Conversations With Your Older Self

Matthew Gates http://notetoservices.com 8m 2,006 #conversations

The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.

One Hundred A Month

I am not a broker, banker, or a professional financial adviser. I am a person who thinks about the future, understands money and retirement, has made some good investments and some bad investments, and is simply offering advice.

By reading this, you do not hold me responsible for any financial losses you may incur by following this advice. I offer this advice with good intentions on educating and delivering knowledge to you about your financial situation in regards to retirement.

You may or may not agree with me on some of this information, but I wrote this article to inspire, encourage, and influence others to make their own financial decisions in terms of saving money for their future.

What if a time machine had been invented and you could travel back in time just once at age 65 to give your younger self advice. What type of advice would you give yourself? Would your older self be pleasant to speak with? Would your younger self understand what your older self was talking about? Would you trust what your older self was saying? Would you follow the advice? I want to think that your older self would be pleased, but the conversation would go something like, “Look at you, every mistake I’ve ever made just waiting to happen.” A line I stole from Men In Black 3, in which Boris the Animal, returns back to the 1960s, and tries to give himself some advice, despite the younger Boris arguing with himself.

Most people rarely want to think about getting older, let alone the thought of death. Both of these are facts and both of these facts scare the shit out of us. We would rather pretend and imagine that we aren’t going to get older and we aren’t going to die. Unfortunately, your parents probably thought you would be young for a long time, but the years flew by, and you got older, and you are likely experiencing the same thing.

As you get older, past high school, past college, and into a regular routine job, you find that the days are made up of a fast 24 hours and the years keep slipping away. Every year is a year closer to death. Yes, I’m so sorry. I’m being blunt about it and brutally honest with you. But if I’m not, who else is going to be? Yes, you look still look pretty. You still look handsome. Probably a few extra pounds, but you’re still you.

So why would you not have a conversation with your older self? Maybe you would tell yourself that eating that cake once was okay, but the dozen times after that in the same year, probably was not okay. What about the most important thing of all in regards to advice to your younger self? The one thing that will be a constant in your life until the day you die: money.

You need money to live. You need money to eat. You need money to do things. You need money. Fact of life. Sure, the government might give you a small handout in the form of social security, as they supposedly promise. Truth of the matter is, there are far more baby boomers consuming that social security and less younger people working to replenish it for themselves.

Hopefully it all works out and you will be golden when you come to rely on that small monthly paycheck. It would certainly be nice to have a monthly income, like a basic universal income, but that is for another confession. Sticking to the facts, on social security, you will likely be living on less than your means, as most of your paycheck will go to wherever you decide to retire. If you have a house, you might be okay.

If you rent, you might be okay. If you have children, maybe they’ll let you live with them. But what if none of this is okay? What if you don’t have a house and your rent is pretty high and you have no children or children that cannot take you into their home? Truth be told, as a life lesson that you keep learning over and over again, not to sound selfish, but you need to look out for number one.

Number one is yourself. Yes, you have your children and your spouse. However, if you don’t look after number one, than you won’t have your spouse or your children. So lets just face reality and say that you really do need to take your future self into consideration. Every moment that you are not saving for retirement is another moment you are stealing money from your future self.

Your future self cannot help your younger self, except for the fact that upon looking to the future and accepting your old self, your older self has given you the advice you need, but your younger self is in a better position of helping your older future self.

Depending on what age you are now, you should have begun investing by age 25. If you are younger than 25, than you should really start investing as soon as possible. If I could go back and change things, I would have began my investing at age 18, but I started at 25 years old. You need to learn about the stock market, 401k, IRAs, ETFs, Mutual Funds, Certificate of Deposits, Trusts, Bonds, etc.

If you are over the age of 25 and have no idea about any of these things, you need to spend an entire week watching YouTube videos, reading articles, and anything you can because you need to catch yourself up with reality. If you want to retire comfortably, at the age of 62, 65, or 67, than you need to save money right now.

62, 65, and 67, and Congress, by the time you retire, will probably raise it to 70 years old, is considered the age of retirement. 70 years old. Imagine that. You at 70 years old. You could be a healthy 70 year old or you could be in far worse condition. The choice, of course, is up to you, for the most part.

