Posted by Robert on January 16, 2012
This is a guest post by Robert, who lives in Calgary and works as a financial advisor retired at 34. He is married, has three kids. Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.
Thinking back two years or five years or ten years, how did your earnings then compare to your earnings now? Due to improving skills, seniority and inflation, many of us earn a larger income over time. In my experience, as people earn more, they choose to spend more.
For example, I worked with a young couple who were both employees of the provincial government. As we reviewed the information about their benefits, it quickly became apparent that they would be able to retire between age 50 and 52 with a full pension. After that conversation, they decided to increase their spending, buying a rental property, buying a vacation property and buying a new car. If they’re going to be able to retire early anyway, the thinking seemed to be that they might as well spend their excess income.
For the people that I advised, the retirement age of 60 or 65 seemed to be a constant. When they earned any extra money, they chose to use it for additional spending. In this way, once they were on track to retire at age 65, the variable was how much they spent on their lifestyle in the meantime.
When I began earning an increasing income at work, I chose to hold constant my present spending. As I earned more, I started by paying down more debt. Then I used more money to invest (given the market opportunities). Because my additional income went to increasing my net worth, my retirement date moved ever closer. For me, the variable was when I would be financially prepared to retire.
Everyone in our society has the ability to be creative with how they use their money. Many of us are lucky to earn more than we need to survive. That excess money can either be used to increase spending and current enjoyment, or to bring forward the time of retirement (while holding spending constant). Do you make a conscious choice of how to handle additional income? If so, how do you choose where to allocate it?
Posted by Robert on December 26, 2011
This is a guest post by Robert, who lives in Calgary and works as a financial advisorretired at 34. He is married, has three kids. Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.
One of the frustrations that I felt while working was that I rarely saw my family at their best. I would leave very early in the morning, usually before they were even awake, and I wouldn’t be back until dinner time. By then, I was tired from a long day at work, and they were tired from school and activities. Dinner was usually a rushed affair, after which we tried to keep the kids from making a mess with their toys, then struggled to get them into bed. Only on weekends did I really have the time and energy to enjoy my family.
Now that I don’t go in to work, I help my oldest get ready for school in the mornings. I get to spend time with the other kids while they’re still happy and energetic. In the summer, especially, I can take them for walks or bike rides or go play at the park. Winter means more reading, trips to the grocery store or pet store (just to see the animals) and playing computer games.
It’s not perfect. Where I used to feel frustrated that I didn’t spend enough time with my kids, now I sometimes feel like I’d prefer a break from them. My wife has little sympathy, and says that now I can begin to appreciate how demanding it was for her to spend her day with small children. No wonder she wanted to just curl up with a quiet book in the evenings. As the kids get older, however, they are more able to play by themselves or with each other. The oldest one can even read to his brother and sister now, if they want.
Even though life is never perfect, and there will always be difficulties, not matter what path we take, I’m glad to be able to spend more time with my family. What will you spend more time doing, when you have the chance?
Posted by Robert on October 3, 2011
by Robert
It took me a long time to come up with a blog post that I was really happy with. I thought and thought, and finally came up with a good story and some insight about taking personal responsibility. I don’t know if I pressed delete instead of publish, or if I turned off my computer without saving. Either way, it’s gone.
I apologize for not having original content available for this morning. Instead, please accept this link to a Vanguard article about Scott Adams’ One Page Financial Plan. It’s good.
https://retirementplans.vanguard.com/VGApp/pe/PubVgiNews?ArticleName=DilbertGuidetoPersonalFinance
