Cash rich.  Lifestyle poor.

Cash rich. Lifestyle poor.

The retirement question most people seem intent on answering is “How am I going to pay for it?”  That’s an important question, of course, but retirement is more than just a math problem.

In my opinion, we spend too much time thinking about how to get there (math) and not enough time thinking about what we’re going to do once we arrive (meaning).  If you focus solely on your finances, you risk having a retirement that is cash rich and lifestyle poor.

Cash is great, but it’s not the end goal.  Your money is nothing more than fancy paper that our government has created to make commerce and exchange easier.  The end goal is not to have money.  It’s to use that money to do things that you really care about; things that provide joy, meaning and fulfillment.  If you do that, then money (contrary to popular opinion) CAN buy happiness.  Let me show you what I mean.  I’m assuming you’re all familiar with the mathematical proof: If A=B and B=C then A=C.

Applying that to our discussion:

  • If money=control
  • And control=doing what fulfills you
  • And doing what fulfills you=happiness
  • Then money=happiness.

Of course that transitive logic only holds true if you use the time you control to do what fulfills you.  Which brings me back to my original point:  If you want a meaningful retirement, then you need to treat your planning like more than just a math problem.  You need to decide what it is that you really want out of life and use whatever resources you have and time you control to pursue those things.  Are you doing that?  If so, great.  If not, spend some time thinking about what it is you actually want to do with all that money you’re saving.

Have a great week.

Joe

Retirement: What Seuss might say

Retirement: What Seuss might say

Note: Welcome to all the new readers who found us from the article I did at MarketWatch this week.  I’m glad to have you on board.  In today’s post I’m sharing that article with IR readers, so sorry if you’ve already seen it.

I have always looked up to Theodor Geisel, better known to millions as Dr. Seuss.  As a writer myself, one of the qualities I admire most was his ability to take complex ideas (e.g. learning to read, racial equality, materialism) and make them engaging and easy to understand for readers (e.g. The Cat in the Hat, The Sneetches, How the Grinch Stole Christmas).

Having read a biography on Seuss, I knew that his birthday was just around the corner (March 2), which got me thinking: If Seuss were still with us, how might he have used his considerable talents to explain a complicated and sometimes boring topic like retirement planning?

Of course we’ll never know, but I thought I’d use his rhyming and poetic meter as inspiration and take a stab at it myself.  The result is the poem below called ‘Someday’ is Here!

‘Someday’ is Here!     [Click here for an illustrated version]

Finally!
You’ve made it.
After 40 years and a day
Of working and toiling and slaving away.

You’ve got money in the bank
And time on your hands
Now is the time to make some great plans.

There’s only on problem
A big concern, really.
If you want a great life then you really must hurry.

You see, all these years
You’ve heard experts opining
That your primary worry should be money and timing.

Those are vital, for sure.
But, take care to remember
If life were a calendar
You’d be in September.

The clock keeps on ticking
It gets louder each year.
You’ve spent years saying “Someday”
Well, “Someday” is here.

It’s time to stop dreaming
And actually DO.
That is my primary advice for you.

So how does one start?
Where to begin?
Grab a pencil and paper and let’s jump right in.

The first thing to do is to ask yourself this:
What types of things bring retirement bliss?
Don’t try to please others.
We’re talking about you.
What is it that YOU’VE always wanted to do?

Maybe that’s travel or volunteering to help others.
What would it be if you had your druthers?

Once you know that, then you’re well on your way.
But there are a few other things I should probably say.

First, don’t forget friends.
In life they’re the glue.
They hold everything together.
Otherwise it’s just you.

And while friends are important,
Don’t forget about your spouse.
If you’re happy together
You’ll have no reason to grouse.

So work on your friendships and marriage for sure.
What else? Let me think?
There are two or three more.

Oh yes.  Now with plans and people in order
You can shift your attention and start to re-order.
Your priorities that is.  Your To-Do list is jumbled.
With all sorts of things you should probably fumble.
Get rid of the extra and purge the redundant.
Once you do that life will be more abundant.

