear after losing his mom and his wife on Valentine’s Day 1884. The campgrounds are closed due to COVID, so we got a backcountry permit, which is basically just telling them the dates you’ll be there and what trailhead you’re departing from, so they know where to look if you don’t come back. We shouldered our packs, hiked in several miles and then found a good spot a few hundred yards up a hillside and away from the trail. Sunset, moonrise (the picture at the top of this post) and sunrise the following morning were all pretty amazing. We didn’t see any other people, but we had three buffalo visitors while we were watching the sunrise.
After exploring the park a bit the following day, we drove to Whitefish, Montana where we enjoyed the town for a few days and did some hiking in Glacier National Park. From there we drove to Oregon where we met up with friends from Washington, rented two whitewater rafts and started a four-day river rafting trip down the Wallowa and Grande Ronde rivers. The first few hours were a little hairy as we learned to read the river, row the boats and avoid large boulders, but it quickly became second nature. Each day consisted of rafting for about 15 miles and then finding a place on the shore to camp. Like us, our friends enjoy a good meal, so we left the dehydrated meals at home and instead had things like Dutch Oven lasagna, breakfast burritos with all the fixings and fish tacos made with freshly caught trout. We’d talk and play games around the campfire and then get up the next day, load the boats, shove off and do it again. It was a really fun experience. After reaching the pullout, we loaded the cars and drove to a BNB in Joseph, Oregon for some much-needed showers and a few days of hiking and exploring. That’s where we parted ways with our friends and started heading towards home via Hells Canyon and Craters of the Moon National Monument in Idaho and then Yellowstone National Park and Grand Tetons National Park in Wyoming before eventually making it back to Nebraska.
In case you’re wondering…
Was everything busy? Not terribly so. International travel is shut down, so more people are choosing road trips for sure. But many others are choosing to stay home altogether, so it didn’t seem overly busy, with the exception of a few National Parks that are always busy regardless.
Are the national parks open? Yes and no. Most parks are at least partially open, but many have closed their campgrounds and lodges. Visit www.nps.gov to check on a park your considering. And if you don’t have a National Park Pass, you need one. It’s an incredible deal. $80 per year if you’re under 62 and $80 for life if you’re over 62.
What about gas stations, hotels, restaurants, etc.? All open for the most part, but they may have reduced capacity or certain requirements like wearing a mask.
Did you wear a mask? Yep. Anytime we were using the gas station, checking into a hotel or generally around the public, we wore a mask to try to limit the risk that we’d catch anything or spread it if we’re asymptomatic. Most places have signs requiring it or at least strongly requesting it.
How much can/should you plan? We made reservations for things like our raft rental and some of our lodging. It was pretty bare bones, however. We often made hotel reservations in the car by looking at Google Maps and figuring out how far we’d get that day. We never had a problem finding anything.
Tips for staying safe
Don’t go if you’re sick. Sometimes the symptoms of COVID are mild, sometimes not. We traveled to some pretty secluded places and didn’t want to be stranded far from medical care. If you’re not feeling well, stay home.
Watch for travel restrictions. We traveled through a number of states, so we checked ahead of time to make sure that they didn’t have any travel restrictions. Just google “current state travel restrictions.”
Design the trip with social distancing in mind. We chose to drive our own car rather than fly. We chose camping where we could instead of hotels. We wore masks when we were around people. We met up with friends who we knew have been social distancing for several months. We chose places that were secluded and activities that were solitary. There are plenty of ways to have a great trip and still be a little cautious.
Bring along some PPE. We brought masks, disinfectant wipes and hand sanitizer. Again, a bit of caution is a good thing.
Pack snacks and food. We brought snacks for the car and food for when we were camping. We ordered takeout a few times, but only ate in a restaurant once toward the end of the trip. It had a large outdoor seating area and there was only one other patron there. With a little planning, it was easy to avoid large crowds.
If you want to hit the road from the comfort of your own home, here are a few great road trip books that I’ve enjoyed and you might as well. Safe travels!
“It’s an ill wind that doesn’t blow some good.” – Pa Ingalls in Little House on the Prairie
COVID-19 has been a tragedy. There’s no disputing that. Thousands dead. Millions sick. Millions more jobless. It’s hard to overstate the negative impacts of the pandemic. And yet, to paraphrase Pa Ingalls, even terrible situations can produce some good. As difficult as this time has been, I can’t help but think that many of us will look back on it as one of the best things to happen to us. Not in a “I just won the lottery!” sort of way, but in a “Painful, but positive” sort of way. Keep reading to see what I mean and to see how you can make sure that this “ill wind” blows some good for your retirement.
It forces us out of routine. It’s easy to get in a rut. Easy to put life on autopilot and live the same day over and over. Even if we don’t like the rut we’re in, we’ll often stay there because it feels safe. Human nature is such that we will often choose being unhappy over being uncertain. One thing this virus has done in spades is forced us all to live life in a different way. It grabbed the steering wheel and yanked us out of the rut. That’s not necessarily a bad thing. In fact, it’s almost certainly a good thing. It gives us a fresh perspective. It helps time pass more slowly (because routine is the enemy of time). It opens us up to new experiences and new ways of thinking about things. It presents new opportunities. Yes, it brings uncertainty, but hiding in all that uncertainty is opportunity. Look for it.
It forces us to reexamine our priorities. Priorities are the things in life that are most important to us. They are the people, activities or things that we really care about and that bring us meaning. When life is going along swimmingly and we’re healthy and have plenty of time and money, we tend to get lazy. We allow things in that clutter or confuse our priorities. When life gets hard, however, and one or more of our priorities are threatened, it refocuses our mind on what’s important. Hard times force us to cut and say “no.” They force us to get back to the basics. That means a life less cluttered with filler and more focused on the things that bring you joy and meaning. That’s a good thing.
It forces us to think differently about debt. When the economy is strong and interest rates are low, it’s tempting to add debt. You almost feel foolish if you don’t. “One percent interest? Why wouldn’t I buy a $60,000 car?” But when hard times hit, servicing that debt becomes difficult if not impossible. Debt increases risk and reduces cash flow. It adds stress. It can derail your plans and dreams. It weakens your financial “immune system.” The pandemic is a good reminder to use debt sparingly.
It shows the fallacy of “appearances.” On a sunny day, a house built on the sand doesn’t look any different than a house built on rock. But when the storms come, the difference is pretty clear. It’s easy to get caught up in appearances. It’s tempting to keep up with the Jones’s. But even in the best of times, that strategy can be stressful and unfulfilling. In bad times it can be catastrophic. Machiavelli once wrote “The great majority of mankind are satisfied with appearances, as though they were realities.” Don’t be one of those people. Build a life that is happy, secure and fulfilling, not one that only looks good on Instagram.
It exposes our weaknesses. Warren Buffett once said “It’s only when the tide goes out that you learn who has been swimming naked.” There’s nothing like a combination global pandemic + financial crisis to help expose your weaknesses. Too much risk in your investments? Too much debt? No rainy day fund? Strained relationship with your spouse? Underlying health issues you’ve been ignoring? Settling for a life that isn’t what you want? If the tide went out and you find yourself a bit overexposed, maybe it’s time to go shopping for a swimsuit.
One of the most important ingredients to a successful retirement is to decide what you really want out of life and to start taking those things very seriously. COVID-19, while terrible, has likely helped you in that regard by forcing you to reexamine your habits, routines, priorities, purpose, relationships, finances, lifestyle and any number of other things. Embrace that process and you’ll likely come out the other side a stronger, more resilient, more self-aware person.
What are some practical ways to apply all this? I’ll put a few ideas below along with links to articles and resources at Intentional Retirement.