Thinking Like Old People

I am not a number cruncher. And I am not old enough to think about retiring.

Nevertheless, David and I recently did the unthinkable (well, to me) and did some serious retirement and financial planning. David has always led the way on this front, as his family did an amazing job teaching not just about saving but about real planning. The guy has had the beginning of a retirement fund since he was 14. I, on the other hand, was introduced to the envelope system and honestly shut my eyes to anything beyond a simple savings account. For that reason, I’m incredibly thankful for David’s go-get-’em attitude, as I’d rather live in blissful denial that world runs on money.

Anyways, we met with Luke, a fellow Grove City College grad who happens to be in the financial planning industry. We discussed many, many options, and I’d be lying if I claimed to understand the full implications of each option. Roth IRAs, whole life vs. term life, disability, etc… I don’t thrive off that kind of planning. Still, I left those meetings with a sense of satisfaction, happy that we’re laying concrete plans for what is a necessarily uncertain future.

Now, here’s why I mention this on the blog. For me, ignorance was bliss because the world of mutual funds and insurance was just too messy and too far away. I’m not a particularly gifted number cruncher, and thought I had to have it all figured out before I could do act on those goals. But figuring it all out was just too daunting, and gave way to fear — of the unknown, of the enormity, of you name it. I suspect many people our age are in the same boat. We don’t want to let our money “rule” us, and we fool ourselves into thinking that just wisely saving our money is enough. Well, squirreling away for the emergency fund is a good start, but our apparent lack of concern for money isn’t what it seems. Reality bites, and we’re going to pay for our lack of concern later, when we have to sink even bigger amounts of our earnings into retirement accounts to make up for lost time. It’s not a pretty picture.

Let me summarize it like this: those of us who dislike dealing with finances often think we’re avoiding one of life’s unpleasant aspects, and we’re above such fleeting concerns. That’s not true. In these cases, money still has power of us in the form of fear.

I don’t want to be pinching pennies when I’m 60 or 70 because I failed to steward my money wisely. Sure, the economy could always go belly up or the dollar could fall off the precipice. But in those cases, my emergency fund won’t be much help either.

David and I have adopted a pretty simple philosophy when it comes to our financial habits: we want to live in a way that lets us be generous. And I’m realizing more and more that advanced planning is the way to do that. Steadily investing today gets me in the habit, yes, but it also frees from more burdensome amounts in the future, thanks to the wonders of compound interest, reinvested dividends, generally steady growth and the like.

So here are my take-home points after this foray into financial planning:

1. JUST DO SOMETHING. No one knows what the market will be doing in 50 years, and most of us don’t want to become experts in banking and investing. That doesn’t mean we should wait to do anything. Invest now in mutual funds, gold, whole life, whatever fits your goals, and then stick with it. Because here’s the second point:

2. $1 today will easily be worth $5 down the road. If you wait to prepare, it’s necessarily going to be more expensive. That messes with the ability to give and be generous, because you’re playing catch-up. That dollar might feel like a lot today, but the cost of not putting it to use is even higher.

And so are the thoughts of one admittedly skittish investor who would rather the world run on good deeds and kindness. But I’m realizing that the goal isn’t a huge nest egg — the goal remains stewarding what you have so you can be a blessing to others. I like that goal.

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