So that’s a few things that will get you ahead.
But remember, they won’t help a bit if you’re dead.
So get yourself healthy and lose the spare tire.
If you need a few pointers, call your doc and inquire.

Before we wrap up, a quick review.
What are the things you really MUST do?
Have money and plans.  Relationships too.
A good healthy body and priorities not askew.
Do each of those things and you’ll be ahead by a mile.
Because those are the things that make retirement worthwhile.

[Click here for an illustrated version of the poem.]

Enjoy your weekend!

Joe

I originally published this article at MarketWatch.
Why you need a vacation

Why you need a vacation

It may seem counterintuitive, but spending your money can help you be a better saver.  Let me show you what I mean.

How successful would Olympians be if the Olympics were held every 40 years instead of every 4?  Not very, right?  Most athletes would burn out long before they made it to the actual competition.  That’s because it’s impossible to always be in “preparation” mode without experiencing some sort of “payoff.”  For athletes, the training and sacrifice needs to be counterbalanced by cheering crowds and medal stands.

Relating that to retirement planning, it’s tough to sacrifice, save and be disciplined with your planning decade after decade without having some sort of payoff along the way.  I don’t think it’s a coincidence that Americans work longer and take fewer vacation days than almost any other developed country and we’re also woefully underprepared for retirement.  We’re asking people to be all wind up and no pitch.

Taking a break can remind you why you’re saving in the first place.  After spending a little time at the beach or touring around Europe you might find yourself saying “I could get used to this.”  When you get a taste of the reward, you’ll probably be more likely to put in the effort.

So take that vacation.  Have a little fun and enjoy life now.  It will probably give you the incentive you need to save for the long haul.

Incidentally, I try to eat my own cooking here at IR.  The photo in today’s post is the sunrise in the Cayman Islands last week.  I finished up the test I mentioned in the last post (I passed!) and got on a plane the next day for a trip with some friends.  After a week of 80 degree weather, sand volleyball and scuba, one of the first things I did when I got back was to increase my 401(k) contributions.  🙂

Have a great week!

Joe

40 lessons from my first 40 years

40 lessons from my first 40 years

Looking at the glass half full, the world did not come to an end on December 21st.  Looking at the glass half empty, no apocalypse meant that my 40th birthday arrived as scheduled on the 22nd.  Since I wasn’t otherwise preoccupied with the four horsemen, I had a few extra hours to reflect on the past four decades.  Below are 40 things I’ve learned over my first 40 years.  They are in no particular order and aren’t necessarily the most important things I’ve learned, just some that came to mind.  I gave credit if I could remember where I learned something, but I’m sure there were some that I forgot.

1)    Curate your life.  Your life will largely be defined by what you let in and what you keep out. Choose everything—friends, hobbies, work, philanthropy, clothes, vacations, meals, gadgets, books, etc.—with a discerning eye.  Show me someone with a remarkable life and I’ll show you someone who is a tough curator.  For more, read this.

2)    The most practical career advice I’ve heard came from Scott Adams, creator of the Dilbert cartoon.  He sees two paths to an exceptional career: 1) Be the very best at one specific thing (also known as the Tiger Woods approach) or 2) Be very good (top 25%) at two or more things.  By combining these “pretty goods” you eventually create a package that is very rare and likely valuable to a potential employer.  The first path is very unlikely for most of us, but the second path is fairly easy and nearly as effective.

3)    You are the average of the five people you spend the most time with (hat tip to Jim Rohn).  Choose wisely.

4)    One of the most important questions you can answer is: “What do I really want out of life?”  Once you know the answer, take it very seriously (hat tip to Chris Guillebeau).

5)    “What” is an important question, but don’t forget about “Why.”  If you don’t have a good answer for “why” you won’t have much success with “what” or “how.”  Have a strong “why.”

6)    Worrying is a waste of time.  Almost everything you worry about (95% +) will never happen.  When something worth worrying about does happen, ask yourself “Will this matter in five years?”  If the answer is no, then don’t lose much sleep over it.

