How Are You Doing? Time To Review & Reflect
How many times have you thought, “Why do I always have to learn lessons the hard way? -or- “Why couldn’t I have learned this 10-15 years earlier?” Even in my 80’s those thoughts still cross my mind.
When I wrote for MarketWatch, they dubbed me a RetireMentor. I don’t have fancy credentials, or a highfalutin designation on my business card, but I made it to my 80’s – done OK – and learned a lot along the way.
I was blessed with some wonderful mentors and realized it’s now time to pay back; sharing my life experiences, good and bad, hoping to make the journey a little easier for those who follow.
Friend Chuck Butler, a 16-year cancer survivor is a wonderful mentor. He helps me keep things in perspective. When my tongue cancer disappeared, I called Chuck. He explicitly told me, “Dennis you now have a new job. You are a cancer survivor, and you must now do what you can to help others.”
As each year winds down, I try to reflect and share some of my life lessons, hoping it will resonate with others.
Long-time reader Robert G. sent me a link to an interesting study, Rising to Top Net Worth, by Age.
It’s a cool, interactive chart where you compare your income and net worth to your peers. Enter your net worth on the bar and it shows you how you compare to your age group. You can follow a link to see how your income stacks up for those still working.
I remember the first time I saw one of these analyses. I was in my mid-40s, working my tail off and constantly feeling stressed. Some of my peers were doing very well and felt I was lagging behind.
A mentor appeared and suggested I read about “Male Mid-Life Crisis.” A couple of quotes help define the term and process.
D&D Family Attorneys explains:
“A male midlife crisis often refers to a ‘phase in a middle-age person’s life between the ages of 35 to 65 where they feel compelled to face or reevaluate their mortality, confidence, identity and accomplishments.'”
“While a midlife crisis is not an official medical diagnosis, it is a common phase among middle-aged people (typically over age 45) that can cause emotional upheaval in their lives as they come to terms with aging.
Signs that point towards male midlife crisis include: Feelings of dissatisfaction with career, marriage, or health. Feeling the pressing need to make major changes in life because time is short.”
Those two quotes nailed it for me. My children were leaving the nest; I worried about getting them through college and being able to retire. There never seemed to be enough money to eliminate worries. I told friends I felt “I was racing to beat the heart attack.”
The children left, I divorced and saw many friends on the same path…starting their lives over emotionally and financially. I took a major step backward financially, realizing I needed to make some major changes.
I married Jo a few years later and she helped me go into business for myself. Things went well; I felt like I was financially catching up with my peer group. With some good planning, hard work and discipline, we might have some fun and be able to retire.
As each year wound down, I would compare our income and net worth with the rest of the world. We could chart our progress; emotionally it was very reassuring.
Following are some major points I’d like to share.
Wealth versus Stuff. I saw friends driving nice cars, playing golf at the finest country clubs, taking nice vacations, projecting the appearance of doing well. I’d been doing much of the same thing. I finally realized, despite a good income, toys were financed and we had little true net worth. Do not confuse stuff with wealth. Wealth is what you own…not to be confused with stuff and monthly payments.
Living below your means is how to accumulate wealth. My youngest son asked me how I started over financially at 50 and got back on track. I explained my company did well and my earnings had increased. At the time he said, “So, you earned your way out of the hole and caught up?”
I said yes, but missed the point. Earning a good income helped, Jo and I had fun, but we still lived well below our means. Our first checks every year were into our retirement accounts and savings…then we could play with the rest. At year-end, the most important number was the increase in net worth year-over-year.
If we took a major investment loss, my earnings made little difference, we had to make up for it the next year – net worth had to continue to grow.
If you spend all you earn, particularly in your peak earning years, you will not accumulate wealth. Focusing on wealth accumulation, not keeping up with the Jones’ should take priority.
Get out of debt ASAP. Being self-employed, I never had a guaranteed paycheck. I felt constant stress of debt. From a health perspective, I needed to get rid of the stress. The best prescription was to make becoming “debt-free” our top priority. We paid off our house and vowed to never ever borrow money again. Had we not done that, I feel the stress would probably have got to me – as many doctors warned.
Sadly, we have friends who continued spending lavishly, nice cruises, you name it…and they are in their 70s (and 80s) still working to make ends meet.
Several friends who have done well, changed their lifestyle, downsized, and did what was necessary to prepare for the future. Once you get past a certain age, a financial do-over is almost impossible.
Don’t be penny-wise and pound-foolish when it comes to health insurance. While it’s prudent to be a good shopper, healthcare costs are rising and the government is continually cutting back. You don’t want to be faced with doing without medical care because your insurance won’t pay for it.
Plan well, but NEVER trust the government. Building a solid retirement plan reduced my stress considerably. It was an “epiphany moment” when I first completed the process – a real wakeup call – we better change our saving/spending ways or we will never be able to retire.
We worked together, set goals, followed the plan and thought we were set for life. All the “experts” told us to project 2% for inflation and depend on 6% interest from CDs.