We’re not talking about something hereditary or in your DNA or fate, but rather the probability that if you live into your 30s, you will likely be living into your 60s and 70s. I pray that you do live a long time just as I seek to live a full life and a life well lived. How much money you want to retire with depends solely on you. You could retire with barely a few thousand dollars in your savings or you could retire a millionaire from your 401k, stock market, investments, bonds, and trust funds.

You might think that putting money away is hard, but letting money grow without touching it is a discipline that most people do not have. Unfortunately, money takes time to grow. Fortunately, money will grow over time. Money will always make money, unless the stock market crashes and everyone stops buying, but for the most part, in our economy and consumer society, everyone will keep buying and companies will keep producing.

Laws of supply and demand. The later you start, the less you have. The sooner you start, the more you have. The more you put away, the more you’ll have. The less you put away, the less you’ll have. It sounds hard, doesn’t it? But the sad reality is, the majority of people are not ready to retire and are far off from having money for retirement.

You see some people everyday walking into Walmart or a fast food restaurant. Some of these people are there by choice, having lost a spouse and looking for something to do or be around people. However, there is another percentage of those older people working who have no choice, because the social security check they have or don’t have isn’t enough to live on every month, and so they must subsidize by working part-time and sometimes even full-time.

Do you want to be one of those people? If not, than you need to start saving. Whether you want to save $20 a month, $50 a month, or $100 a month, anything towards your retirement would be good for you. Your older self would likely confirm that statement.

Imagine being immortal and having put money away in some mutual fund or stock market and being frozen for a thousand years. A thousand years later, that money would have probably grown to an amazing amount. Although inflation and other things might come into play, it would still likely be a good amount to live on in the future.

Realistically, by the time you retire, the eligible age for full benefits is going to be anywhere from 67 – 70 years of age. You have about 49 years from working until you are eligible retire. To really get a head start and ensure there is a good amount going towards your savings, while not robbing you of the present, it is a safe bet to say that putting away $100 a month for your life is a good investment into your older self.

Lets do some calculations, starting at the age of 18 and putting away exactly $100 a month until retirement at 67, approximately 49 years.

By the time you retire, you will have saved about the one year of the average salary which is about $58,800. This might not sound like a lot, but depending on where you invested it and other types of investments you made beyond the one hundred, you will likely have acquired more. Combine this with social security and your older self will likely be very pleased. By retirement, you will want to have saved at least triple the salary you made. So if you made $60,000 a year, you will want to aim for between $180,000 – $300,000.

Combined with social security, this will provide you with about a half-million dollars upon retirement.

Teach yourself. Teach your children. Get investing as soon as possible. You can invest as little as $10 or $20 a month but recommendations are for at least $100 a month. You can do this even if you have bills but if you are finding yourself living paycheck to paycheck each month, you might want to reconsider other areas of spending that could do without. The choice is completely yours. $100 a month is not a lot if you think about it. It is about the equivalent to putting $3.33 a day away. If you need to put $3.33 into a bank account or a mutual fund, in order to understand it better, than by all means, do so.

There are several types of accounts that you can invest in, but highly recommended is one that you can put in, but you cannot take out without a severe penalty. It might sound like a horrible thing. I mean, what institutions dares penalize you for touching your own money? The fact that these penalties exist mean that people have abused their money in the past and have had a hard time saving, possibly even taking it all out, and using it all up before they even came close to retirement.

It is almost a send it and forget it kind of deal. Act as if that is money you don’t have. It would be even better if you could have your money automatically withdrawn from your paychecks so you will not even know it is gone. Many companies that have 401k offerings do this type of thing, where your money is out of your paycheck before you even get the paycheck.

Have a genuine conversation with your older self. What will you both talk about? What do you need to tell each other? What can you do to help each other out? Your younger self has an opportunity to talk to your older self. Your older self is a lot wiser than your younger self might think. After all, your older self has been through a ton of shit and is probably begging you to get your shit together. Start now. Start immediately. Start with a hundred bucks.

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