7)    Read.  As Twain said, “A man who doesn’t read good books has no advantage over the man who can’t read good books.”  The information that you feed yourself is just as important (and has pretty much the same effect) as the food that you feed yourself.  Fill yourself with new, interesting and challenging information and you can expect a healthy mind.  Fill yourself with the informational equivalent of Twinkies all day and you can expect a mind that is flabby and lethargic.

8)    Climb the mountain so you can see the world, not so the world can see you (hat tip to David McCullough Jr.).  Don’t go through life treating everything as a potential status update on Facebook.

9)    Always be learning something new.  A language.  An instrument.  A skill.  A hobby.  Challenge yourself.  Have fun.  Stretch your mind.  Read this for more info on how and why to be a lifelong learner.

10) Don’t be afraid to screw up.  As Will Rogers said, “Good judgment comes from experience and experience comes from bad judgment.”

11) Dream big.  When you dream big, something happens.  It changes how you think and how you act.  It changes the types of questions you ask.  It inspires and changes those around you.  Dreaming big has led to things like cures, computers and space travel.  Don’t limit yourself to those things that seem “reasonable” or “probable.”  Take a risk and dream big.

12) The best parenting advice I’ve heard (hat tip to Stan Parker): Parenting is all about influence and influence is all about relationship.  If you want to influence your kids, then you need to be consistently building into your relationship with them.

13) The number one key to success is consistency.  Just like money compounds over time, so does effort.

14) Given the choice between spending on “more stuff” and “more experiences” you should almost always choose the experiences. A life spent in dogged pursuit of rich experiences will usually have a much better payoff than one seeking the latest gadget or gizmo.

15) Don’t wait for a roadmap.  With most things in life you need to make due with a compass.

16) Don’t be afraid to take risks. “Sometimes all you need is 20 seconds of insane courage.  Just literally 20 seconds of embarrassing bravery and I promise you something great will come of it.”  Yes, that’s a quote from the movie We Bought a Zoo.

17) When it comes to new obligations, say “yes” slowly and say “no” quickly.  When it comes to new adventures, say “yes” quickly and “no” slowly.

18) We are often under the mistaken impression that we can add sin to our life, when in reality we can only trade for it (hat tip to Ken Wytsma).  Cheating on your taxes or having an affair are not things that you add to your life.  Choosing them will eventually force you to trade something else, like your spouse, kids, character or reputation.

19) If something is on your calendar, it gets done.  Don’t just schedule the stuff you have to do.  Schedule the fun stuff too and you’ll be much more likely to do it.

20) Respond well.  If tragedy strikes, keep your head.  If difficult times come or things don’t work out as planned, stay strong.  If some jackass builds a bunker and says the world is ending on Tuesday, wish him well and invite him over for dinner on Wednesday.

21) Done is better than perfect.

22) Be a system thinker.  Your life is a complex system with lots of different parts.  Just like your car couldn’t function without a transmission your life can’t function if there’s a major problem with something like your finances, relationships or health.  Each of those parts affects the whole.  Handle each area well and the system functions as it should.  Handle them poorly and you can expect problems.

23) When things don’t go as expected, don’t be afraid to make changes.  As Derek Sivers said, “Success comes from persistently improving and inventing, not from persistently doing what’s not working.”

24) Ever wondered whether or not to take advantage of an opportunity or adventure?  Put it to the 50-Year test.  Ask yourself, “Will I remember this in 50 years?”  If the answer is yes, you should probably do it.  I think credit for this one goes to Tyler Tervooren.

25) Work on high priority tasks.  Don’t get bogged down with maintenance (e.g. paying bills, worthless meetings, pushing paper).  Focus on milestones (e.g. family, relationships, creative projects, meaningful work, education, adventure). When reflecting on your life, the milestones will be the things that stand out.  They will be the things that you are most proud of.  The maintenance will just fade into the background.

