Category Archives: Retirement

Retire With Dignity – Reject the Normal Financial Outlook

Everything is relative when it comes to money and determining what is “normal.” At least that is what we have been conditioned to believe over time. The normal financial outlook is very different for blue collar workers and executives, plumbers and CEOs, and teachers and doctors. Unfortunately, a statistical average generated among such a wide variety of professions and incomes does little good in helping us learn what normal looks like today.

Income, of course, is only half the battle. On the flip side, expenses complicate the search for normal even further. Even two doctors with identical incomes and living in $450,000 homes in San Francisco, California and Arlington, Texas, respectively, may have wildly differing expense to income ratios due to property taxes and cost of living discrepancies.

So where does this leave the search? Is a “normal financial outlook” definable?

Is a "normal financial outlook" definable? Everything is relative when it comes to money, yet the desire to be normal could be sabotaging your efforts.

A Normal Financial Outlook is a Fallacy

The other day, I spoke with a friend about the manner in which “normal” people manage their finances. After citing problem after problem, we came to a realization: We won’t want to be normal. Normal is broke, greedy, overconfident, and unfulfilled. 

Following our conversation, I pondered the idea a bit more and came to a conclusion which I believe is tight enough to hold water: the average person’s desire to be normal is to be blame for his pessimistic financial outlook. Furthermore, normal is simply a self-defeating social construct which ultimately holds us back.

Consider the following connections:

*The desire to be normal drives us to take on a 72 month auto loan so we can drive the same car as our colleague; never mind the fact that the vehicle will be worth a fraction of its sticker value when the loan is paid off.

*The desire to be normal motivates us to take on the maximum pre-approved mortgage when looking for a home. It also causes us to spend at an unreasonable clip to furnish the home at high interest rates and rationalize it because “everyone else is doing it.” Many normal people will end up paying nearly twice the value of their home due to 30 years of interest accumulation (or more if they refinance to another 30 year mortgage after several years of paying on an initial 30 year mortgage).

*Because most normal people do not have any idea how much money they will need to live on in retirement, we adopt a normal mindset and rationalize that “it will all work out.”

*The desire to be normal leads us to go out with colleagues each day rather than brown bagging it for lunch. This kind of “normal” comes at a cost of over $100,000 over a working career.

These are only a few examples, but they drive home the truth that normal is bad.

Normal is the Worst

Statistically speaking, normal people are house poor, broke, in debt, and destined to slave away for 40-50 years only to retire in old age and poor health. And this is what most of us strive to become?

I have a different vision for my future. I don’t want it to be anything close to “normal.” As a result, I’m doing the sensible things now to ensure that my family’s future isn’t depressingly bleak.

First and foremost, I am consistently striving to challenge my everyday perception of “normal.” I know that if I surround myself with people and experiences which are “normal,” I will fight the desire to live abnormally. On the other hand, if I surround myself with people who share my view of what is “normal,” I am cultivating a healthier perception of the idea itself. This is vital.

Mrs. Superhero and I have intentionally taken steps to become good friends with others who share this mindset. For example, one couple we frequently spend time with also maintains an entertainment/dining budget. We have no qualms with being transparent about that among our families, which often leads to double dates at our home in lieu of expensive meals out. We look at as iron sharpening iron.

Secondly, Mrs. Superhero and I have worked at minimizing the frequency with which we experience luxury in our lives. We know that once we become accustomed to luxuries it can be very hard to give them up. Once luxuries become the norm, it can become very difficult to grow wealth and develop a favorable financial outlook; raising the bar in this manner is “normal,” but it minimizes satisfaction and happiness while permanently raising one’s bottom line required spending. We aim to make luxurious experiences the exception, not the norm.

Third, we are diligent in taking excellent care of the nice possessions which we have prioritized over the years. We have found that we appreciate these items for their true value, utility, and contribution to our overall happiness simply because we exhibit pride in maintaining what we have worked and sacrificed to gain. For example, I marvel at the fine condition of my 2008 Honda Accord while driving to work each day. Instead of dwelling on the fact that it is nearly nine years old now,  I choose to take pride in its fine condition.

I often think that if we were resigned to a normal financial outlook, we would be far less mindful about these sort of things. In rejecting this kind of thinking, we choose to believe that there is a better way to live. It is a path lined with hard work, sacrifice, and self-control, but we firmly believe it is the best path toward happiness both in the present and in the future.


How do you define “normal” when it comes to money? Do you have a normal financial outlook? In what ways do you reject being “normal” on your path toward happiness both in the present and in retirement?

The Herd Mentality and Retirement – How to Free Yourself and Others

In my last piece, I wrote about my apparent decision that perhaps early retirement just isn’t for me. I outlined several pros and cons of early retirement, all of which I had previously read about or otherwise heard expressed.

Confession time: I was subtly and intentionally trying to stir the pot.

The result? It worked. My faux-criticism of early retirement worked just well enough to spark some lively discussion.

For reference sake, here are the pros and cons I listed.

Pros:

*Opportunity to spend increased time with family and friends
*Freedom to travel
*Reduced stress and improved health
*More time to pursue other interests or even a new career

Cons:

*Possible negative impact upon health (possible loss of health benefits, decreased physical activity)
*Possible boredom and/or depression
*Increased stress (more time to worry; constant fear that your nest egg may be insufficient)
*Limitations due to fixed income

For the record, I don’t necessarily buy into the above cons. They are possible, but as Physician On Fire stated, “if you’re more stressed and less active when retired, resulting in poorer physical and mental health, you’re doing it wrong.”

So why was I intentionally-deceptive?

The herd mentality plays a large role in the formation of the average retirement plan. We may wish to deny it, yet our actions are telling. Learn how to break free and help others do the same.

Testing the Herd

While I don’t mind readers agreeing with me based upon the merits of my arguments, I do have a problem with those who mindlessly agree with others. To the credit of those who left responses in the comments, you all got pretty critical with my shallow analysis. Some of you were kind, even though I could sense that you really wanted to sock it to me. Some of you downright took me to the cleaners, which I fully deserved!

I’ve noticed more and more that this kind of honest dialogue is rare. Heck, if the two top candidates to become the next leader of the free world cannot even participate in a simple debate without displaying an egregious lack of manners and an overall inability to communicate, how can we expect people to be candid yet respectful in a blog or other forum? And how can we expect people to disagree with one another in person and still continue the conversation?

These are tough questions to navigate, so many just don’t bother to try. We pat each other on the back despite the presence of disagreement, stand pat as others share misinformed or half-baked ideas, and keep our mouths shut.

We might not possess a herd mentality ourselves, but we often do very little to discourage its advancement among our friends and loved ones. Think about it. How many of us have said nothing when a friend or family member spoke of his latest voluntary investment in “can’t miss” company stock, the “stable return” of her annuity, or the “deal” he received on a whole life insurance policy?

