As everyone this age already knows, life is not exactly a joyride in the absence of cash.
You look down the road and there’s nothing to see but a tunnel and a light because there is nothing else.
As everyone by now knows, the most important thing in the world is health followed closely by money.
The rest can wait.
According to Vanguard’s How America Saves 2014, which provides statistics about the more than 3 million people who have a defined contribution retirement plan managed by Vanguard, the median 401(k) balance for those over 55 was less than $75,000 in 2013:
Please explain to me how the hell you’re going to hang out in Cabo or Aspen without a large career income or passive income from investments?
You’re not.
You’re going to stay home with your cats and hope your death is swift and painless because the rest isn’t worth the journey.
TWO EXCEPTIONS
1] Yogis
2] Tenured University Professors
In the first case, the senior yogi may live in a tree, but women in his classes find his acetic existence and peaceful vibe an extraordinarily attractive alternative to the wolves of Wall Street.
So he can expect to get laid by beautiful women who don’t care what he doesn’t have until they do, at which time they go back to the wolves for another round.
Tenured university professors make a couple hundred grand a year, never lose their jobs, get Summers off, and hold the destinies of their students in their hands.
It kinda’ sells itself.
The only problem is that most women at ivy league schools envision large homes in nice neighborhoods, expensive cars, private schools for their kids, and at least 3 vacations a year.
Needless to say, his salary won’t cut that, nor will his eventual savings which are destined for social security support.
So we’re back to square one.
With this as a backdrop, how exactly do Baby Boomers acquire enough capital to retire comfortably without robbing the Federal Reserve or winning a slip and fall against Kroger?
First, they have to have something of value to sell that offers windfall potential.
What about their homes?
Yea, I’m laughing because homeowners between age 50 and 65 are most likely to carry a mortgage.
The percentage rose from 60% in 1992 to more than 70% by 2010.
What about saving more money?
For guys 50 and older looking at potentially 20 more years of putting whatever away, if you can invest an extra $5,000 per year for the next 15 years, you would have an extra $146,000 at age 65:
If you can leave it alone until 70, you could have approximately $220,000 in added net worth based on historical stock market averages.
But what kind of life are we looking at here?
Most people in better neighborhoods spend $200,000 in 6 months just maintaining their lifestyles.
You’ll be watching every single solitary bill, praying your roof doesn’t leak, and clipping coupons while annoying the people in line behind you at Whole Foods.
You’re better off dead.
The sad truth of the matter is that your priorities were ass-backwards back in your 20’s when you thought you were immortal because you could nail dates at the drop of a hat even if you couldn’t afford to take them to Jack-In-The-Box.
It didn’t take long to notice that no matter what you looked like all the wealthy older men were taking your girlfriends to the Bahamas for the weekend.
Then it dawned on you that youth and beauty only work for highly-precisioned gold-diggers of exceptional beauty; actors, models and entertainers with the wings of angels; and singers like Robert Plant.
And since you couldn’t find a niche for yourself in any of the above, you were screwed.
After all, what’s the point in getting old if you can’t afford to enjoy it?
People are always talking about people pursuing things they love.
But understand that love is always secondary to common sense.
If piano tuning does not pave the way for millions in an investment account by age 50, do something you hate.
You’ll love yourself in the end.
POSTSCRIPT
For you older men of average means who have daughters of exceptional beauty, please explain to them how to leverage what they do have in exchange for everything you don’t so you can piggy-back on their success.
You’re welcome.
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A FEW TRUTHS ABOUT MONEY
1] Lots of money won’t make you happy, but not enough of it will make you miserable.
2] One million dollar homes in large cities are often tear downs situated in up and coming neighborhoods.
3] 250k/ year is considered upper middle class.
4] When politicians talk about raising taxes on “millionaires and billionaires” they’re including everyone who falls in #3.
5] The average 0ne bedroom suite at a luxury hotel property is $1000/night and everything else is a la carte.
6] Dining out in a big city usually costs $200 on up with wine and tip.
7] The average luxury automobile starts in the $80,000 range.
8] Whole Foods bills usually run 20k-30k/year with wine.
9] Luxury handbags usually run $2000, and women’s shoes, $500-1000 which you’ll need to keep in mind if you happen to live with a woman.
10] First Class airfare from Houston to Los Angeles is in the $1200 to $1400 range. Double it if you’re taking your girlfriend.