26) Most of what we do is unimportant and doesn’t need to be done.  Eighty percent of our results will usually come from 20 percent of our effort (hat tip to Pareto and Tim Ferriss).  Simplify as much as possible so you can focus on things that actually produce results.

27) Delayed gratification is overrated (hat tip to Chris Guillebeau).  It’s great if it’s allowing you to work toward something, but bad if it’s an excuse that’s keeping you from something.  Rather than starting now, we often come up with an excuse and say “Someday.”  Unfortunately, the longer you wait, the less you believe yourself when you say “Someday.”  Your dreams begin to atrophy.  Your opportunities begin to vanish.  You aim lower.  You talk yourself out of things.  Before you know it, it’s too late.

28) Don’t save the best for last.  If you retire at 65 and stay healthy and active until 75 (a stretch for many), then you’ve got 10 years to do everything you’ve been putting off for the last 40.  Ten years is not enough.

29) For the most part, happiness is a choice.

30) Get out of the lecture and into the lab.  It’s easy to talk, speculate and dream.  It’s passive.  It’s like you’re an attendee at a lecture.  Doing is difficult.  Doing is getting out of the lecture and into the lab.  It’s getting your hands dirty by experimenting and taking action.  “Do not be too timid and squeamish about your actions.  All life is an experiment.  The more experiments you make the better.  What if they are a little course, and you may get your coat soiled or torn?  What if you do fail, and get fairly rolled in the dirt once or twice?  Up again, you shall never be so afraid of a tumble.”  (Ralph Waldo Emerson).

31) Focus on things you can control.  When you do that, your productivity is high and your stress is low.  If you focus on (or spend time thinking about) things you can’t control, your productivity is low and your stress is high.  “The more concerned we become over the things we can’t control, the less we will do with the things we can control.” (John Wooden)

32) When making major decisions in life, think about the path that those decisions put you on.  That path will likely lead you to some great new opportunities, but it will also lead you away from other opportunities, places, people and experiences.  In that way, major decisions are directional and difficult to change.  Don’t make them flippantly.

33) While we’re on the topic of decisions, most usually present you with an easy way and a hard way; a wide path and a narrow path.  Paradoxically, narrow, difficult decisions that require discipline and sacrifice usually pay off by leading you into a place where the road is wide and our options are plentiful.  On the other hand, taking the wide, easy path ends up funneling you down a narrower and narrower chute until all good options are gone and all that is left are painful consequences.

34) Live with a sense of urgency.  Someday you’re going to die.

35) “Good” is succeeding at something.  “Great” is being able to repeat that over and over.

36) Explore.  “The world is a book and those who do not travel read only one page.”  (St. Augustine)

37) Solve problems early, when the solutions are usually less painful.  To summarize Frank Lloyd Wright, you can solve problems on the drafting board with an eraser, but you need a wrecking ball at the building site.

38) Always look for opportunities to help other people.

39) Be curious.  It will lead you to some interesting people, places and experiences.

40) You will be who you are becoming (hat tip to Gavin Johnson). You’re never going to wake up one morning and be something that you haven’t been becoming little by little, day by day, for years. Take a small step today that moves you in the right direction.  Then do it again tomorrow and the next day and the next.  Before you know it, you’ll wake up one morning and you’ll be the person you’ve been becoming all along.

Do you have any life lessons to add to the list?  I’d love to hear them.  Just share in the comments section below.  Thanks!

~ Joe

 

Schedule your good stuff

Schedule your good stuff

I was looking at my calendar the other day and it’s loaded with things like meetings, lunches, conference calls, article deadlines and doctor/dentist appointments.  I put those things on my calendar for one very important reason: If it’s on my calendar, it gets done.

If I schedule a meeting, I’m there five minutes early.  If I have a lunch appointment with you, don’t expect to get stood up.   If I tell my trainer I’ll be there at 4 o’clock on Monday, Wednesday and Friday, then the gym bag is packed and in the car on those days.

