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Friday, March 24, 2017

Does it Still Count as a Vacation When You’re Retired?

Posted by Dave on November 30, 2010

This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any.  Dave is from Ontario and is working towards his CGA certification.

Next week my wife and I, along with six good friends, will be going to Mexico for a week (Cozumel if anyone is interested).  I am really looking forward to the trip, as it will be my first significant break from work and school combined that I have had in the past two years.  I have an enormous list of books that I have been holding off on reading until I have some time, and I hope to put a significant dent in those during this week off.  The trip south will be a nice break before Christmas, which usually turns out to be  a pretty hectic couple of weeks in December.

I’m wondering if I will feel the need to travel once I am done full-time work.  I know I will probably always want to go someplace warm when it is cold in the winter, but at the same time it is pretty expensive to pay for a trip every year or two just to warm up for a week.  I am not really a “tourist”, meaning I don’t really do touristy stuff – I’m just not all that interested in going to see museums, galleries or other historically/culturally significant sights or attempting to immerse myself into a different culture.

Given that my idea of a good trip is warm weather and some books – maybe I should just crank the heat in my house for a week to 30 degrees (compared to the 19 or 20 degrees it sits the rest of the winter when we’re home), fill my fridge with booze, hit up a tanning booth for a bit and order takeout for the week? This plan would provide a much cheaper “vacation” and I wouldn’t really have to go anywhere.  The end result would be the same as well – a hangover, relaxation and weight gain.   I think my wife would like the heat thing, but I don’t think she’d agree with me that it’s the same, even though she is not a “tourist” either.

I think that as I need to work less and less, my desire to “get away” will also deteriorate –I will already be “away” from everything, meaning less stress, more sleep and more time to do what I want to do.  At that point we will probably still travel, but that would be more to see friends who live all over the country than a desire to go somewhere.

Are you a traveler?  Do you enjoy the experience of going to new places and seeing different things?  How much of your retirement budget do you think you’d allocate to going to new or different places once you don’t have to work anymore.

Money as a Renewable Resource

Posted by Robert on November 29, 2010

This is a guest post by Robert, who lives in Calgary and works as a financial adviser. He is married, has three kids and plans to retire at age 35.  Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.

My kids don’t really understand what I do at work. They know I leave each day to go to the office, and I come back around supper time. They also know that when we go grocery shopping, I bring my credit card and I use it to pay. So they’ve come up with the idea that, while I’m at work, I make money and put it onto the credit card. And I guess that isn’t so far from the truth. My boys were watching cartoons the other day and there was an episode where the kids were being the parents and vice versa. The kids decided to take all the money out of the bank to buy toys and ice cream. My boys, of course, didn’t see the humour in this “plan”. To them, it just made sense.

The decisions that we make about money flow from our ideas about money. The reason my boys would empty the bank account and buy toys and ice cream is because they see money as a renewable resource. If we spend our money now, Dad just goes to work and earns more. Then we can buy more things. If we can’t buy something now, we keep working until we can. And in many ways, they’re right. I suspect that many adults have never moved beyond the concept of money as a renewable resource.

In my own personal finances, there are some ways I relate to money as a renewable resource. Most of these involve automatic or recurring payments. When I was first married, we rented an apartment. As long as I earned money, I could pay rent. If I stopped paying, I would have nothing to show for it (ie. home equity). Debt feels very similar to rent. Now that we own a house, I have a mortgage. I make monthly payments to be allowed to continue living here. With most mortgages, however,  missing a payment is almost as serious as missing a rent payment. My food budget is another example of treating my money as a renewable resource. Each month I earn money because, short of stockpiling food, each month I need to buy food to feed my family.

I used to wonder why some people save while others don’t. I also wondered why some people could spend so much money. I think the answer is in the way they view money. These people, like my kids, see money solely as a renewable resource. Every month, there will be more money, so there’s no reason to save and there’s no reason not to spend it all. At the extreme, these people have no qualms committing all their money to debt payments, to the full extent their bank will allow it. And much of the time, this works fine.

One character from The Office, Creed Bratton said something that struck me. He said, “The only difference between me and a homeless man is this job.” That’s probably true of far more people than we would like to admit. This is where people get into trouble if they can no longer work. Whether they lose their job or become sick or disabled, their ability to generate income is their only way of maintaining their lifestyle. If these people lose their jobs, they must make radical changes to their spending. Personally, I prefer more predictability.

In what scenarios do you see money as a renewable resource?

Wander Reading #31

Posted by Tim Stobbs on November 26, 2010

As some of you might recall I didn’t have a post one day last week and I had asked for suggestions on why that happened.  My favorite response was from Matt:

There was no post today because… I was to busy preparing my watermelon for the big game Sunday.

Now since the Roughriders won that game and are in the Grey Cup this Sunday I thought it would be appropriate to have a link post that celebrates the team.  After all in Saskatchewan this is our second flag and the premier even declared today ‘Green Day.’

And finally the links!

Apparently we are shopping earlier now for Christmas.  Thanks a lot, now I feel really behind!

I was shocked to see this rule change for RRIF withdrawals that might screw over low income seniors. Hopefully they change it.

There are several proposals floating out there to change the CPP.  I like this article for pointing out the obvious, nice idea, but who pays?

Retired Syd asks: why is sex better in retirement?

Million Dollar Journey just paid off his mortgage! Yet what is really neat was he did it in…three years?!?

An interesting article on: why do we vilify the Rich and Successful?

QUICK – Head over here to enter a draw to win a copy of The MoneySense Guide to Retiring Wealthy.  Deadline is tonight.

Then the Financial Blogger has some advice when you hate your job.

Squawkfox is getting a lot of media attention lately, but she really wants is the cover of Vogue. While you are there check out this great article on holiday table decorating.

Have a great weekend everyone!