Here’s a simple statement many folks do not think about…once money is spent, it is no longer in your bank account. I did say it was simple.
Why do I mention this obvious fact? Because those who are aiming for the most expensive, high-priced status symbols don’t think to themselves that once they purchase that expensive luxury vehicle with all its bells and whistles, they are left with less money for retirement. This is a crucial piece of information for one simple reason: when you reach the age when you cannot physically work, that luxury sedan will not help pay your bills. Let that sink in!
One motto I do my best to live by is this: I will do today what others won’t, so I can live tomorrow like others can’t.
A Tale of Two Men — Consider Jones and Zeke. Zeke is a Frugalist; Jones is a stuff-accumulating spender. Their take-home pay is exactly the same. Jones buys the fancy house in the best neighborhood while Zeke lives in a modest home, in a modest neighborhood, and wisely invests. Jones leases a top of the line SUV while Zeke drives a domestic, used car. Jones insists on taking annual vacations to places like Italy, Australia, and France. Zeke vacations just as often but stays within the United States every other year. This pattern persists for 40 years, from age 25 to retirement at age 65. At that point, both men are forced to retire because their bodies just cannot perform like they used to.
Only one of them is prepared for the sudden change. One man has been accumulating wealth through his assets while the other spent away his wealth on status symbols. One man enjoys his mortgage-free home while the other wonders how he’ll afford his house payments without an income; he even considers selling the house he’s worked so hard to maintain. One man has the freedom to allot a portion of his retirement fund each year for living expenses and observes that he has more than enough remaining for leisure activities. The other realizes, with a heavy heart, that he has no retirement fund to speak of. One of these men calls his children and arranges mini vacations visiting each of them at their homes across the United Sates. The children of the other man see his number on the caller ID and refuse to pick up; he didn’t have time for them, so they have no time for him they think to themselves.
I don’t have to tell you which man is now living the best retirement life, do I?
Don’t let the traditional mindset of accumulating the most expensive ‘stuff’ rob you of accumulating the best assets, best mindset, and best memories which all will help you to achieve the BEST retirement possible!