I know I am often far too nice, and you are, too, in all likelihood.

Understanding the Herd Mentality

The act of discouraging the herd mentality on retirement begins with understanding. If we can grasp the reasons for the perpetuation of this mentality, we may be better equipped to combat against it.

At its heart, the herd mentality may be traced to man’s desire for conformity. Put another way, being different is very often undesirable. Even a majority of the weirdo middle school kids with dreadlocks and trench coats don’t like being different, if they’re being honest. So we often find ourselves following along with others in group-think as a means of gaining a sense of belonging and becoming part of a group.

Similarly, the heard mentality is rooted in the fear of being wrong. Even if we feel we are more likely to be correct in taking a specific course of action, nagging fear may drive us to choose the opposite course out of fear that we could end up isolated by our own wrong doing. After all, it is better to be wrong and with others than to be correct and alone, no?

Intellectually, many of us may wish to shed these notions, yet our behaviors and actions say otherwise.

Discouraging the Herd Mentality

So how exactly can we help others overcome the tendency to conform, fear mistakes, and perpetuate a herd mentality? No two people are alike, but the following guidelines will prove to be helpful in most situations and with most people.

1. Listen more than you speak

When helping another person by seeking to change their opinion or behavior, it is most important to fully understand their position. This understanding can only be achieved through careful listening.

Billionaire Richard Branson articulated the importance of listening very well in sharing a lesson learned from his father:

When I grew up our house was always a hive of activity, with Mum dreaming up new entrepreneurial schemes left, right and centre, and me and my sisters running wild. You were as likely to find me helping Mum with a new project as outside climbing a tree. Amidst all the fun and chaos, Dad was always a supportive, calming influence on us all. He wasn’t quiet, but he was not often as talkative as the rest of us. It made for a wonderful balance, and we always knew we could rely on him no matter what.

Within this discreet support lay one of his best and most simple pieces of advice for me: listen more than you talk. Nobody learned anything by hearing themselves speak. Wherever I go, I try to spend as much time as possible listening to the people I meet. I am fortunate to travel widely and come across fascinating characters from all walks of life. While I am always happy to share my own experiences with them, it would be foolish if I didn’t listen back.

2. Ask questions with care and humility

Aside from listening, it is equally important to engage with others by asking thoughtful questions and remaining humble. These steps go hand-in-hand, and they are the keys to earning others’ trust.

Remember, most people do not care what you know until they know that you care.

3. Acknowledge your own mistakes and imperfections

In order to continue building a foundation of trust and credibility, seek to admit your own mistakes and imperfections. It is very difficult to shatter the herd mentality if you skip this step.

Yesterday, I was listening to the Dave Ramsey show podcast when Dave took a call from a confused caller. The wife and mother of four shared that she and her husband were considering following the advice of friends and family by moving in with her parents and selling their house to save money. Dave took this caller to task in a manner that made me wince a bit. He was critical of the caller’s lack of planning, overblown spending, and knee-jerk reactions. Dave also pointed out the this woman was attempting to implement a plan which treated only the symptoms of the problem rather than the problem itself.

Naturally, this caller became a bit distressed and defensive. In a moment of swift timing, Dave pointed out that he himself had made “far dumber” mistakes with money than even the mistake that this woman and her husband were about to make. As he outlined several of them in crystal clear detail, he displayed empathy and earned credibility with the caller. Little by little, the caller warmed up to Dave and become more and more interested in what he had to say. By admitting his own mistakes, Dave broke down the herd mentality barrier which had driven this caller.

Final Word

I apologize for any genuine concern I may have caused over my views on early retirement. Despite my deception, my true vision for early retirement is simple:

I desire to reach financial independence and gain the option to work, if I so choose, for purposes other than monetary rewards.

Despite experiencing some guilt over my slight deception in my previous piece, I am glad that the outcome was as I had expected. Collectively, the tight-nit community listened to my ideas, posed relevant questions and counter-examples, shared personal anecdotes, and tapped into long-established trust and credibility in an attempt to show me the error of my ways.

I am proud to be running with the right herd.


Have you had experience breaking others free from the herd mentality surrounding retirement? 

 

 

 

Early Retirement Musings – Is It Worth It?

I have been thinking about early retirement a lot lately. Upon first glance, you might read that sentence as an indication that I am looking for an escape from my current day-to-day grind. On the contrary, I feel that Mrs. Superhero and I are in a good place at the moment. We enjoy our full-time careers in the classroom, and we feel invigorated by our side businesses in real estate and the music studio, respectively.

My thoughts on early retirement are admittedly impacted by a variety of influences. First and foremost, everyone in our family trees has opted for traditional retirements. On the other hand, nearly everything I read on a regular basis, from books and magazines to blog articles, touts the benefits of early retirement and financial independence.

What are my current thoughts about early retirement? I’m seriously pondering whether I am even interested at this point.

Retirement Basics

Any discussion of the pros and cons of early retirement should begin with a look at the purposes behind retirement at a basic level. Quite obviously, the cultural phenomenon of retirement exists because humans are not physically and mentally equipped to work forever. As a result, we work and save for four to five decades, on average, in order to survive when we are no longer able to support our basic needs through earned income.

To recap, the most basic life plan is as follows:

WORK 40-50 YEARS + SAVE MONEY = BASIC SURVIVAL AT AGE 65-70 

The above plan is a reality for an alarming cluster of the population. Yes, you can and probably should aim higher with your retirement goals. For example, you could save and invest more than is required to meet your basic retirement needs, allowing yourself to live a little in retirement. However, tomorrow is promised to nobody. Or you could save more and retire a bit earlier, say in your late 50s or early 60s.

So, we might describe the intermediate plan as follows:

WORK 30-40 YEARS + SAVE MORE MONEY = COMFORTABLE RETIREMENT AT 55-60

For a small number of renegades with their hearts and minds set on early retirement, even this sensible plan is insufficient. Thanks to mathematical breakdowns by Mr. Money Mustache and countless other bloggers, waves of people are targeting a much earlier retirement. How? They are aiming to increase their savings rate, as a percentage of net income, to figures which exceed 40 percent and approach 85 or even 90 percent!

Early retirement
The Shockingly Simple Math Behind Early Retirement (Credit: Mr. Money Mustache)

 

 

 

 

 

 

 

 

 

 

 

 

 

In order to reduce this table to a formula, we might proceed as follows:

WORK 3-20 YEARS + SAVE LIKE THE DICKENS = RETIRE EARLIER THAN EVERYONE ELSE

The most beautiful thing about the chart above is that it is not income sensitive in any way, shape or form. It applies to you whether you earn $40,000 per year or $4 million per year. Of course, it should be much easier to save when you have an inflated income. Yet, that pesky thing called “lifestyle” tends to get in the way.

In essence, we might say that early retirement is a largely a choice.

