What Am I Doing This For?

Marketwatch recently came out with an article on how screwed our nation is when it comes to having money in the bank. And I quote:

“Half of this country cannot cope with another recession.

These people don’t have savings to tide them through another blight in the job market. They don’t have backup streams of income. They don’t even know what a recession might mean for their investments, with the result that they have not made any preparations.

Such are the alarming findings of a new survey, reminding us once again that for half of us America is a “rich country” in name only.

Some 49% say they are living paycheck to paycheck, and 61% admit they lack the savings to cover six months of expenses.

However, more alarming is the financial weakness of those nearing retirement. Some 42% of those age 55 to 64 said they lacked six months’ worth of savings, and 47% said they were living paycheck to paycheck.

How these people are going to retire at 70 — let alone 65 — and then live for several decades on their accumulated savings is a mystery.

They won’t, of course. They will be “greeting” you at Walmart with their oxygen tank by their side when they are 85. Heaven, help us.”

Wow. Sounds like we really are screwed. And as millennials we’re victims too, right? We graduated right after the recession, wages have not risen, we are saddled with tens of thousands of dollars of student loan debt, pensions are long gone and the social security well may be fully dried up by the time we are old enough to retire. Might as well throw in the towel now and complain about it to whatever poor soul will listen.

Nope. I reject literally all of this. We all have the most amazing opportunity in front of us.

As I mentioned in my first PFP post, I have a plan. My plan is to save over half of my income consistently so that my finances will never, ever be a source of worry and so outside forces like the economy or job security have a negligible impact on my life.

I am striving for financial security.

Financial security happens when you have enough money saved up where a recession or job loss is not the end of the world, where emergencies are able to be paid for easily, all without impacting your financial future. You are financially secure when you are no longer weighed down by consumer debt payments. What a wonderful place to be. I’m on my way.  

I also reject the notion that everyone needs to work until they are 65 years old before they can retire. This is an outdated way of thinking, yet most go their entire lives believing it’s true. If I continue to save at least half my income (compared to the national average of less than 5%), I will have the option to retire decades before the traditional age, while I am still young enough to fully enjoy it.

Does that mean I will never work another day in my life? No it doesn’t, but I will have that choice. I will be able to choose to continue working full-time, or I could choose to pursue a different life passion. Maybe I’ll take a job that doesn’t pay as much but is more fulfilling to me. Maybe I’ll travel, maybe I’ll volunteer, maybe I’ll write more, spend more time with my family.

The point is, what I choose to do with my time will be completely up to me.  

But for any of this to be possible, the absolute key is to save, save and save. Never to the point of deprivation, but if you change your way of thinking just a little bit, you will have the powerful ability to reduce your expenses by understanding what truly makes you happy. Then you can stop blindly throwing money at what doesn’t.

It is so important to continuously remind ourselves (contrary to the thousands of advertisements we see) that we all live in a world of incredible abundance. I have come to realize that I do not need to have the highest quality TV, the fastest internet, the biggest home, the latest iPhone/iPad/laptop, the luxurious new car (or any car for that matter), the brand new bike, the fanciest watch or the most expensive meals, booze or coffee.

I know that deep down, absolutely none of those things provide deep, lasting fulfillment in my life. I would much rather live a simpler life by appreciating what I already have, save my money and continue growing my net worth at a rapid pace while staying away from consumer debt.

This lifestyle gives me a far greater sense of security, freedom and control. And I inherently know I am setting myself up for a better future, which in turn makes me happier today.

It is also critical to not give into lifestyle inflation. What I mean by that is every time you get a promotion or raise, it is extremely tempting to increase your spending as well. Sure, you can splurge a little bit, but be sure to save most of that money and continue living simply. 

You do not need more expenses. Don’t keep up with the Joneses. The Joneses are most likely in debt.

And if you are able to invest your savings wisely and let your money work for you, your net worth will grow faster than you thought possible through the power of index funds and compound interest.

We all have an incredible opportunity in front of us. We can choose to continue spending our money on the biggest, nicest, most convenient things we don’t really need OR we can begin to understand what truly makes us happy and allocate our money more wisely than the generations before us so that we too don’t end up in the massive savings crisis America currently finds itself in.

We have the ability to gain control and freedom in our lives by saving so much more than we currently are. That’s why I am saving over half my income. And you can too.

It really is that simple. And it’s time to make it happen.

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