The government-sanctioned 2008 bank bailout dropped interest rates to historic lows, destroying every public and private retirement plan in the process. Every retiree and pension fund that counted on safe, worry-free income took a huge cut in pay because of the government.
The Fed has now raised interest rates near what was considered normal. The consequences of the “free money” will affect us all for decades. The government borrowed and spent trillions, not worrying about how to pay the interest. Government interest cost is now rocketing toward $1.5 trillion annually, yet they make no effort to cut deficit spending.
Something has to give. Jo handed me today’s mail announcing a 3.2% Social Security COLA increase. They raised our health insurance premiums and our net will drop over $150/month. The government can’t keep its promise to retirees, it will get worse.
Bill Bonner writes, “Nothing for Something“:
“So it comes to be that when a generation of Americans got something for nothing, the next generation got nothing for something. It must pay $1 trillion-a-year just to keep up with the interest on the things their parents and grandparents consumed.
…. Already, the cost of the interest on the US debt comes to about $10,000 per family per year. Soon, the debt will pass $40 trillion…and then $50 trillion (there is no plan to cut it back). …. Extra borrowing will have to be met with higher interest rates and more money printing. At 8% interest, and $50 trillion outstanding, the interest charge will come to about $3 trillion per year. That will be $30,000 per family.”
How the hell are people supposed to save money? The middle class will get hammered with tax increases to pay the interest for the government sins of the past.
Don’t get discouraged. Our grandparents didn’t have credit cards, bought what they could afford with cash, and avoided debt at all cost. My grandfather preached about “debt slaves” and he was right. A little common sense and discipline will help you along the way, despite what others are doing.
For years my doctor reminded me that I would be healthier and happier if I lost some weight. I asked him why we went through the drill every physical. He surprised me when he said, “Sometimes you remind people what they already know, and you’d be amazed how many finally hear you and take action.” I’m hoping sharing my experiences might resonate with some readers and make the rest of their ride a little easier.
While the old saying, “Too soon old, too late smart” may be true…the sooner we catch on the better.
A little help goes a long way!
When I started Miller On The Money nine years ago, I vowed to keep our newsletter FREE! I’ve kept my promise.
I agree with Henry Ford’s quote, “Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.”
Writing and publishing our weekly articles is not only time-consuming and expensive, but also a labor of love. Regardless of our age, we all benefit by keeping our heads in the game.
Why did I choose to keep our letters free? Some readers may be on limited budgets and may benefit the most from our advice.
Several readers urged me to add a donations button. I was reluctant at first, but soon learned it’s doggone exciting when someone pitches in and helps out. Positive feedback for sure. Readers’ kind comments and financial support help offset our cost and keep me going – both financially and emotionally.
Donations are our primary source of financial support; we don’t peddle your name to anyone. I’ve turned down proposals from advertisers, feeling their offerings were inappropriate for our readers. Reader donations are much appreciated, however, it’s strictly voluntary – no pressure – no hassle!
Click the DONATE button below if you’d like to help.
You do not have to sign up for PayPal to use your credit card.
And thank you all!
On The Lighter Side
I hope everyone had a wonderful Christmas, surrounded by loving family and friends. While the holidays can get very hectic, it also provides a time for all of us to reflect upon what is really important in life.
No matter how old we are, we still remember special, wonderful Christmases past. I hope everyone had one of those special times you will remember fondly forever.
This week we turn the corner and begin looking forward to the New Year which will bring plenty of challenges. I’ll not make any predictions other than to say “Expect the unexpected!”
May 2024 bring good health, happiness and prosperity for all.
Quote of The Week…
“I hope you realize that every day is a fresh start for you. That every sunrise is a new chapter in your life waiting to be written.” — Juansen Dizon
Jo found some neat New Year’s humor:
- “He who breaks a resolution is a weakling; he who makes one is a fool.” — Farquhar McGillivray Knowles
- “Stir the eggnog, lift the toddy, Happy New Year everybody.” — Phyllis McGinley
- “Last year’s resolution was to lose 20 pounds by Christmas. Only 30 pounds to go.” — Anonymous
- “Many years ago, I resolved never to bother with New Year’s resolutions, and I’ve stuck with it ever since.” — Dave Beard
- “Tonight’s December thirty-first, something is about to burst…Hark, it’s midnight, children dear. Duck! Here comes another year!” — Ogden Nash
- “May all your troubles last as long as your New Year’s resolutions.” — Joey Adams
- “New Year’s resolution: to tolerate fools more gladly, provided this does not encourage them to take up more of my time.” — James Agate
And my favorite:
- “If you want an interesting party, combine cocktails and a fresh box of crayons for everyone.” — Robert Fulghum
In the words of the famous Wolfman Jack, “See Ya on the flip side!”
Until next time…
“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken
Affiliate Link Disclosure – This post contains affiliate links. If you make a purchase after clicking these links, we will earn a commission that goes to help keep Miller on the Money running. Thank you for your support!