Archive | October, 2012

Don’t be Poor When You Get Old

This is going to be a quick post.

You’re losing $300,000 by not using a retirement account. 

Many of us are given a phenomenal opportunity by our employers to get free money. That’s right…free money.

401(k) Matching
You see, many employers offer a 401(k) match. That means that they will match, dollar for dollar, the amount that you put in to your 401(k). This will be done up to a certain percentage. For example, your employer may match 100% of your contributions for up to 5% of your salary.

This means that if you make $100,000 per year (no, I don’t expect you to be making this much, but 100k is an easy number to do math with)
You contribute 5% (aka $5,000) to your 401(k)
Your employer matches it
You put $5,000 into your account, and your employer puts in $5,000 of their own. It’s free money!!!

My Dad has told me many times that he always regrets not taking advantage of the match that GM would have given him. He didn’t think he had enough money…it’s a pity, because even $50 per month back then (from age 23-28) would be worth $100,000 today. That’s right, I’m not kidding – $100,000!!!

If you are not taking full advantage of your employer’s match, then you are missing out on free money, and need to stop missing out immediately!!!

What if my Employer doesn’t offer a match?
First of all, they may well offer a match, and you just don’t know it. Find an HR representative and ask them about it, or consider asking a co-worker who has been around for a while. I know that even some fast food restaurants offer a match.

Either way, you should be saving for retirement as soon as possible!!!

I’ll spare you the math, but I’ll give you the answers.

If you contribute $50 per month (I bet you can afford it), then you will make a ton of money!!!

Example
Let’s say you are going to contribute $50 per month for 10 years only (that’s a total of $6,000 in 10 years)
If you start at age 20, you’ll have $150k when you turn 65.
If you start at age 25, you’ll have $100k when you turn 65
If you start at age 30, you’ll have $67k when you turn 65

Do you see how just a few years makes a huge difference? You’re putting in the same amount of money overall, but you are making as much as 100% more!!!

If you just don’t wait, and begin putting something in to your retirement account, you can make an extra $90k by sitting on your ass.

Start now…for every minute (well…month) you miss out, you are missing out on real cash!

What do you do?
Step 1: Ask your HR employer or co-workers if your job offers a 401(k) match (even some fast food restaurants offer this…seriously, just ask)
Step 2: Contribute enough to get your employer’s match
Step 3: If you don’t get your employer match, at least begin putting in $50 per month ($100 is better, but $50 is fine…if all you can afford is $25, then go with that!)

If you don’t have access to a 401(k), then open up a Roth IRA. There is plenty of documentation on the internet about this…I use Fidelity for mine. That is not going to be covered in this post.

Resources:

Like I said, I am trying to keep this short, so that’s all!

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Why Bother Being Born?

We all tend to focus so much on the present – and that is important.
But it is also important to look to the end, to examine your entire life, including the part that has not happened yet, and think about what you want to have done.

Some people will say they’d like to have raised successful, well-adjusted children
Some will want to have made Millions
Some will want to have helped to elminate poverty
Some will simply want to have survived (not a recommended end of life goal)

Living does not Mean Surviving
Surviving: Not being dead
Living: Experiencing the magic that life has to offer

In the end, will you look back on a fulfilled life, or will you mourn the life you never had.

I’ve had the thought that we can “finish” our lives at some point for a while now. It always nagged in the back of my mind, but it really came to the forefront of my mind when I watched a documentary by Spike Jonze. It was a portrait of Maurice Sendak (known most famously for authoring Where the Wild Things Are)

Sendak’s most famous work
The Documentary
The documentary, Tell them Anything You Want: A Portrait of Maurice Sendak is a wonderful film, full of insight and wonder. I highly recommend the DVD. It used to be available on Hulu, but it appears it was pulled down. I’ll let you know if it goes back up. 
While the entire film is fantastic, there is one particular segment which I have gone back to many times to draw inspiration. The title is “Sendak on Death (And Life)” on YouTube. I have to say that this is a man who has experienced so much pain in his life (he died on May 8, 2012 – if you were unaware), and yet he has found happiness. His work was his true happiness.

This segment asks the noted author: Why Bother Being Born? And what follows is a truly introspective journey which we can all benefit from. It is a mere 5 minutes long, so sit back, ignore the world for a bit, and watch.

Motivation You can Draw from Maurice Sendak
I like to watch this video every time I find myself seeking some inspiration. It is a very moving video that drives me to pursue what makes me happy. I have watched it (and listened to it) many many times, and I’m sure I will do so again and again. 
Disclaimer #1: I do find that you need to be in the right mood for the video. You should be in an introspective mood.
Disclaimer #2: It will be better if you first watch the full Documentary…but it is great even without knowing the full context

If you’d like to watch the full documentary first, then you can find it at Amazon, or you can view it illegally on the Internet, but I can’t make a recommendation on a site (I truly don’t have one for you, or I’d share)

So consider what your life should be.
Ask Yourself: Why Bother Being Born?
When you are this man’s age, will you be proud of a life well spent. Will you be done with your life? Or will you mourn never having lived a life in the first place?
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Fake it ’til you Make it…NOT!

I take issue with the statement “fake it ’til you make it”, because it sounds deceptive. It can be a good concept when you are looking at your personality, and your mood, but it is rarely used properly. Usually, it means you are going to pretend that you are something you are not, and try to deceive others.

This is effective when you look at body language and your mindset. If you force yourself to think happy thoughts (fake it), eventually you will be happier (make it). If you force yourself to take a confident stance (fake it), then you will eventually develop more confidence (make it).

I prefer the term in this format:
Fake it and you’ll make it

This more accurately describes what we should do with this age old wisdom, and making this one mental shift can have a major effect on your day-to-day life.

For a more specific discussion, see the video below. I’m excited, because this is my first recorded blog post!!!

Resources:
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