Early Retirement Pros and Cons

Now that it is apparent that early retirement is mathematically accessible for virtually everyone, let us examine the merits of such a plan.

Among many pros of early retirement, the following stand out:

*Opportunity to spend increased time with family and friends
*Freedom to travel
*Reduced stress and improved health
*More time to pursue other interests or even a new career

Obviously, early retirement is not without its cons, which include:

*Possible negative impact upon health (possible loss of health benefits, decreased physical activity)
*Possible boredom and/or depression
*Increased stress (more time to worry; constant fear that your nest egg may be insufficient)
*Limitations due to fixed income

As with virtually all matters of personal finance, the pros and cons are largely situation-dependent. For example, my Grandpa retired only a few years early and came out ahead in nearly every manner possible: he increased his earnings and kept busy by working side jobs, gained the freedom to spend time with his children and grandchildren, and took several vacations each year with my Grandma.

On the other hand, I know a person (who shall remain nameless) who would quite likely suffer an early death if he were to retire early. He would spend his days and nights wasting away in a recliner watching television, despite being of able mind and body. Quite likely, early retirement would be an early death sentence for this person.

Our Current Plan

Back in June, I established 30 goals as I approached my 30th birthday. Goal 5 stated, “Set a target date for early retirement and formulate a plan to get there.” I have been dragging my feet on this one ever since; as I said, I’m just not sure what I want to do at this point.

Strictly based upon Money Mustache’s chart above, Mrs. Superhero and I could likely retire somewhere in the neighborhood of 15-17 years, or 2031, given our current assets and savings rate. Since I am a proponent of stealth wealth, that’s about as specific as I’d like to get at this point in time. However, we could make some changes in current spending and investing plans and possibly retire in approximately 10 years. This would not be achievable without significant sacrifice and postponement of other significant goals.

All of which has led me to an important conclusion: I simply desire to achieve other goals more than I desire early retirement at this point in time. Among other goals that I feel will bring me and Mrs. Superhero greater joy than early retirement, starting a family ranks at the top of the list. Additional goals include:

*Fund college for our future children
*Travel with moderate frequency
*Give and support missionary work beyond our current ability to do so
*Finish our basement (which is currently unfinished)
*Possibly own a second home

If our pursuit of these goals brings us increased happiness and slightly slows our pursuit of early retirement by 5-10 years, I feel I am OK with that. I would rather retire slightly later than mathematically possible and achieve more in life rather than retire with unfinished business.

In closing, let us consider one of the oldest retirement clichés, which says, it is better to retire to something than to retire from something.


What are your current retirement plans? Do you aspire to retire early? If so, how do you hope to achieve early retirement?

 

Investing is a Marathon – A Personal Training Guide to Win

Investing is a marathon, not a sprint.

Aesop’s parable of the tortoise and the hare is a timeless, yet somewhat ambiguous tale. It chronicles a race between the slow-and-steady tortoise and the overconfident-and-lazy hare. The tortoise paces himself appropriately, while the hare opts to enjoy a mid-race nap. When the hare awakens, he discovers that his competitor has already won the race.

Investing is a marathon, not a sprint.

I appreciate this wise lesson, but an alternative version of Aesop’s tale provides deeper wisdom.

In this iteration, the hare decides to provide the tortoise a head start. Throughout the race, the tortoise grows stronger and faster, a development which was unforeseen by the hare. Despite the hare’s eventual efforts to work harder and run at much faster speeds than the tortoise could ever imagine, the tortoise wins the race handily. In fact, the result is far from a photo finish.

As investors, many people are like the hare. They are always waiting and preparing for tomorrow. Others are like the tortoise. They invest slowly and boringly over time and maintain remarkable consistency.

When it comes to investing, the average investor would be wise to learn from both the slow-and-steady approach of the tortoise and the speed and intensity of the hare.

Investing is a marathon, not a sprint.

Investing is a marathon, not a sprint. Unlike running, you only get one chance to live and save. Will you be more like the tortoise or the hare?

Marathon Training

Following my first half marathon in 2010, I began training for my first full marathon in January 2011. The days are cold and nights even colder during Illinois winters, which made the beginning of my training extremely brutal, both physically and mentally. To make matters worse, I was still trying to master the fundamentals of distance running: proper form, hydration, nutrition, and the all-important techniques to avoid chafing.

However, I established a regimented schedule for both training and rest, learned to listen to the signs and signals of my body, and improved as a runner. Despite many mistakes and a few minor aches and pains, I pressed onward and completed my training.

Exploring the Parallels – Investing IS a Marathon!

Race day arrived much faster than I ever thought possible. Though I had prepared as well as I could have expected, as I stood at the start line with hundreds of other people, a thought played over and over in mind:

What did you just get yourself into?!

Getting Started is Hard

The race director fired his gun, and we were off and running.  The first mile was absolutely awful. I dodged slower runners left and right, expounding a lot of wasted energy in the process, and experienced my first doubts. I’m so far from the finish line, I thought.

Many people have these same doubts when they begin investing. They know they are beginning a long journey which requires patience and diligence, yet it is not uncommon for many beginning investors to experience waves of discouragement and doubt. So they work harder, save more, do more research, and re-read investment prospectuses. At first, their efforts barely move the needle.

As I approached the first aid station near mile 4, I felt satisfied. My body had finally warmed up, my doubts had dissipated, and my confidence was restored.

Achieving a positive net worth is much like a marathon’s first aid station. It is a milestone worth celebrating. This checkpoint is not achieved without hard work and sacrifice, yet it is only the beginning of a long journey.

Setting the Pace, Focusing on Your Goals

I settled down even more after the first aid station and found a comfortable pace. At times, running felt effortless during this stretch. Around mile 10, I passed by family and friends who were out to support me. They cheered me on and said I looked “very fresh.”

Investing is a marathon, not a sprint. Unlike running, you only get one chance to live and save. Will you be more like the tortoise or the hare?
Feeling great at Mile 10 of the 2011 Wisconsin Marathon

As I approached the midway point of the race, I noticed that many other runners were picking up their pace. I joined them for a moment, but wisely pulled back after a few minutes, as the pace felt unsustainable.

Moments later, I witnessed the jubilation of those same runners as they crossed the half marathon finish line. Unbeknownst to me, they had selected a different goal and adjusted their pace accordingly. As they crossed their finish line and celebrated the fruits of their labor, I began to feel sorry for myself. I still had 13.1 miles to go.

It is tempting for an investor to lose sight of the plan and pace and adopt someone else’s approach. However, their pace and goals don’t matter! Your pace and goals are important. Investing is a marathon, so be sure to run the race at your pace and aim for your goals.

Stay Strong, Finish Well

During the long stretch from mile 13 to mile 20, I found myself running alone much of the time. I was fatigued, yet I felt OK. I had experienced my fair share of emotional ups and downs by this point, but I trusted myself. I trusted my training. I continued to take one step at a time.

