I have been trying to reason out the best way to move forward financially.
I am not a man who is financially well versed. I (somewhat) understand the logic of how to earn money and the (overall) investment categories of savings, investments, real estate, and "things" (be they precious metals or other investments). I am at best an unsure investor because, truth be told, I have a very low tolerance of risk - in my world, savings would yield 8% a year and that would be great.
I am trying to think towards a future of some sort, a future that does not involve me doing what I do now.
I will be honest in that we have had some luck (more through dumb luck than my planning) in retirement accounts - it is nothing to get truly excited about (on paper and all), but for the first time in a long time we have something that resembles a net worth. Combined that with a very fortunate home purchase (literally, the last year we could have bought in this market) and maybe - just maybe - we have something to build on.
But that is just it - at best, it is just something to build on. Now I am trying to figure out how to build on that
1) Keeping putting into the retirement account - yes, as long as it continues to get me a tax break and I have a match. Free money (or effectively free money) is not to be scorned. In terms of investments, mine are simple and uncomplicated - and so far, seem to be doing okay. But this is a long term strategy at best.
2) Savings - I like savings. I like seeing money in the old bank account. I like having a small stock of it at home, "just in case". But frankly, I might as well just keep it at home - at best, I get nothing (literally) for having my money in the bank and even worse, I am watching the value of it being eaten away day by day (thanks, non-extant inflation which actually exists).
3) Other investments - I have a very small investment account, one of those micro-accounts, which I have invested with a very small weekly amount over the last two years. My ability to pick actual value is, well, bad. I am not matching the market at all. And the difficulty with stocks is that they are not liquid.
4) Real Estate - Yes, I sold real estate. I understand the various ways that it creates cash flows for you. At the same time, I understand the amount of debt it generates as well - and is another non-liquid investment in case of emergency.
I exclude from this the home we live in, of course - my only question here is how much to accelerate paying it off, which is an outcome of how long we are here. Or perhaps we hold it as a college home for Nighean Bhean, who is going to school here (and frankly, the house payment will be cheaper than the dorm!).
5) "Things" - This can include many things, from Precious metals (which I sort of understand, except the people that sell them promote them so heavily and seem to have such a high overhead that it makes me wonder) to other items that will hold their value (firearms, for example, would fall into this category. Swords, sadly, not so much). Things are hard to predict though, and can be prone to loss, damage, and having to be moved multiple times.
So there you have it. Five options, all of them inherently burdened with some level of risk or lack of desirability.
We are doing the other things, of course. Paying down debt (really, actually now making some significant traction on this. Hopefully by the end of this year or early next, we will be all but mortgage free). Working on reducing expenses. All of those sort of things.
But complacency is not the same as continuing to build towards the goal - in my case, not doing what I do. I think I will get there - I am just never really sure of the options, as there are no really good ones.
A retirement savings plan only makes sense for the young. If you're in your 50's and hoping to start one now - it's too late. But even if you had been financially perfect in your youth - what of it? Look at the world today and consider: in just the last decade Obutthole tripled the national debt. Trump is doing little or nothing to reduce it. The EU is almost at gunpoint with the UK trying to prevent a BREXIT. In Cypress, they forced the banks to give all their patrons a 10% haircut. They are on the verge of collapse. We are all flooding our countries with violent human trash and welfare cases from the third world. In an economic climate like that, all an RRSP is, is a collection of 1's and 0's in a computer somewhere. Maybe I am an alarmist, but I see a crash coming and it is going to be of epic proportions. I have RRSP's and I know full well that all it takes is a monkey with a pen and a political appointment - to wipe them out at a stroke. Every day more and more politicians tell me I have too much money and should be willing to share it with boatloads of imported coloured people that hate me as much as they do.
ReplyDeleteI'd eliminate all the debt that I could at this point. I'd try to stay fluid too; get a safe, several months salary stored physically in the home, and reinforced with precious metals as insurance. I like silver, myself. Top up the preps. I'd also begin the paradigm shift: there are TONS of things an old stubfart can do that are meaningful, productive, fun and free.
Finally - don't panic. You are going to have a GREAT retirement, TB. You may not be able to sale off to Japan on a 40 foot yacht when you turn 55... but you will have what you need, and a wonderful family to boot!
The fact you are thinking/working on all this means you are not being complacent, I think.
ReplyDeleteMaking NB live at home makes sense, too. And not just because of a dorm payment.
May God bless you with answers, TB.
Glen - Everything you say is true. In terms of economy, the last two presidents -even the one from the party that is supposedly against debt - have bumped it up to levels that will never be paid off. And I remember the lessons of Cyprus, and of Greece and the lessons of history (the confederate dollar in October 1865 was worth precisely zero). And you are very right that it could simply take one politician and pen once to give us all a haircut (but that is a trick they only get to do once - after that, no-one will put anything into a place they cannot quickly get to it.
ReplyDeleteThat said, I do the best I can. I get tax benefits for a retirement account and my company matches, so I am fool not to do it (at the present time). Debt is coming down nicely -we have paid off two and possibly three by the end of the year, leaving only one non-house debt - and are working on the savings as well. I am trying to find the most forthright way to buy silver as cheaply as possible.
Working on the "what can I do for free" as well - to be honest, part of that is tied to trying to work a normal schedule (probably worth a blog post of its own).
The funny secret Glen? I can be quite happy on little. I imagine my retirement will be different (me on a yacht sounds like a good excuse for me to drown!) than I picture, but that does not mean I will not try to plan for the best one I can, while reminding myself that living only for the future and not for the now is foolish as well.
Thanks Linda - I sure hope so!
ReplyDeleteTo be honest, living at home would cut the college expenses by 50%. That is a pretty significant amount in my book.
I’m finding that too, TB. I’m perfectly happy if I have something to read or do... just as long as I’m not stressed or in jail all is good!
ReplyDeleteI only have a couple k’s in silver and bought most of it from First Majestic, in 1/2 and 1 ounce rounds. I’m going to buy more just as soon as I get my next job. Give them a try! All ya need to do is start with whatever you can afford and just sit back and let it stack up...
If you want to get started in silver, TB - go slow and check out First Majestic. Buy a few rounds in one and 1/2 ounce denominations. I started with a couple ounces a month. It's fun, actually - the coins give me an amusing and foolish sense of greed and wealth when I handle them. ;)
ReplyDeleteThe way to look at metals is as insurance, not investment.
Thanks for the suggestion Glen! I will definitely check them out!
ReplyDeleteI have to say that when I count my junk silver, it does the same thing. Funny how a physical asset creates that feeling.