“It is not realistic to finance a 30-year retirement with 30 years of work. You can’t expect to put 10% of your income aside and then finance a retirement that’s just as long.”
– JOHN SHOVEN, Charles R. Schwab Professor of Economics at Stanford University
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Everyone in life has a period in which they have to put in more effort if they want to live well for the rest of their life. That time is usually between the thirties and fifties. In those years, people are in excellent physical and mental condition, and they can get the most out of themselves. Unfortunately, most people don’t think about that. They usually become aware of this around the age of fifty or later, when health deteriorates a bit, living costs rise, and good opportunities pass. All that remains is pessimism and fear of the future.
If you are looking for a way of least resistance at the age when you should be giving more of yourself, there will come a time when you will become aware of your mistake. Look around you; you have as many examples as you want. When luck changes, people are forced to depend on someone else’s help and accept jobs they didn’t hope for because they didn’t think about it when the time was right. When that happens, it is much harder to turn the situation around for the better.
When the idea of the government retirement plan (Social Security) was created, there were many more workers than retired persons. Life expectancy was much shorter, around 60 years; a good percentage of people have not lived to see their retirement at all. Thanks to modern medicine, people today live much longer, often over ninety years.
The ratio of employees to retirees is much smaller these days. Soon there will be more retirees than employees. By the time you retire, the percentage of salary you set aside will not be enough to provide you with enough money for the next few decades of sitting in front of the TV.
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Lifelong education and personal development are no longer a matter of choice, but something mandatory. Due to the dizzying developments of technology, much of the business that exists today will soon no longer exist. Only through continuous education can you keep up with the progress and adapt to a situation that changes every day.
The way of least resistance never yielded good results, but things used to go much slower, so people could slip under the radar. For years, you could do jobs that required a minimum level of investment in yourself and receive a decent salary. That is no longer the case.
If these facts disturb you, ask yourself when the last time was that you spent a hundred hours learning something new, paying for a course that could help you get a better job, or making a good plan and sticking to it for a long time
Huge differences in income and opportunities
If you look around, you will see that the differences in job type and income are huge. Someone launches rockets to Mars or manages parts of large companies, receiving a salary that looks like a lottery winning, while someone else does hard work for a minimum wage that decreases while working hours increase.
The huge gap that has arisen due to the development of technology and modern jobs will become even bigger over time. It will benefit those who invest in themselves, while those who do not will be offered worse and worse jobs. Someone will invest thousands of hours in their knowledge over the years while someone else will invest nothing. Where you will find yourself is your own decision.
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Cost of living and a dying pension
The cost of living is usually rising, rarely decreasing. When you are young, you are responsible only for yourself. You’re rushing through life, and you don’t care much about tomorrow. But sooner or later you start a family, and things go the other way. You need a place to live and a car; children go to school, take excursions, play music, and practice various sports. They need a truckload of equipment and everything that goes with it. Some of them go to college, and you know the price of that.
As you get older, no matter how little money you need, it’s harder to earn it. Given the cost of healthcare, a healthier lifestyle today can preventatively save huge sums of money that you would otherwise leave to doctors and pharmacies one day.
For a large number of middle-aged people, the biggest fear is that they will outlive their own savings (which most do not have at all), or that their pension will not be enough for a normal life when the time comes.
Your financial situation – a reflection of your lifestyle
Your habits and lifestyle reflect on your financial situation, and vice versa – your financial situation supports your habits and lifestyle. What no one wants to hear is that two coffees (or beers) a day, a box of cigarettes, and a few useless subscriptions over the course of twenty years can decide your child’s college, a new apartment, or something else you’ll need sooner or later.
Calculate if you want: about 7,000 days multiplied by $10 a day (which you can easily throw out) is more than $70,000 you spent along the way without even noticing.
Put on paper how much you spend per year on living expenses, entertainment, vices, and everything else. Don’t skip anything. You won’t be pleasantly surprised, but it’s an important step to start taking care of your own finances. You’ll find that you can throw out a good chunk of it, saving yourself quite a bit of money that you can invest in something smarter. More importantly, when you get rid of unnecessary and bad things you spend money on, you will improve your own health and free up extra time to work on things that are important to you in life.
A good financial situation in life does not arise by chance. People who have a good financial situation are constantly working on it. If you want a better life, don’t just think about how you’ll work as little as possible or how you’ll spend your hard-earned salary.
Invest time and money in education and work on yourself. It is the best investment. Look for better jobs and set bigger goals. In everything you do, do your best, not the minimum. If you do so, your self-confidence will be high, and your financial situation will be much better over time. If you sit at home and wait for good opportunities to come to you, this will not happen. Doing so will completely undermine your own self-confidence, and any change will seem daunting to you.
Conclusion:
Get the maximum out of yourself instead of the minimum. Only then will you be satisfied with your own life. Lifelong learning is a much better option than living in fear of the future. Stop reading things that fill you with feelings of helplessness. Read and learn what can help you in life, and always look for new options.
If you start educating yourself today in something that interests you, you can become an expert in it in a couple of years. By developing your skills, you will keep up with the changes, new opportunities will open up for you, and your life will be much better in every sense of the word. The number of options is unlimited, and there is only one way – invested time.
Links:
- Free downloads: PDF and the audiobook Fulfilling Life: A matter of Personal Choice with all the accompanying checklists you need to get started
- Great Books for a Great Life – all the answers to your questions in one place
“In order to write about life, first you must live it.”– Ernest Hemingway