At the same time, I felt oddly apathetic. I didn’t feel much like drinking or eating gels, so I skipped an aid station. Instinctively, I knew this was a bad idea, but I just didn’t care anymore. I stopped thinking about the successful things I had done to get to this point.

The average investor is similarly susceptible to ups and downs, doubts, and apathy. When you have made sizeable progress toward achieving your goals yet still remain far from your nest egg target figure, it can be tempting to stop caring. It can be easy to rely on feelings and allow them to guide your choices and actions. You must remain consistent and continue to take the steps which helped your investments grow to this point! Investing is a marathon!

My experience from miles 20-26 was in direct contrast to the earlier stretches of the marathon. Up until this point, I was on pace to finish the race in 3 hours and 30 minutes. Everything changed at mile 20. While others whom I had passed earlier seemed to grow stronger, I was battling crippling nausea. I shouldn’t have skipped that aid station, I ruminated.

While this stretch was a slow crawl toward the finish line, it was a victory lap for one elderly gentleman. As this man who was old enough to be my grandfather passed me, he shared some sagely advice:

Just keep going. Keep your eyes on the finish line. Don’t give up.

For many investors, we experience the true ramifications of our mistakes during the home stretch. We wish we had started saving early, experienced more years of the wonder that is compound interest, and maintained greater consistency over the years. Yet the finish line of retirement is visible on the horizon.

As I passed the 26th mile marker and rounded a bend in the road, I saw the finish line for the first time in nearly two hours. I forgot about my nausea and soreness and began sprinting. I’m quite certain I must have looked like a geriatric patient gallivanting down the road, but I felt as quick as Usain Bolt as I crossed the finish line and received my medal.

Like an idiot, I awoke early the morning after the race and crawled out of bed to go for a short run. As I lumbered along under the light of the morning sun, I reflected on my training and race mistakes. Naturally, I was grateful to have learned many lessons. I was also eager to do better next time.

Recommendations to Win the Investment Marathon

However, there is no next time for investors. We all have only a single life to live, so it is important to act with wisdom the first time if we are to achieve the retirement of our dreams. Win the investment marathon by following these four recommendations.

  1. Start early! If you foolishly begin later, as did the hare, and think you can catch up, you are mistaken. Compound interest functions at its finest over long periods of time. Remember, as Warren Buffet said, “You can’t produce a baby in one month by getting nine different women pregnant.”
  2. Follow a plan. Remember, if you fail to plan, you should plan to fail.
  3. Keep it SIMPLE.
  4. Invest based upon your goals and desires, not those of anyone else. Your keys to happiness are not the same as those of others.

If you are looking to begin your investment race toward retirement, a number of routes can help you get started.

Disclosure: FinanceSuperhero recommends the following services and maintains an affiliate relationship with each. However, we only recommend services which we have reviewed and deemed helpful to readers.

I recommend opening an IRA (Roth, if eligible) with Betterment. At the time of publication of this article, over 175,000 investors have contributed more than $5 billion into their Betterment accounts and taken advantage of tax-efficient investing in low-cost index funds. You can even roll over an existing 401k. Open an IRA with Betterment today!

 

If you’re just getting started and desire a method to keep better track of your finances and investments in general, I recommend opening a free Personal Capital account. I trust Personal Capital to monitor all of my financial accounts in a central location, which allows me to see the big picture with a few simple clicks. Their instant calculations help me to ensure that I am on pace to meet my goals. If you desire, Personal Capital also offers advisory services should you wish to adopt a hands-off approach toward investing.


Do you believe that investing is a marathon? On a lighter note, have you ever ran a half marathon, marathon, or ultra-marathon? What other parallels do you see?

 

 

 

My Motivation to Achieve Financial Success – Legacy

Before today’s post, I wanted to share that I recently took part in the Behind the Screen Interview Series at FamilyMoneyPlan. You can check out my interview with Andrew here.


My Motivation to Achieve Financial Success – Legacy

A brand-new home with every amenity.

Freedom from stress and the day-to-day rat race.

Full control over your life and your finances.

When it comes to money, we all are motivated by different factors. Those motivating factors can also change over time based upon our formative life experiences.

However, for as long as I can remember, my motivation to achieve financial success has always been about one primary factor:

Legacy.

My motivation to achieve financial success has always been about one thing: legacy.

My Model of Motivation

I have written extensively in the past about the impact my Grandpa had on my life and my outlook on work ethic, success, and money. Since he passed away just over three years ago, a day has not passed in which I fail to think about him and the incredible legacy he left behind.

While many people do not aspire to leave a legacy or make a profound impact upon their loved ones, my Grandpa knew exactly what he and my Grandma were doing. I learned this at a very early age.

As a young child, I vividly recall the long walk to the lake one warm July 4th evening. As was customary, the entire extended family – Grandpa and Grandma, several aunts and uncles, and far too many cousins to count – had set out well before dusk to stake out our seats for the evening firework show.

To be clear, I cannot recall if my memories of what happened next are firsthand or simply recollections of the story; strangely, time has a way of clouding memories. Regardless, I will always remember the words my Grandpa spoke to my Grandma and as they walked side-by-side and lead the way to our usual seats.

“Look what we did, Mother,” he said, glancing over his shoulder at our entire family.

We were Grandpa’s proudest accomplishment. We were his legacy.

With my Grandpa in 2012
With my Grandpa in 2012

I think back on that story often. In many ways, it ranks as one of the most formative experiences of my childhood. In that moment, I learned a valuable lesson on what is truly important in life.

In my eyes, my Grandpa had it all: a long, relatively-healthy life; a beautiful home; considerable, though undeclared, wealth; and the freedom to do as he pleased. Yet, his family meant far more to him than all earthly possessions.

Yes, my Grandpa loved money. In fact, when I spoke at his funeral, I shared the true story of the time he opened his wallet and a moth flew out. Like a typical, hard-working Dutch man, he was not in any hurry to spend his hard-earned money. But he had his priorities in order. He was generous and kind when it mattered most, especially to family and friends.

I often wonder if my priorities, too, will stand the test of time.


On the surface, I have no doubt that many of my friends and loved ones completely misunderstand my money motivations. To many of them, I am sure I appear to be greedy, miserly, or a workaholic. Some may even think I must be self-obsessed and vain.

However, I believe short-term sacrifice is worth the long-term gains waiting to be realized. Over my lifetime, I have learned that it is the motivation behind one’s actions, not the actions alone, which deserves scrutiny.

My wife and I aren’t working hard to inflate our current lifestyle, live it up in the present, and run the risk of burn-out. No, we are sacrificing in the short-term in order to build our ability to focus on what is truly important to us five, ten, and twenty years from now. In a culture which places the highest value on instant gratification, we are embracing the opposite.

