Do Inadequately Planned Retirements & Unemployment Feel The Same?

30 04 2010

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An “A-ha” Moment

I’ve never been retired, but I’ve been unemployed for nearly 9 months and it got me to thinking. There may be millions of retired people trying to live off of roughly the same amount I receive in unemployment benefits! It felt like a genuine epiphany, a fresh peek into how many others might be living at this very moment… and I have to admit it was very sobering.

Loudoun County Living

I’m blessed with a spouse and therefore an extra income, so my personal situation varies slightly from the point I’m trying to make. But if I were single, it’s obvious to me how tough it would be to survive financially. Especially when I consider the cost of living in my region. I live in the DC area, and more specifically in Loudoun County. Loudoun is one of the fastest growing counties in the entire country, placing in the top 5 annually for the last 7 years or so.

Even so, my jobless benefits only give about 45% of what I was making in my last job. That’s right. Less. Than. Half.

401-QUAKES & Pension Penal Systems

In the wake of this recession, where millions lost their entire 401k savings and other retirement investments, can you imagine how many people retired only to discover they couldn’t make a living off of what was in their accounts?

Most of the newly retired folks that I speak with usually point out the initial┬ásticker shock they had when they got that very first pension check. It’s usually anywhere from a 30% to 45% DECREASE from the salary they were drawing on a monthly basis… and these are the ones that have the proper nest egg to live comfortably. (Or so they thought)

Can you imagine then, what it would be like to go into retirement with insufficient funds? “Insufficient Funds” should only be printed on an ATM receipt when you’re living check to check, it should NOT be a retirement strategy! But then again, many who are ill-prepared for retirement can’t blame it on the economy at all. Poor money management and spending habits in your adult working lifetime will very easily translate into the rest of your retired life.

So I guess at the end of the day, the 2 can seem similar but for me I suppose the silver lining is two-fold:

1 I won’t be unemployed for the rest of my life. The last job I worked is not the┬áLAST job I’ll ever work! Once I get back to earning a decent wage, we can resume with eliminating our debt.

2 Once we’re debt-free our focus will be to truly setup a NICE nest egg in a Roth IRA, and some Growth-Stock Mutual Funds.

But for now, if you don’t mind it’s time for me to retire because I’ve been up all night writing this post. *rimshot*

Live Invincibly,

@W

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Fascinations with Procrastination

31 07 2009


Photo courtesy of Mark & the Zebra

Before this recession and the downturn in the economy. It seemed like the hardest thing in the world to get someone to put away money in an emergency fund. But as the unemployment numbers have swelled, so too has the sense of urgency to stash the cash… y’know just in case.

But at the same time, some… no MANY people still refuse to make any serious changes to their approach towards their financial behaviors.

I sometimes find it interesting to study the conditions under which we are forced to shift gears and move into an uncomfortable situation (saving) to avoid the effects of another uncomfortable situation (compulsive spending/shopping, living check-to-check, living the good live, etc.) — even when we know it was the right thing to do all along, and also know that it will put us in a far better position moving forward.

Okay, I just used alot of words to say very little, let me bottom-line it for you lol. We don’t like to change until we HAVE to.

Now, please dont feel like I’m picking on you, trust me when I say this applies to me most of all.

When my car is running strong I dont take nearly as much care to maintain it as when it’s giving me trouble. And the same goes with my finances. It took a MAJOR situation before my wife and I decided that we NEEDED to get out of debt completely. Before that event, we were already settling into the “minimum payment mode” on all our accounts.

But once we were faced with that situation, it put us in a place where we really had no choice but to get all the way out of debt and stop digging ourselves deeper or dragging it out any further.
I can’t wait for the day that I’ll be able to share exactly what that situation was. Hopefully my wife will give me the greenlight someday. But I know for now that it’s still too fresh and close to home even though the actual situation was resolved long ago.

Er… but back to the point I was trying to make… ah what was it?

We don’t like to change until we HAVE to!

Romans 13:8 puts it this way (NIV):

“Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellow man has fulfilled the law.”

And verse 11 continues:

“And do this, understanding the present time. The hour has come for you to wake up from your slumber, because our salvation is nearer now than when we first believed.”

See, there really is no time to waste because most of us truly know what ‘time’ it is. For this year my church leadership selected the phrase “Now is the Time” as the theme for this year’s ministerial focus. And although this year is now more than half-way over, I still want to offer those words as something for you to consider…

NOW IS THE TIME!

@W

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I Think We Need A Change…

29 07 2009


Photo courtesy of Forgotten memory

As you know if you’ve been around us for even 5 minutes, we’ve been at this for almost 2 full years now! September 13th – which also happens to be my birthday – will make it official.

Within those 2 years we’ve picked up a lot of personal insight and we’ve also tweaked a number of techniques to find a more ‘custom’ fit than most of the major programs provide. We took all of the info and then applied our personal filter to it based on our beleif system, our financial situation at the time, and our decisions based on just how aggressive we wanted to be at the outset. Once we got the hang of it we essentially just let it run it’s course without much change. Sure there was a streamlining process that we had to go thru but it mostly happened as a result of our weekly budget meetings and in very small increments.

