The old ‘financial planning’ model is based on the premise that you dislike your work and one day you will ‘retire’, put your feet up, and live your life by drawing a pension from the nest-egg that you have spent forty odd years building up.
I can tell you one thing for certain – it is far more important to find a way of making a living that you really enjoy than it is to grit your teeth and keep doing something you dislike just so you can ‘live large’ when you turn 60. That, to me, is the height of insanity. In fact, I’d prefer insanity!
If you hate your job, and you somehow make it to retirement age (55-65), and you have (by some miracle) accumulated enough funds to live well for the next twenty or so years – you will most likely celebrate, sit down, put your feet up and relax for a month or so. Then you will start to get itchy feet, you will get bored – and then you will start to wonder if the ‘plan’ was really all that good as it had looked on that shiny whiteboard after all. Then you start to ponder on whether the overweight, overworked and decidedly stressed-looking financial advisor really knew what he was talking about. You decide that it’s not really that bad – your not dead yet – and you might take that holiday you’ve been planning for 40 years. So round the world you go – take lots of pics – come back and celebrate with your retired friends. Another month or two goes by – and once again, you get itchy feet but this time, there’s not enough in the budget to take another holiday, which is exactly what you feel you need. You need to wait another 18 months – and cut down on a few things – and then you’ll be bale to afford a two-week trip to Bali. And time goes by – slowly ….
Here’s an alternative: Do what you love doing – and find a creative way to monetize that passion. If you are successful in doing this – you will no longer need that million dollars in your super fund at retirement – now you will only need half a million or so; because you have found a way to keep an income stream flowing in to top up the shortfall that the financial advisor had used to scare the crap out of you at that first meeting way back when.
We all need money to live the way we want and do the things we want – no doubt about that. But don’t give up the ‘now’ so that you can ‘live the life’ when you turn sixty. Live it all the way – be passionate about what you do – invest in super, be smart, read good books, talk to successful people – but LIVE NOW! Love the whole journey – and never stop. If you are thirty five years old, it’s time to start thinking seriously about putting away ten percent of everything you earn. But it’s also time to start thinking of creative and fun ways to make a living from the things you love in life. That way there will be no retirement date – if all goes well, you will still be making money when you die. Your kids will appreciate it – but more importantly, you will have lived life to the fullest. Forget the squirrel philosophy – don’t make your entire spring about preparing for survival in winter. Spring is for living life to the fullest. The winter may be coming but if you’ve been smart about the choices you have made you may be able to get out and find nuts in the snow after all.