Bill Gates, Jeff Bezos and I all have something in common. When we finally “shuffle off this mortal coil” we will leave behind exactly the same amount of money-all of it. (Or better still, what’s left of it). Furthermore, we also share something else in common, being that none of us know how much time we have left. (Although as I prefer to say, we have all the time there is).
A recent article published in the Financial Post, highlighted the question of “oversaving and underspending”. It questioned why so many people “overestimate” how much they will need for retirement, especially when you consider that only 20% of Canadians over 65 will live for 30 years. While I don’t necessarily agree with that statistic, it will indeed be true for many.
At this life stage however, one of the most interesting things I find about many people is their attitude towards money. Certainly, there are those who have not handled their finances well, or through circumstance have reached a point where the scarcity of money can be a serious concern, requiring understandably, those in that position to be very prudent in all financial dealings.
This article, however, whilst recognizing those concerns, also notes the vast numbers who reach this stage and whose focus has been entirely on wealth accumulation through their entire working life, much of it with retirement in mind, oftentimes to the exclusion of looking after that which is infinitely more valuable i.e. health. To paraphrase a quote from the Dalai Lama “man sacrifices his health in order to make money and then sacrifices his money to recuperate his health”.
(Whilst there are very many articles published on “how much money do you need to retire?” offering a lot of practical financial advice, there are far fewer advice columns on “how much health do you need to retire?”)
Nevertheless and from many personal observations, what is emerging as an interesting study, is that there are so many at this stage who have by chance or design and following a lifetime of saving and investments, ended up with a “nest egg” far and beyond what they need at this stage and yet do nothing with it?
So what is the true worth of your assets? Does accumulated money have any value unless it’s used for something?
On one of my Evolve videos, I talk about the couple who bought an old second hand car in order to leave more money to their children. As it happens, this couple had built a very successful profitable business, which they passed on to their adult children who made it even more profitable. When I asked them why they didn’t buy a more modern car with all the safety features their reply was that “they didn’t want to be selfish, but would prefer to leave the money they didn’t spend on a better car, to their children”.
At this point I walked away scratching my head and realized that they had bought into one of the traditional notions of retirement i.e. be remembered as someone who always provided for their adult family, whether they need it or not.
Like so many of us who brought up children, sacrificed for them, provided for them etc. it is time to recognize that we too have a life in Act 3. Obviously if you have family in difficult financial circumstances, you would naturally help where you can. However, that is generally not the case.
From many years’ experience in real estate, I have seen countless situations where in any busy housing market, the parents have stepped in to provide the young couple with a major amount of money for a home down payment. This has come to be known as tapping into the “bank of mom & dad”.
That however, can be a massive mistake. Parents who do so are overlooking the fact that unless they have some legal degree of ownership of the property purchased, they are on very shaky ground. The divorce rate is 50%+ and if that young couple decide to go separate ways, good luck on getting back your generous loan (which under Canadian law and to satisfy the bank, has to be seen as a “non-returnable gift”).
As has often happened, providing such funding and its subsequent loss, means that the parents end up losing significantly a quality of life that they worked hard to earn.
Spending money on you is not selfish, it’s smart and you’ve absolutely earned the right to do it. That accumulated wealth can be a gateway into many projects that may play a great part in your personal evolution. As I always say, what I write is not about aging and retirement, it’s about growth and personal evolution in this exciting stage of life.
Maybe you could start that small business from home? Maybe study photography and turn part of your house in to a studio? Maybe update your house with technology? Maybe you could invest modestly in the equipment to restore furniture? If you love to golf, maybe study architecture and design to create the perfect golf course? There are so many ways that you could use some of your own well earned money for modest business investment that have meaning for you. So why not put you first?
Or, have that fabulous vacation, upgrade your home, buy that better car, or countless ways that you could greatly increase the quality of your life with some well-earned self-indulgence. Why not?
Many deny themselves the quality of life to which they are entitled and settle for a humdrum existence of going nowhere and doing nothing for all their remaining years, until eventually, it’s over. Some postpone travel until the cost of travel insurance becomes prohibitive and it’s too late.
Despite the initial statistic on longevity at the beginning of this article, even if you live to be 100, that’s still only 1200 months. If you happen to be 65+ that’s possibly only another 400+ months that you have left.
Best I can conclude is that there is an underlying fear of running out of money. However, I would be far more concerned about running out of life first. So if you have it, enjoy it, spend it.
Besides, many will return to some level of work either out of boredom, or a need to feel productive, thereby adding another wage to their accumulated assets.
Some like to contribute generously to any number of charities, however as the saying goes, “charity begins at home”. There is zero wrong with putting yourself first. All your life you have no doubt been generous to many charities and now there is a following generation who can continue that.
Enjoy your money, you’ve earned it. Remember, you will never see a Brinks truck following a hearse.
Viva la Evolucion!