About being a minimalist , saving money and travel the world for years to come...
Monday, 2 July 2018
$17,000 Pipe Dream
$17,000 Pipe Dream
What’s going on ya’ll?
I’m sitting at my son’s baseball practice and working on our core family values. As I’m doing this, since I’m a quick start and I get big ideas all the time, for some reason I started thinking about a client meeting I had 8-9 years ago.
He was the son of a good client. He was about my age at the time, maybe 3 years older. All I knew about him was that he lived out of state, was married with kids, and made good money.
My clients, his parents, were excited to refer him to me. He and his wife came in and I got to learn more about their situation. Both he and his wife worked for the same company and each of them were making around $250k a year. So combined they were making about a half a million dollars a year. 💰💰
That was pretty impressive considering he was in his mid thirties. I was excited about this. He was a high achiever with big ambitious goals. 👨💻
He wanted to retire at the age of 50. 🌴 Not that he wanted to call it quits, he just wanted enough money and investments saved up to be able to quit.
I love meeting younger people that are driven, motivated, and their success comes from their own efforts. No silver spoons, no family connections, just hard honest work. Nothing makes me more excited than that.
However, as I got to learn more about them, I discovered that although they were making a LOT of money, they had no idea how much they were saving. I started the process with how much they had in investments and savings.
They brought in tons of paperwork, savings accounts, life insurance policies, etc. I went through all of this paperwork, crunched the numbers, and discovered he had $17,000 in total assets. He was in his mid to late 30’s, he wanted to retire in 12-15 years, and ALL he had $17,000. 😮
At first, I was thinking….what am I missing. I had to ask him. Do you have another account that I’m not seeing? The answer was no. There were no other accounts, there was no hidden money. There was lots of debt. But no savings. Hardly any assets.
In his thinking, he made lots of money so he should have plenty for retirement right? WRONG. They weren’t saving anything. They were spending everything. 💸 They traveled a lot, they had a big house, nice cars, boats, etc.
I told him, it’s great that you have the big ambitions and you make really good money. But you are not saving enough money to retire at 50. You are not even saving enough to retire at 70!
I shared my numbers with him and told him he basically needed to start saving about $6,000 a MONTH if he wanted to retire at 50.
I think the important lesson to be learned here is that a lot of people have no concept of what it takes to retire. They have the misconception that they are saving enough.
If you are not saving at least 20% or more of your income, you are not even close to what you need for retirement.
Don’t be this guy! Just because you make a lot of money, that doesn’t mean JACK. You have to put money away.
You can enjoy your money and spend it as you make it, but when you are ready to retire, you won’t have anything. 💸
So here is my question to you right now, if you are comfortable sharing, what percentage of your income per month are you saving? If you don’t know the percentage, what’s the dollar amount? $50 ---- $100?