Once in a while,  when it feels like I’m burning the wick at both ends, I like to hit the streets for an evening run and clear my head. Invariably, my thoughts drift and I begin to form visions of the future: our future kids playing in the yard, sending them off to college without any debt, walking my daughters down the aisle on their wedding days, and taking the entire family, grandchildren included, on a two-week getaway to Disney World. Those thoughts are the magical panacea for my weariness.

In the present, those visions represent a future worthy of current sacrifice and hard work.

Those thoughts – my future family and the experiences I hope to provide for them – will be a significant part of my legacy.


What motivates you to achieve financial success?

 

The Two Most Important Numbers to Achieving Financial Success

My family is soft-spoken. Though members of my extended family tend to be people of very few words, when someone speaks it is a certain sign that those words are important and have been carefully crafted. My uncle, a wise man of few words, unexpectedly told me a surprising story during one of our trips to Michigan this summer.

One of his very elderly friends at church had passed away a few months ago, and shortly after this gentleman’s passing, his wife died. As described, they were a very sweet old couple. They had been married for more than 50 years and still lived in the tiny home which they had purchased shortly after getting married. The man’s wife never held a job, as they felt it would be more valuable for her to remain home and raise their children. The man worked a blue-collar job as a machinist in town and remained with that company throughout his entire working career until he retired in his sixties.

My uncle’s friend and his wife were a model of frugality. They owned only one vehicle at a given time and chose to drive well-maintained used vehicles. According to my uncle, he couldn’t recall a time in which the couple owned a vehicle fewer than five years old.

You probably know a similar couple. Though I did not know this pair myself, I know many other older couples who fit this billing. My grandfather was similarly frugal, though a bit less extreme.

A true story-teller, my uncle saved the best for last in the tale of his friend, and what he told me was most-unexpected.

Head over to ApathyEnds and read the remainder of this article, as it is the featured guest post for today. Be sure to check back here on Friday for an offbeat piece on lessons learned from an unusual football star.

A Different Kind of Saving For the Future

Close your eyes for a moment and visualize your future. Perhaps you see a beautiful home with a wrap-around porch, a white picket fence, and children playing happily in the yard. Maybe your vision includes a cruise around the world, hiking in the Austrian Alps, or climbing the Great Wall of China. No matter the specifics of your vision, this can be a fun and inspiring mental exercise.

In reality, most people are keenly aware that most dreams come at a cost. As a result, we plan, scheme, make do, and go without in an effort to save money and make our dreams an affordable reality.

When it comes to saving money for the future, following Stephen Covey’s recommendation to Begin With the End in Mind is critical. However, if you’re reading this post with the hope of learning how to better save money for future expenses or plan for your retirement, you’re reading the wrong article. This isn’t  about that kind of saving.

This article is all about saving money with the ultimate intention of letting loose a bit and having fun with money. In fact, it will focus much more on future spending than on present saving.

Recently, I have read many articles which have clarified my vision of how, when, and why I will spend my future discretionary income and earmarked savings. In no particular order, I would like to present to you a wide variety of items (and their price tags, when possible) which have caught my attention in recent days and worked their way into my future plans and/or dreams.

Most people are keenly aware that most dreams come at a cost. We plan, scheme, make do, and go without in an effort to save for the future.

 

Rising Future Technology

It’s no secret that today’s technology is changing by the minute. Much of today’s cutting-edge technology will be discarded or revamped within the next six months. The average person intuitively knows this to be true based on perception and experience. However, it is important to note that data also supports this finding.

According to analysis by The Emerging Future, LLC, which is based upon Ray Kurzweil’s historical trends of exponential growth, the rate of technological growth is ever-improving. Consider, for example, the following chart, which articulates the projected thirty-two fold increase in current technological ability over a five year period beginning in 2012.

Most people are keenly aware that most dreams come at a cost. We plan, scheme, make do, and go without in an effort to save for the future.
Credit: The Emerging Future

While the notion of this kind of advancement is exciting, the prospect of technology becoming one thousand times more advanced in the next ten years is nearly mind-boggling. Expand the projection to 20 years, and technological advancements are projected to be over one million times more advanced. As you can see from the chart below, The Law of Accelerating Returns really makes its mark beginning sometime around year 16.

Most people are keenly aware that most dreams come at a cost. We plan, scheme, make do, and go without in an effort to save for the future.
Credit: The Emerging Future

Interestingly, I first learned of The Law of Accelerating Returns in a very practical way. When I was in fifth-grade, I learned to play chess and quickly became enamored with the game. I devoured over 50 books on chess strategy and eventually learned to play the game (and defeat opponents) without sight of the board. While my friends were preoccupied with other interests and pop culture, I became hooked on reviewing the 1996 and 1997 six-game chess matches between the World Chess Champion Gary Kasparov and IBM computer Deep Blue.

Most people are keenly aware that most dreams come at a cost. We plan, scheme, make do, and go without in an effort to save for the future.
Kasparov vs. Deep Blue (Credit: Mentalfloss)

Naturally, I assumed, perhaps due to youthful naiveté, that Kasparov would crush Deep Blue. In 1996, the Champion won the match 4-2. However, a year later, the computer improved greatly and defeated Kasparov 3.5-2.5. Though many chess experts blamed the loss on uncharacteristically-poor play by Kasparov, artificial intelligence had defeated human intelligence.

I note these historic chess matches because they serve as a poignant illustration of exactly how far artificial intelligence has come in the past 20 years. While it was once impressive to witness a machine defeating man in the world’s most-complex game, today technology is capable of much, much more. This is where dreams, saving, and spending come into play.

 Autonomous Vehicles and Tesla Motors

Beginning around 2008, Tesla Motors began the production and sale of its Tesla Roadster, the first automobile to use lithium-ion battery cells. The Tesla Model S sedan was unveiled in 2009 and hit the public streets in 2012. Last March, CEO Elon Musk unveiled plans for the Tesla Model 3, which is set to debut in 2017 at a base cost around $35,000.

Most people are keenly aware that most dreams come at a cost. We plan, scheme, make do, and go without in an effort to save for the future.
2017 Tesla Model 3 (Credit: Motor Trend)

When I read reviews and watch videos on the Model 3, I tend to have a very different reaction than many people. Yes, I am simultaneously intrigued by the vehicle itself and disgusted at its price; yet, on the other hand, a part of me considers the impact that the Law of Accelerating Returns will have upon Tesla vehicles’ performance and cost over time. Interestingly, Musk himself believes that future Tesla models will continue to become more and more affordable. He also believes that his company is currently only six years away from achieving an autonomous vehicle (i.e. its driver can go to sleep and awaken having arrived at his destination).

While I don’t plan to spend $35,000 on a Model 3 next year, I hope to be in the market for a future Model 7 or 8 at the hopefully-low cost of around $22,000 (my optimistic prediction) ten years from now.

