Growing up I saw my dad struggle to put food on the table. He worked long hours. He worked weekends all summer long (in the agriculture business – and during the picking/canning season he was always on call).
He put up with a##hole bosses who took credit for what he created. He was the go to person when the CEO needed results. But the “Yes Men” were the ones who’d get promoted and big bonuses.
And then the company went bankrupt. And he lost his job. And his pension. And had to start over. After over 20 years of dedicated service to the company.
Starting over sucks!
This video addresses many of the raw-deal realities realities my dad faced – that are now facing the Millennial Generation.
Although there have been many advances in technology and basic necessities that used to be considered luxuries – and would make you among the richest people in the world, there are some pitfalls and half-truths that can derail the unwary.
Here are a few I’ve discovered over my last 50+ years.
Let Them Play
I can’t tell you how much stress and frustration comes from the elementary school system’s desire to create college-bound robot kids. Homework every night that becomes a battle between parents and kids and the “Common Core” curriculum that punishes all involved.
So what happens is homework drags into dinner then off to a sports team activity then home and to bed. To do it all over again. The kids never getting to play for the fun of playing. Thinking they’re failing because the 5-step math problem that requires solving four different ways and showing your work is so above their cognitive abilities (not age-appropriate).
…homework, an age-old source of angst for many families, has gotten even more complicated. Parents, like myself, are trying to guide children through questions that make little sense to adults who were taught math using other methods.
…a recent study in Psychological Science found that math-anxious parents who help children on homework breed math-anxious children
Which leads me to…
No, Everyone Shouldn’t Go To College
Teaching coding and robotics in 3rd grade. Really? Preschool college prep?
In the drive for better school rankings, teaching the basics and having a mix of work and fun/exercise/social time (aka recess) has transformed into trying to cram too much work into the school day followed by an overflow of homework. Recess that used to be where kids learned how to interact with others and get their exercise – has become so regimented that kids no longer think for themselves. Certain games are prescribed. Every minute is regimented.
So what happens? The average kid gets left behind. They end up more confused than ever. And they hate school.
And if they get by, then they think they have to go to college to get a good job. So they apply to overpriced colleges (prices having tripled over the last 30 years in real dollars), bury themselves in debt, are taught information that is largely useless in the real world (by professors who are more concerned about getting their grants than teaching kids) and end woefully unprepared for the working world. With a debt-millstone that dooms the next 20-30 years of their work life as they try to repay the debt of their Psychology or History degree while holding down a $40k to $50k job. One they could have easily gotten for a cost of $50k to $100k less.
What about trade schools? What about manual labor? What about small businesses and entrepreneurship? Everyone doesn’t need to go to college.
Invest In Yourself
Your future earnings are based on your skills, your reputation, and your relationships – develop all three. And although a good college education can boost all three, what you do to invest in those areas during your working lifetime will make the difference between average pay and exceptional. Readers are leaders – and learning can also make life more interesting and enjoyable – just don’t overpay for it. Make sure the return on your investment is worthwhile.
Always Prepare Yourself For The Next Opportunity
Whether you’re an entrepreneur leading a company or have a 9-5 job, you have to be always building yourself up for the next opportunity.
Companies don’t last forever – they get sold or go out of business. And when that happens, you may be gone, or the new culture may not fit you. Layoffs do happen – even to the best people. The job market changes and industries evolve. Are you prepared?
Preparing yourself includes everything from preparing your resume to building relationships to educating yourself to build your skill and knowledge base.
Your Home Is Not An Investment
I know everyone has heard, “Your home is your best investment.” But what happens when you lose your job and you find yourself getting behind in your mortgage payments – and then lose the house? Unlike mutual fund retirement plan investments you can’t just pull out equity easily and quickly.
What if a good job that is a boost in income and career potential is 100 miles away? Then that home is a ball-and-chain that prevents you from realizing your full potential.
And what if the housing market tanks? Yes, home prices don’t always go up. If you need to sell then, can you take a $50k to $200k hit to your nest egg?
Live simply – more isn’t always better. The Joneses really are more broke you think (they just hide it in visible luxury stuff). When you buy the McMansion in the exclusive nice neighborhood, suddenly you find yourself upgrading both cars. Then you hire the housekeeper, landscaper, and pool boy. Your kids the nanny or tutor. They need designer labels to not be embarrassed at school by their peers. And so the hamster wheel spins. Once you start you find it difficult to get off. And then you pile up debt to keep up.
Dump the insane lifestyle and life gets easier. You find everyday life more enjoyable. You are saving for your future. You will be able to retire instead of work til you’re 70.
Once you crawl into that debt hole, getting out is like escaping quicksand or a riptide. It is a tough habit to break. Instead create a gap between your salary and spending. And aggressively dump that into savings. By doing that you create more freedom to do what you want. It also gives you “Screw you!” money so you’re not trapped in a bad job.
Take an 80/20 assessment of your finances. Rank your spending from top to bottom in size. What are the leaks you need to plug? Can you get a cheaper place (without jeopardizing your security or future opportunities)? Can you get a beater car for $2,000 instead of a $500 a month car payment (for an asset that is worth less every year)? Can you reduce your car insurance costs by shopping it every year? Can you cut cable and get a cheaper phone plan? Can you bring lunch and eat dinner at home instead of going out? When going out can you cut out the overpriced alcohol (often what adds 30-100% to your dining bill)? Can you do cheaper travel or reduce the number of expensive vacations? $30-$50 to camp vs $200 to $500 a night for hotels is a big difference.
You’d be amazed how revamping your priorities and periodically right-sizing your finances and spending habits can rocket you ahead in your savings goals and clear out debt in no time. If you need help, check out Dave Ramsey – the king of living within your means.
Self-Sufficiency Is King
No one will care for you when you’re old – the government is already broke (they just haven’t recognized it yet) and that guaranteed pension might not be worth anything when you need it (how many cities have gone bankrupt – leaving their retirees left holding the bag?)
What are you doing to take care of yourself in retirement? Fool.com article shows…
According to the Social Security Administration, the average retired American couples gets $2,212 per month, or roughly $26,500 per year, in Social Security income. That’s not a lot of money when you consider that the average American household earned $53,657 in 2014 and the average annual expenses for an American retired couple over age 65 were $41,403 in 2013.
The CBO estimates that the Social Security Trust Fund will be depleted in 2029, and that could result in a 29% across-the-board cut in monthly Social Security benefits in 2030.
Premiums for Part D Medicare insurance, which covers drug costs, are often withdrawn directly from Social Security checks and those premiums are growing more quickly than Social Security income. Also, Medicare premium surcharges that come directly out of Social Security income are determined by income limits that aren’t adjusted annually for inflation. As a result, Americans face a one-two punch that could mean Medicare premiums take a much bigger cut of Social Security income in the future than they do today.
According to a December study from Transamerica, the total household retirement savings of American workers age 50 and older is a median $135,000.
What does this all mean? If you’re not aggressively preparing (read “save your ass off”) for your retirement, you think it is hard living paycheck-to-paycheck now, while you DO have discretionary savings, how hard will it be when your healthcare costs are eating you alive?
Life’s too short to do work without meaning. Yes, you need to work at something that will pay you enough to survive and set you up for a secure retirement. But once you get that handled you should be looking for jobs, companies to work for, or entrepreneurial options to get the most financially and satisfaction-wise out of your work life.
Plan your life “on purpose”. Otherwise you’ll find yourself in a place you do not wish to be due to decisions you did not make (but were made for you). You only get one run at this life – so make it count.
So what are you doing with your life? Are you building your future the right way? And living life to the fullest? Are you making a difference?