I’m sure I’m not alone in this.  Most people are disciplined with the things on their calendar.  As I thought about that, it occurred to me: Why don’t we schedule our fun stuff?  Too often in life we have hopes, plans and dreams that we want to pursue, but they get crowded out by the tyranny of the urgent.  In a cruel bit of cognitive dissonance, we pack our schedules with all the things that we HAVE to do, and then try to fit the things that we WANT to do somewhere in the cracks.

What if you started scheduling the good stuff?  What if you actually blocked out time on your calendar for a date night with your spouse, time with your kids, time to read, time to learn a new hobby, time to go for a walk or time to take a trip?  My guess is that if it was on your calendar, you’d treat it like all of your other appointments and actually show up to do it.  Not only that, but you would gradually get better at using your time to accomplish the things that you wanted to in life, which is a skill that will come in handy during retirement.

Year End Review

While we’re on the topic of using our time wisely, I wanted to point you to a few articles in the Intentional Retirement Archives.  As many of you know, I spend time each December thinking about the past year and planning for the next.  You can read about the process I use in these two articles:

I’d encourage you to set aside some time this month to think about the coming year.  Whether you follow my process or create one of your own, don’t underestimate the importance of planning.  The type of life you want to live—one filled with meaning, accomplishment, and purpose—does not happen by accident.  You need to be intentional.

Have a great weekend!

~ Joe

A short lesson in perspective

A short lesson in perspective

Late last month an advertising executive (a real life Mad Man) named Linds Redding died of esophageal cancer.  After being diagnosed in 2011, he would regularly write about the disease, his treatments and his thoughts on life at his blog.

Earlier this year he wrote a post called A Short Lesson in Perspective in which he reflected on how wholeheartedly he had thrown himself into his career over the years.  As he rapidly approached the premature end of his life, he wondered aloud if it was worth it.

His insights and conclusions were so raw and honest that I wanted to excerpt a small portion of his post below so that you and I could reflect on our own priorities as we live life and plan for retirement.  One day (hopefully not soon) we will be where Linds was when he wrote that essay.  How great would it be if we could heed his words of warning so we could look back on our life with pride, satisfaction and few regrets?

A quick note: Linds refers to something called “The Overnight Test.”  When creating advertising campaigns, he and his team would often let ideas simmer overnight.  If it still seemed like a good idea the next day, they would say that it passed “The Overnight Test.”

From A Short Lesson in Perspective:

“Countless late nights and weekends, holidays, birthdays, school recitals and anniversary dinners were willingly sacrificed at the altar of some intangible but infinitely worthy higher cause.  It would all be worth it in the long run…

This was the con.  Convincing myself that there was nowhere I’d rather be was just a coping mechanism.  I can see that now.  It wasn’t really important.  Or of any consequence at all really.  How could it be?  We were just shifting product.  Our product, and the clients.  Just meeting the quota.  Feeding the beast as I called it on my more cynical days.

So was it worth it?

Well of course not.  It turns out it was just advertising.  There was no higher calling.  No ultimate prize.  Just a lot of faded, yellowing newsprint, and old video cassettes in an obsolete format I can’t even play any more even if I were interested.  Oh yes, and a lot of framed certificates and little gold statuettes.  A shit-load of empty Prozac boxes, wine bottles, a lot of grey hair and a tumor of indeterminate dimensions.

It sounds like I’m feeling sorry for myself again.  I’m not.  It was fun for quite a lot of the time.  I was pretty good at it.  I met a lot of funny, talented and clever people, got to become an overnight expert in everything from shower-heads to sheep-dip, got to scratch my creative itch on a daily basis, and earned enough money to raise the family which I love, and even see them occasionally.

But what I didn’t do, with the benefit of perspective, is anything of any lasting importance.  At least creatively speaking.  Economically I probably helped shift some merchandise.  Enhanced a few companies bottom lines.  Helped make one or two wealthy men a bit wealthier than they already were.

As a life, it all seemed like such a good idea at the time.

But I’m not really sure it passes The Overnight Test.”