It’s time to start saving!

Flying Robots

I will never forget the day I learned that Amazon was working on a plan to deliver packages via drone; it was certainly an intriguing idea. Naturally, I was even more impressed when I viewed the following video some time later.

Though it seemed like a far-off fantasy at the time, the use of Unmanned Aerial Vehicles (UAVs) is just around the corner. According to Business News Daily, the Federal Aviation Administration recently passed new rules on civilian drone usage. The rules, called Part 107, go into effect on August 29, 2016, and will allow for unlicensed pilots to legally operate drones as long it weighs less than 55 pounds, is monitored by a remote pilot, and flies at a maximum altitude of 400 feet.

In my estimation, it is only a matter of time before further research verifies the safety of drone operation, thereby making UAVs more-accessible and usable by the average Joe. A quick look at current options on Amazon led me to the $495.00 DJI Phantom 3 Standard Quadcopter with HD Video Camera.

It could come in handy for real estate business, right?

Augmented Reality

By now, you’ve surely heard of the Pokemon Go craze sweeping the world. The wild popularity of the game is attributable to two phenomena, in my opinion: nostalgia and augmented reality. The latter, commonly referred to as AR, pushes the limitations of graphics to a new level by blending reality with computer-generated elements.

An article on HowStuffWorks.com predicted the rise of AR games like Pokemon Go. It provides more detail and insight than is practical or possible to share in this space, but the possibilities associated with this technology are fascinating. In the future, AR may be used in advantageous ways by medical professionals, military personnel, and educators.

I, for one, cannot wait to don a pair of AR goggles and walk the streets of Chicago while my goggles take me on an architectural and historical tour of the city.

The Lilium

As if AR, self-driving vehicles, and drones weren’t exciting enough, a group of German engineers have raised the bar even higher with the development of a conceptual electric plane called LiliumTouted as the first-ever vertical take-off and landing jet, the Lilium is projected to reach speeds of approximately 250 miles per hour.

As of the date of publication of this article, the Lilium is expected to be made available for purchase in its initial public rollout in January 2018. It is certainly not without its limitations, including the required training and licensure in order to legally operate the Lilium, but if we are to trust the Law of Accelerating Returns, perhaps the technology will be become both affordable and easy to use by 2040.

The Perks and Rewards of Exponential Growth

While the above examples are certainly fun to dream about in the present, many experts believe that we can scarcely begin to imagine what will be possible in the next 10, 20, or even 50 years as a result of the exponential growth of technology. Perhaps a 50-year old FinanceSuperhero will become the market leader for the sale of smart homes or stay busy planning a family vacation to the Moon.

Whether these examples serve as fuel for your dreams of financial independence or new and interesting topics to discuss around the water cooler, one thing is clear: for those who are pursuing early retirement, there will be plenty of ways to spend their hard-earned dollars.


Do you think about future “fun” purchases like those above when dreaming of financial independence and early retirement? Have you budgeted or planned for any similar purchases or experiences? What technological advances do you most hope to witness in your lifetime? 

 

Dollarlogic: A Six-Day Plan to Achieve Higher Investment Returns By Conquering Risk

In today’s post, I will be reviewing the book Dollarlogic: A Six-Day Plan to Achieve Higher Investment Returns by Conquering Risk by Andy Martin.

Disclosure: This book review is not sponsored by Career Press, Inc., the publisher of Dollarlogic, nor by the author. As a result, the thoughts expressed in this review are unfiltered and unbiased. However, FinanceSuperhero was fortunate to receive a signed and dedicated copy of the book from the author.

Dollarlogic is available for purchase now via a variety of outlets; all links to the book contained within this review are Amazon affiliate links.

ABOUT THE AUTHOR

Andy MartinAs an active investment advisor and mutual fund manager, Andy Martin boasts a unique combination of hands-on advisor/investor experience and a deep research base of novel investment ideas. He began his investment career with Merrill Lynch and is cofounder and president of 7Twelve Advisors, LLC, an SEC Registered Investment Advisor, and registered representative, general securities principal with FINRA member firm, Girard Securities, Inc. Martin has worked in virtually every part of the securities industry, including operations, sales, management, product development, research, and compliance. His research has been published or reviewed in a wide variety of journals and publications. He is Series 7, 24, 53, and 65 licensed, is a graduate of Belmont University (BBA in economics), and Vanderbilt University (MLAS), and lives in Nashville, Tennessee.

For more information about Martin and 7Twelve Advisors, LLC, visit the 7Twelve website. You can also follow him on Twitter.

THE REVIEW

If the stock market was up 12% in a given year, what would you expect the return on your portfolio to be? If the stock market was down 12% in a given year, what would you expect the loss on your portfolio to be?

 

The above questions are just two shining examples of the critical questions Andy Martin poses in his quest to redefine the popular notion of investment risk while guiding the average investor toward greater introspection, wiser investing habits, and greater wealth.

As the title suggests, Martin, a 30 year industry veteran, lays out a six-day plan to achieving higher investment returns. This plan hinges upon one key fundamental: the minimization of risk, or what Martin calls dollarlogic. Explains Martin

You have heard it your entire life, and it is wrong. Risk does not equal reward. If it did, why would you wear a seat belt?

Many readers may initially be shaken by such a sudden challenge to their investment paradigm, but Martin’s evidence is compelling.

On Day 1, he leads readers to THINK about the fundamentals of risk and develop a healthy aversion to risk. By presenting a variety of statistics, financial and otherwise, Martin demonstrates several surprising truths about risk:

  • Acting in supposed “less-risky” ways can actually put you at more risk
  • A majority of successful entrepreneurs, while they may appear to be risk-takers, are actually risk-averse
  • The media perpetuates countless risk myths by misrepresenting statistics through sensationalist language (i.e. “The DOW plunged 45 points today”)

On Day 2, Martin makes a compelling argument, backed by decades of market statistics, that stocks are actually less risky than bonds. How could that be possible? As the chapter subheading states, “Your objectives, not the investment, determine the investment’s risk.”

What is an investor to do? On Day 3, Martin recommends surprising advice:

Seek lower returns.

While this sounds like nonsense at first, Martin makes a compelling argument that minimizing losses is far more valuable than maximizing returns. He provides an example of just how devastating losses can be based upon one year losses of 25% and 50% on a $10,000 investment:

  • If you lose 25%, or $2,500, you have to make 33.5% on your remaining $7,500 in the following year in order to break even.
  • If you lose 50%, or $5,000, you have to make 100% on your remaining $5,000 in the following year in order to break even.

Martin also proves that higher average returns, while a worthwhile statistic, are not always indicative of greater portfolio value due to the principles of geometric average and compound returns.

Average returns can be misleading (Graph credit to Andy Martin (@dollarlogic) and Career Press, Inc.)
Average returns can be misleading (Graph credit to Andy Martin (@dollarlogic) and Career Press, Inc.)