But now I’m coming to a place where I feel we need a change in strategy. And I’d prefer for it to be a MAJOR change! At times I question if we are somehow too ‘comfortable’ with the pace we’ve settled into lately. Quite honestly there are times where I dont feel very “Gazelle Intense” at all about what we’re doing.

And then when you couple with that the fact that we are quickly becoming role models through the ever-extending reach of this blog, Facebook and Twitter it becomes a challenge sometimes to manage a balance between what we’re doing as a household vs. what we want to empower you to do as a person/family.

The bottom line is that I feel the need to possibly change the way we are approaching our debt. I’m looking for a way to make it ‘fresh’ again to us in spite of the fact that we’ve accomplished so much and are now at our virtual halfway point in the journey.

I’d love to hear ideas from any of you who have felt this same way and done something about it! Please leave me a comment below or hit me up on Twitter with your suggestions!

See ya next time,

@W

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@Risk Remix: A Look Back

1 06 2009

Photo courtesy of ZaksterNT

*This is the second time I’ve turned to this image for a post, the first was “Full Circle: How our TMM Began…“. I encourage you to read it as well. This picture represents perfectly how our financial situation felt before (Barren) and how it feels now in comparison (Overflowing)

Today I found myself looking back over a few posts from nearly a year ago, just to see how far we’ve come in that amount of time. I really must say that I’m pretty amazed by what I saw. The post in question is “1/3 way home” And it was about how excited we were to reach a minor milestone in our journey.

At the time we had just finished paying off the 10th bill out of the 30 that we started with, so we had just passed the 1/3 mark on our debt snowball list.

Fastforward to today and we are WELL into paying off the 32nd bill out of the 41 we now have on that same list. That means we are 3/4 of the way done with the ‘list’!

At the same time we have officially passed the Half-way mark on our debt total as well. We’ve paid off $52,730.06 and have $$51,506 left to pay before we are DEBT FREE!

WHAT A DIFFERENCE A YEAR MAKES!! So I guess in our case you could say that “Hindsight is 50/50!” We’re halfway there!!! I can’t wait to see where we are this time next year! We should be heading into the Home Strecth at that point!

It’s never too late to start, if you have not already! We’re here for you, so let’s GO!

@W

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Simple Secrets: Paying on it vs. Paying it OFF

28 05 2009


Photo courtesy of Tea & Jam

Ok folks. In my last post we went over the basics of the 7 Baby Steps that have helped us pay off over $53,000 in debt in the last 20 months. But today, I’m going to let you in on a little secret: There should actually be 8 baby steps!

Step Zero: Stop using currently established and available forms of credit, and also stop accepting NEW forms of credit.

This step contains the key to your Total Money Makeover, and it’s such a radical shift from ‘the norm’ that it causes many to fail even before they start. Some folks just cant get their head around living off of CASH.

When you really get the point of this program, you will soon realize that you really don’t need credit at all. Not for credit reports, or FICO scores, or for your cash back rewards. You don’t need it.

Minor tangent: Speaking of cash back rewards… how much CASH are you really getting BACK when the creditor is charging you interest for the use of your credit line? Think about it!

Now, in my last post I promised to tell you why we REALLY chose to stick with this system, and here is the reason: Because at first we felt like we were doing something WRONG. And when I say ‘wrong’ I mean we felt like we were being disloyal to the credit industry in some way. It’s hard to articulate, but Visa and MasterCard have become so prevalent in our society and in our spending habits, that it felt truly odd to simply make the decision not to use our charge cards! How sick is that?

The entire credit system is propped upon the fact that they NEED you to NEED them. They constantly send the message that if you aren’t using credit in some way, you simply will not be able to ‘compete’ with or keep up with the average consumer. It’s a very Pied Piper mentality!

Once we realized why it felt so wrong, it lit a fire in us! And it opened our eyes to the many tactics and tricks that are pressed upon the average consumer.

THIS IS A WAR PEOPLE! And if you haven’t noticed, take a look at what this nation has been through in the last 16 months as proof. The housing market collapse, the banking and financial institution implosions, the economy woes, the employment issues. They are all mutations of one virus: CREDIT…

Credit tells you it’s ok to spend more than you actually possess. Credit tells you it’s ok to borrow against your future, to acquire something today. Credit can erode your character and your sense of delayed gratification, and it can also ease you into a place of irresponsibility and ‘living for the moment’ emotional purchasing.

Because of this, you are required to make a change in your approach toward money. This is where the title of my post comes in. People who are comfortable with debt, have no problem “paying on” something far longer then they ever intended to, because they get lulled to sleep by the convenience factor of a payment plan.

Meanwhile, those who have had enough of this game of debt become addicted to “paying off” things as quickly as possible so that they can free up their income and truly live a life that’s not dictated by a three digit score, and the limits on their cards.

Thanks for tuning in, I hope you’re enjoying this expose’ series.

Next up: “The $1,000 Scramble”

You are worthy of the journey!

@W

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You Want Me To Do WHAT?!?!

20 04 2009


Photo courtesy of ppc007

In my last post I left you with this thought:

“Live like no one else, so that one day you can LIVE like no one else.”

