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TWELVE PERCENT. THIS is a pivotal number in my financial life.
What does it refer to? Is it the average annual return on my investments? I wish. Is it the percentage of my pre-tax income that I dedicate to retirement savings? No. That number, including pension and 403(b) contributions, is closer to 25%.
Instead, that 12% is the slice of my pre-tax income reserved for housing. When picking a place to live, I’m a cheapskate.
THOMAS JEFFERSON once said that eternal vigilance is the price of liberty, and the philosopher Socrates opined that the unexamined life isn’t worth living.
Although they were talking about political freedom and personal philosophy, respectively, Jefferson and Socrates could well have been discussing personal finance. One of the best ways to engage in financial vigilance and self-examination is to keep a daily financial journal.
I’ve kept a personal journal since I was 14 years old,
WHO’S YOUR FINANCIAL hero? This should be someone whose qualities and character lend themselves to emulation in your own financial life.
Let’s set some ground rules here for picking a financial hero. First, your hero probably shouldn’t be the usual suspect: Warren Buffett. While Buffett is certainly a very successful investor, the investment game that he’s playing is very different from the one most of the rest of us are.
The same goes for folks like Elon Musk,
DO YOU REMEMBER the days before you could drive? You felt like you were on a leash. No freedom. No fun.
I have news for you: Those days could return.
One of the post-age-65 nightmares that we don’t talk about enough: Most affluent retirees live in the suburbs. Homes are miles from grocery stores, medical offices, movie theatres, restaurants and—perhaps most important—drugstores.
In the suburbs, the stream of city-based public transportation usually slows to a trickle.
AS ALWAYS, DR. SEUSS said it best: “Oh, the places you’ll go and the people you’ll meet.”
In making this statement, the good doctor could have been talking about the benefits of volunteering. Since inheriting some money in 2011, I haven’t had to work multiple jobs, as I did in graduate school and during the three years that followed. From 2012 on, I’ve had mostly full-time work, leaving me with time to volunteer for causes I care about.
I’M IN NO HURRY TO retire—but I am making sure I’m prepared. I’m age 56, and I plan to work full-time until 70 and part-time until 75. I’m an English professor, and I enjoy teaching, service and scholarship. I also enjoy having three weeks off at Christmas and two months in the summer.
I received a fairly large inheritance, which has been growing over the years and which will allow me to do some special things in the years to come.
WORD ON THE STREET is that, if you want to use money to make yourself happy, you should buy experiences rather than things.
In principle, I couldn’t agree more.
There is, however, one kind of experience that I see touted both in the media and on social media that I don’t think reflects money well spent: the expensive family vacation to a distant destination. This status-symbol experience, complete with selfies at ritzy hotels, is supposedly designed to create priceless memories.
I SAT IN THE LAWYER’S office in Erie, Pennsylvania, in the summer of 2011. He was handling the high six-figure inheritance I was about to receive. I should have been overjoyed, but I was exhausted.
In fall 2004, my mother, a 70-year-old former elementary school teacher, had suffered a massive stroke and developed vascular dementia. My father, a 76-year-old former elementary school principal, had tried to take care of her by himself. He fell ill in summer 2006 and died that fall.
Comments
I've been relatively lucky in my academic career. But I was minted in November of 2007. The job market, never great for those with PhDs in English, disappeared for about three years. Sometimes, generational cohorts get very lucky. The post WWII generation was very, very lucky. Gen X? Not so much.
Post: Luck Would Have It
Link to comment from May 27, 2024
Interesting question. So, my assumption is that I will stay at home and have all the expenses I did before needing help. I plan on buying a condo for retirement. I could pay for it in cash, but I'll probably take a mortgage. So, the 200k is on top of normal expenses. If I actually do have to go into a nursing home, your assumption would be right. Thanks for the comment.
Post: Belt and Suspenders
Link to comment from February 14, 2024
Thanks, Jack, for the comment. Here's one of my sources for the three million dollar retirement for Gen Z: https://finance.yahoo.com/news/thanks-inflation-gen-z-millennials-110023737.html. I agree that that amount seems staggering. Thanks, again.
Post: Belt and Suspenders
Link to comment from February 14, 2024
I have a KPERS cash balance plan and a 403B through JCCC.
Post: Belt and Suspenders
Link to comment from February 13, 2024
Students write money memoirs. Then they write reviews of Minimalism, by Joshua Millburn. We do an analysis of Secrets of the Millionaire Mind. And then we write about David Harvey's A Brief History of Neoliberalism and Helaine Olen's Pound Foolish. My impression is that students feel that they are really walking uphill. They're going to need 3 million by the time they retire. They're horrified by student debt and by the cost of housing. The class implicitly asks them to put the personal responsibility myth alongside the chaos of neoliberalism. It's not really about my ideas; it's about theirs.
Post: Belt and Suspenders
Link to comment from February 13, 2024
I did inherit, and I've said as much. There's a link to the article in which I talk about it. It's a very interesting trajectory. My grandfather on one side was functionally illiterate. On the other side, there was a shoemaker. My parents were Greatest Generation babies. Dad went to college on the GI Bill and mom got a scholarship. The most my father ever made was 42,000 in 1985. They were just massive savers. As for the quotes around "hard work," you weren't around when I was caring for two dying parents and teaching 29 credits a semester at 4 schools and publishing. Frankly, you're not around now when I pull 13 hour days. Most people in the middle class make far more than 700k in a lifetime. I'm from a family of savers, and I still save. I save 1400 a month beyond my 403b contributions. I don't rest on the work of others.That wouldn't honor my parents. The inheritance, for the most part, has been saved. I live way under my means and always have. It will provide some nice treats in my late 60s and then be given to charity when I die. It's not my eating money or my healthcare money. Money doesn't change values, or it shouldn't. Thank you for your comment!
Post: Belt and Suspenders
Link to comment from February 13, 2024
Thank you. I come from a family of savers. The pay has gotten better over the years.
Post: Belt and Suspenders
Link to comment from February 13, 2024
Thank you for your comment. There were a lot of changes. However, I consider myself very, very lucky. Many people with PhDs in English never find any fulltime employment at all. It's outside of the scope of the discussion here, but William Pannapacker wrote some pretty amazing articles in the Chronicle of Higher Education about the fate of people who get PhDs in the humanities. It is possible to get a career these days, but it is not easy.
Post: Belt and Suspenders
Link to comment from February 13, 2024
If I'm understanding WEP correctly, I'm not subject to those provisions. I've always paid social security at every place of employment. I think people teaching at Texas schools have this problem. Thank you for the comment.
Post: Belt and Suspenders
Link to comment from February 13, 2024
Thank you for your comment. I think I'm going to stick with the market on this one. I am single and don't need permanent life insurance. I also have other assets not discussed here that will provide the "spice" of retirement, and they will be my legacy, probably to a charity.
Post: Belt and Suspenders
Link to comment from February 13, 2024