Posted by Dave on October 1, 2013
The problem with any personal finance plan, especially a retirement plan is that you’re playing a super long game that you don’t know will be successful until you’ve “made it” – which in a morbid way is dying before you run out of money.
Another long game that I play is physical fitness. I work out 2 or 3 days a week, basically lifting heavy things and sweating, with the hope I will survive for a reasonably long time. I monitor my body fat % and weight, and try to keep it within a reasonable range year-round.
There are so many “rules” written about personal finance and health, and as much proof as you need to back up claims. An example of a personal finance guideline is a 4% withdrawal rate from investments. There are so many people who think this is too high, while I have read several people who have reviewed the number and said it could be higher. When it comes to physical fitness, there are so many people who say that mindlessly running, whether on a treadmill or outdoors has minimal effect on your fitness level and may cause undo stress to your joints and body which actually decreases “fitness”.
At the end of the “game” (life), I may have done everything “right” according to whatever authority opinion or research I have decided to follow to achieve the optimal level of personal finance and fitness and still lose. I might have a debilitating ailment overcome me at age 47 and be out of money by the time I’m in my early 50s, which would defeat the work I’ve done on personal finance and health.
While I take the possible negative outcomes into consideration, I try not to dwell on them. These kinds of things could overwhelm me if I allowed them too. I prefer to base my plans on the more probable outcomes which seem (based on the research I have carried out) to have the highest chance of succeeding.
I have stopped long cardio sessions based on what I have read, in favour of “sprints” – this works for me because it takes less time (10 – 15 minutes vs. an hour of straight running) and based on studies conducted has about the same impact as running for considerably longer. I will always pick the more efficient way (as I am fairly lazy).
I have also taken on the financial plan that I have outlined previously:
- Get rid of all debt to increase cashflow
- Use excess cashflow to invest in income-producing assets
- Live off of income producing assets
Whether or not my plans (financial or otherwise) work out, I will really have no idea whether what I’m doing the correct thing. I’m just hoping I “win” the game and make it to a fairly decent age with enough money to do whatever weird thing it is I want to do at the time.