On Day 4, Martin exhorts readers to predict themselves, not the market. He reasons that an understanding of your goals and desired outcomes is much more valuable than an attempt to predict the market based upon past results. With poignant simplicity, he advises readers to consider where they are going instead of dwelling on where the market is going.

Days 5 and 6 are focused on the nuts and bolts of a wealth management plan. To the dismay of do-it-yourself investors, Martin recommends hiring a trustworthy, well-credentialed financial advisor who is a good fit with your personal temperament and objectives to manage a diversified portfolio which aligns with your objectives; his reasons are compelling, to say the least.

In my opinion, the one flaw contained in Dollarlogic may be information overload; for a book written for the average investor, many of the graphs and figures require a great deal of mental gymnastics for the non-investment professional to decipher.

In the end, it is ultimately the witty humor, Martin’s personal anecdotes, and the countless memorable and decisively true statements that drive Dollarlogic. As Martin states in his Introduction, Dollarlogic is not a book, per se, but a six-day investment management plan. While that kind of description might serve to turn away many readers, Martin expertly interweaves stories and investment principles in entertaining fashion. He concludes the Epilogue by quoting philosopher William James, who said

The greatest use of life is to spend it for something that will outlast it.

In one blogger’s opinion, Andy Martin has written an investment management plan designed to help the average investor do exactly that.

If you haven’t yet read Dollarlogic, order your copy from Amazon today. Don’t forget to follow Andy Martin on Twitter (@dollarlogic).


Readers, do you think the statement “Risk ≠ Reward” is accurate? Do you structure your investments to maximize returns or minimize losses? Do you have an accurate view of your own future?

Tracking Your Net Worth

Super Millennial LogoToday’s guest post is from a fellow superhero. Michael is the creator of Super Millennial. He teaches people how to evaluate their financial situation, simplify money management & automate their investments to reach their financial goals. Subscribe for his personal finance “Keys To Success” and blog updates here. Make sure to follow him on Twitter as well.

Note from FinanceSuperhero: This post greatly influenced me to begin tracking my own net worth in earnest. Ironically, when I started tracking my net worth for the first time in earnest rather than simply maintaining awareness of a ballpark figure, I was pleasantly surprised to find out that it was much higher than I had previously thought.

 

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Everyone wants to be a millionaire or billionaire, but to most people it’s just a dream and will stay that way forever…UNLESS you decide to make your dream a GOAL & work hard to achieve it.

If you’ve read “Think & Grow Rich” or Millionaire Next Door it should be evident how important goal setting is in all aspects of life, including finances. Wanting something is one thing, planning & going after it is another…one way to start focusing on becoming a millionaire (so you can ball out like DJ Khaled in any of his 80 music videos) is tracking your net worth. Even though I don’t think he has mentioned/screamed it yet, it’s a major key to financial success (trust me).

Do you know or track your net worth? I’d be pretty surprised/impressed if you are. Whenever I ask someone if they are I tend to hear the same few excuses:

  • “Why should I track it? Seems time consuming & doubt it’ll matter ”
  • “But I don’t have that much money…”
  • “What’s the point of tracking a few thousand dollars?”
  • “I’m way too in debt to want to see exactly how much”


It doesn’t matter if you have $1,000 or $1 million dollars, it’s amazing how helpful it is to track your overall net worth…and it takes five minutes a month!

I started tracking my net worth after reading J Money’s “Budgets Are Sexy” …. over the past eight years he’s been able to go from 50K to now 500K and shows exactly how. Needless to say I was very inspired to start…

I REALLY wish I would have started this earlier in life, I’ll be honest and admit I just started in late 2015 (around 9 months now) and within a few pay periods I was amazed at how much it factors into my financial decisions (& how good I was at saving). Don’t worry I’m not asking you to track every single penny you spend, because I know you won’t (nor would I), let Mint automatically do that for you.

I’m only asking that you do this once a month, not daily or weekly to really see your progression and how easy it become to get “richer” by paying attention to your finances.

Here are the top benefits of tracking:

Main Benefits:

  • Financial Progress: We all want to evolve & progress in anything in life, its human nature. It’s even better when you grow your $$$ & can look back to the month or year previous and see how far you’ve come. Progress is impossible without change! 
  • Confidence Builder: For example if you saved an extra $1,000 in your emergency fund or watch your 401K increase due to a bigger contribution. It will make you feel proud of what you’ve been able to accomplish (and want to do more)…..do you think millionaires just got there by luck? No they made a conscious effort to earn, save & repeat! 
  • Avoids focusing on just assets: If you have 200K in assets but 100K in debt you’re just lying to yourself, it’s important to factor both into the calculation.
  • Loans: Your net worth can be a factor if you plan on applying for a loan in the near future (i.e. banks feel more comfortable giving you a loan when you have good credit & money in the bank).


How should you track it? There isn’t one specific way but here’s how I do it and takes up 5-10 minutes each month. I pull up my Personal Capital account for most of my accounts and then add to a google doc (not all of my accounts sync w/PC). 

It doesn’t matter if you use it or a different version, it’s just important to get in the habit of tracking your progress. Make sure to include all accounts and a comments section so you can notate when there are major +/- changes (i.e. 401K increase, stock market drop 5%, tax refund, inheritance, etc).

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You’ll spend 5-10 minutes a month entering the information for assets & liabilities and it will caclulate your net worth.
Here’s what you should include:Assets

  • 401K – You have a 401K and contribute AT LEAST to your employer match right?
  • IRA – Roth IRA’s are amazing, if you need to learn more check this out.
  • Checking Account:  I personally use Chase, but where’ve you bank make sure you don’t have a monthly “convenience” fee and low ATM fees if you bank at another ATM. 
  • Savings Account: I love Ally bank – no fees & 1% interest is better than nothing
  • Brokerage Account: If you have one…
  • Additional Accounts: Any other investment, CD, money market, etc….

 

Liabilities

  • Auto Loans: This is an asset and a liability, if your car is valued at 25K and you have 15K left on the loan add the 25K to assets & 15K to liabilities.
  • Student Debt: Yes they suck but you gotta include them too…..
  • House: Same as the car example…this is an asset and a liability, if your house is valued at 250K and you have 150K left on the loan add the 250K to assets & 150K to liabilities.


Regardless of where you are financially, knowing your net worth can help you evaluate where you are and plan for your financial future. Once you understand your situation you become more aware of your spending/budgeting and can achieve both your short and long term goals.  

On top of planning and reaching goals it will also help you stay motivated and can be a huge confidence booster. It can also make you aware of your current investments and how they are fit for different market conditions. For example in February the stock market dropped but my net worth barely moved, I had such good asset allocation that the loss was minor in comparison to the market.