Please try and get that into your spirit whether you choose to get out of debt with us or not! It’s going to apply to whatever obstacle you need to face in order to reach that goal you fantasize about.

In our case though, that statements speaks to our financial situation in a very powerful way. My wife and I were blessed enough to start getting out of debt in 2007 which was way before the economy went south. The reason I call it a blessing is because it would have been 20 times tougher for us to go through some of the things we’ve faced, if we were just starting at during a time like this. But in no way am I saying it can’t be done. I know of many people who started their jouney to debt freedom when things were at their worst, which to me is all the more commendable and impressive.

But let me get back to my point. “Living like no one else” means letting go of all the credit cards, charge cards, department store cards, gas cards, the loans ect. “Living like no one else” means living only off of the money you earn from your salary. And let me tell ya people, it takes serious guts to do this! This might be the equivalent of a life-long meat eater going Vegan “cold turkey” as they say. Or I guess more fittingly “cold to-furkey” lol.

But for me a far better and meaningful example is the commitment, determination and surrender a person undergoes when they give their life to Jesus Christ. This process can be nearly as liberating and transforming for your finances. “Living like no one else” means doing what others are afraid to do because it might cost them something trivial on the front end!

Let me make one thing clear real quick. Just because I’m not spending all of my money on watches and flat-screens NOW, doesnt mean it’s ALWAYS going to be this way for me. In fact I have just over a year left to go before I can get back to truly ENJOYING my money again, and yes even BLOWING some money on material things. But that will be just fine because at that point I’ll be able to AFFORD IT!! I made a decision to SACRIFICE for just 2-3 years of my life so that I wont have to sacrifice for the REST OF MY LIFE!

Unfortunately, too many people have been sold the idea that they simply cannont exist without credit. It’s become unrealistic to many because all of their ‘dreams’ reside far outside of means!

“C’mon, who really pays CASH for a car nowadays? That’s just not realistic! I’ll never have a nice ride, if I go that route!”

“Can you even get a house without having a MORTGAGE, is that even possible?”

“And just forget about paying for your children’s college education unless you refinance that mortgage! Raising enough cash to pay for it outright?!? Is that even possible?”

“Is that even possible?!” This might be the second most popular question I’m asked when it comes to our debt journey. And at least for us, I’d have to say “Yes, it’s very possible.”

“Living like no one else” requires a paradigm shift, or rather a change in your thinking. But take heart, you dont have to undergo that shift overnight! This is where the “Baby Steps” come in…

In the next episode: “These “Baby Steps” ain’t for BABIES!”

Stay Tuned…

@W

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Suze Orman: Your Loss is Her Gain…

9 03 2009


Photo courtesy of Glennia

“I’m proud that I make money, that I work hard, that I’ve created what I’ve created. But I can tell you this: I haven’t hurt one person getting here.” – Suze Orman

Oh really Suze?

I usually don’t do this. I usually don’t ‘go after’ someone in the public eye. But Suze Orman has pressed my final button, so I just have to get this off my chest.

Orman is considered to be the most recognizable personal-finance expert in the world. And quite possibly the most polarizing as well.

Now anyone who follows this blog knows that I’m a fan of Dave Ramsey’s methods for eliminating debt and managing your finances. Not because I have a ‘thing’ for Dave, but first and foremost because he uses the Bible as a foundation for the principles he teaches. There is proven truth to what he says… he doesn’t sugar-coat it, he doesn’t water it down.

Suze on the other hand seems to “play to the crowd” a bit too much for my liking. She wont tell you what you NEED to hear all the time, because it may alienate you from being endeared to her.

I just read an article about her on Time.com called “The Queen of Crisis“. I highly recommend checking it out. But I digress…

My biggest problem with Suze is that she’s not afraid of credit. She wants credit to be your friend in turning your woes into wealth.

Last week I caught the 2am replay of Oprah. (Please don’t ask…) Suze Orman was the guest of honor and she was answering every one’s “tough” questions about this economy and their money. Questions like: “We’re getting married this summer and we want to spend no more than $50,000. After our expenses each month we have about $500 leftover. How can we afford to make this happen?”

Suze told them that they couldn’t afford it, but she then went on to tell them HOW they could afford it!

Oh, and how about the couple that wanted to remodel their kitchen and bathroom by taking out a $76,000 Home Equity Line of Credit (HELOC)? Suze said “Go for it!”

Whaaaa? Excuse me? Have you seen property values lately?

To me this is reckless! While we’re facing the worst economic situation in the last 80 years, The world’s foremost financial expert is on a show with possibly the widest viewership into the ‘average American home’ and she refuses to be a voice of reason against the mentality of trying to afford what you cannot afford?! Really? At a time like this?!

In the quote at the start of this post, she says she hasn’t hurt one person getting to where she is… but I beg to differ. With advise like the variety she gave on Oprah, I shudder to think how many people she hurt in that hour alone. How many people did she just empower to continue to run their finances into the ground?

Ok, and one last question…

Why does she charge $80,000 per speaking engagement? Is her advice really that valuable? As I said before when it comes to the economy, our loss is apparently her gain.

Till next time,

@W

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