If you are not watching your personal net worth on a regular basis, you are skipping an important step in preparing for retirement (or EARLY retirement if you do it right). As always save early so you can thank yourself later. Once you have your tracking system setup hold yourself accountable to spend five to ten minutes to update monthly (use a calendar reminder or choose a specific day of the month).


Readers, don’t forget to head over to SuperMillennial to check out more of Michael’s superhero advice and follow him on Twitter.

Do you track your net worth? Have you found a better way? Let us know in the comments section below.

Redefining the Dream: Is Becoming a Millionaire Really Enough?

As a child, I spent a lot of time with my Grandma and Grandpa. They reached retirement shortly after my birth, and both of my parents worked full-time jobs. During the summer months, I spent one day each week with my grandparents. I will forever cherish the memories of eating homemade toasted bread and strawberry jam by the morning sunrise, the countless mornings spent building utility trailers with grandpa, sunny afternoons at the park, late-afternoon naps, trips to the pool, and the unparalleled hearty dinners from Grandma’s kitchen. Life was good.

During the school year, Grandma and Grandpa picked me up at the bus stop until I was old enough to stay home alone for a few hours. Those afternoons, too, remain as poignant memories. Grandpa and I often drove to the lake to feed the ducks, roamed the Earth in search of free lumber, or took his hunting dogs for adventures in a nearby wooded area.

During one particular walk in the woods, Grandpa and I wandered off the beaten path and onto a narrow, single track trail. At the end of this trail, we discovered an old, junked out car which had been left in a large hole in the ground. To the adventurous mind of a little boy, we had just discovered the equivalent of the Lost City of Atlantis.

I recall spending the remainder of that day thinking about that old car. Who had owned the vehicle? How it had gotten to its final resting place? And how had it had managed to sit in the woods untouched, year after year?

Grandpa knew how to entertain me, teach me to think, and lead me to dream big. This all came naturally to Grandpa, because he was an entertainer, a thinker, and above all, a dreamer himself.

Grandpa’s Dream

As I grew older, my adventures with Grandpa became less-focused on the things of childhood and more focused on life lessons and my future. Ever a motivator and encourager, Grandpa believed in me and had big dreams for my future. He said that I could be a doctor, lawyer, or businessman if I studied hard and earned good grades. Grandpa knew a thing or two about hard work, but he was the first to admit that he never saw a good grade in his life.

When I reached my teenage years, Grandpa became less-mobile, and our time spent together grew more and more sedentary. We traded walks in the woods for visits over coffee and cookies in the three-seasons room of Grandpa and Grandma’s new condo. Since Grandpa passed away in 2013, my biggest regret remains that I did not record more of Grandpa’s stories and advice.

One story, however, is permanently etched in my mind. One afternoon, Grandpa the told story of how he get started in investing. He explained that he had seen his neighbor drive by and wave in a brand new car every spring. One year, in his typical, rather direct fashion, Grandpa asked the gentleman how he could afford new cars each year. Unembarrassed, the neighbor told him that he had high-performing stock investments and that dividends were the key to his annual car purchases. He also spoke glowingly about his financial advisor.

In an instant, Grandpa had hatched a new dream far bigger than new cars. He wanted a piece of the pie for himself and for his family. Later that week, Grandpa went down to the advisor and opened a new brokerage account. The rest is history.

Secret Millionaires?

I grew up hearing faint whispers about Grandma and Grandpa’s wealth. They were thorough practitioners of stealth wealth, and while they owned their modest home outright and drove nice vehicles, they lived a minimalist lifestyle. The watched evening television in the dark, did not have central air conditioning, and rarely spent money. At Grandpa’s funeral visitation, an old friend told me that he once saw a moth fly out of Grandpa’s wallet. Literally.

Only one memory lingers as an indication that Grandpa and Grandma had money. Grandpa and I had just sat down for lunch at the kitchen table, and Grandma walked in from getting the mail. She handed Grandpa a piece of paper, which in hindsight was an investment statement, and said, “Well, you’re half of a millionaire.”

Grandma probably didn’t know I was listening (Note: She is still with us, so I will have to ask her soon if she remembers this story). Without knowing for sure, I suspect that Grandma was being modest. I am confident that their  investments represented only a portion of their assets. I was likely being thrown off the trail of two Secret Millionaires!

The Fruits of Their Labors

Among many the many benefits of their financial wisdom, Grandma and Grandpa were:

1. Financially Free. They had no debt, no obligations, and as a result, they could do virtually whatever they wanted when they wanted to do it.

2. Frequent Travelers. They vacationed a lot and visited every place which interested them.

3. Generous to Family. They provided weekly Sunday dinners for 20+ people, often took the entire family out to dinner, provided nice gifts for birthdays and Christmas, and gifted a one-time lump sum to each of their grandchildren one year in order to reduce their tax liability.

4. Proud Yet Humble. They knew they had earned everything they possessed, yet they never boasted.

My grandparents' home - where I learned to think and dream
My grandparents’ home – where I learned to think and dream big

A Contagious Dream

For years, I have desired to experience those fruits for myself. Ever since that afternoon at the kitchen table, my foremost financial goal has been to reach millionaire status. Not for vanity or bragging rights, but for the feeling of freedom, the ability to help other people, and to give away massive sums of money.

Today, as I write this article, I cannot help but wonder:

Will a cool million really be enough?

According to the life expectancy calculator at John Hancock, I can statistically expect a baseline life expectancy of 83 and a projected life expectancy of 93. Considering my goals of early retirement, it appears my nest egg will need to last upwards of 40 years! And what if I live to be 100?

Factoring in rising inflation and the decreased buying power of money as I continue to age does not increase my optimism that $1 million will be enough. Even if it were enough for me and Mrs. Superhero to live on, would it really permanently change our family tree? Would it benefit future generations of my family? Would it truly leave a lasting legacy?

I have few doubts that Mrs. Superhero and I will reach millionaire status, even though we are far from it at this point. But based upon the 4% Safe Withdrawal Rate, I question whether $40,000 per year will be sufficient.

The Dream Redefined

While I am an advocate for specific written financial goals, my target retirement number is surprisingly fluid at this stage in my life. Mrs. Superhero and I are focused upon eliminating our non-mortgage debt over the next couple of months, and I find it too distracting to focus upon too many goals at one time.

In the meantime, I am still dreaming of my own retirement. My dream is simple at its core:

  • Be free from the rat race–forever!
  • Enjoy carefree experiences with Mrs. Superhero, our siblings, and our future children and grandchildren
  • Work on my own terms in my future retirement, if I choose to do so, and answer to myself and no one else
  • Give outrageously
  • Change my family tree forever
  • Never experience stress due to work or money issues ever again

Until my dream is redefined again, this is my motivation.


Readers, what are your dreams for retirement? What motivates you? If you are currently retired, are you living your dream as you had hoped?