Monday, January 6, 2014
Looking At The Future Blankly
Today I read an article about a former Vice President of Marketing for a dental hygiene company who is now well into his '70's...and working two jobs to make ends meet. He hands out samples at a membership store for $10.00 an hour at one job, and flips burgers and mops floors in a restaurant at another.
The article told of how, even though he pulled down six figures over a long career, paid off a mortgage and put his kids through college, he still didn't manage to save enough for retirement.
Actually, what the article states is that, "...like most Americans he didn't save enough for retirement." (Italics mine).
The article, like most articles critical of the current retirement system, was of the Chicken Little the-sky-is-falling school of alarmist reporting that seems to be all the rage for the editors of financial newsletters and magazines these days.
Nowhere in the article is there any mention of other factors that may have also contributed to the former VP of Marketing's plight - no mention of divorce (the single most financially devastating event in the majority of broke American's lives), no mention of huge medical bills (#2), and no mention of the never mentioned #3 - spending habits.
It puzzles me that spending habits are never mentioned in articles of this ilk, as I think they would be a no-brainer to factor in. Of the top three reasons for financial insolvency, this is the one that most people can actually have complete control over, or at least reasonable control.
It's easy to get blindsided by divorce - happens thousands of times a day in this country. And a sudden deterioration in health that results in savings-draining medical bills are the fodder of Socialists world-wide. But spending? Spending doesn't sneak up on you, spending doesn't suddenly rear it's ugly head and strip you of your assets.
Spending is something that it is always in one's control - it's just a matter of self-discipline.
The article doesn't mention if the former VP of Marketing
bought too much house (the difference between the utility bills and taxes for a 6500 sq ft place versus a 3000 sq ft place over a 30 year period could easily run into the hundreds of thousands), or if he bought a new luxury car every 3 years, or if he went on month-long vacations to expensive resorts.
Those are classic examples of reckless spending that could have, you know, factored in.
Now, I know that I am as guilty of reckless spending as any YOLO-shouting teenager alive, and it would be the penultimate hypocrisy for me to claim I watch every penny I spend even now, but the thing is, I have learned (via the good ol' hard way) the importance of not only saving, but of spending wisely.
In my youth I was prone to spending whatever money I had on whatever I wanted, regardless of the possibility that what I was purchasing was of extremely limited value, and without regard for the potential of the item to be useless and outdated within a few years, or even a few months of the date of purchasing it.
Case in point: In the four years during the early '80's I spent in the USAF, I purchased a few hundred record albums, and after the introduction of CD's, I purchased a few hundred of those as well.
One night not long after I first read the book The Millionaire Next Door, I sat down and attempted to calculate how much I had spent on recorded music over that period. It was in excess of $12,000.00
Yes, I cried.
The article that featured the former VP of Marketing's current plight went on to slam the aging Baby Boomer generation for their alleged poor savings skills, using various statistics to show how ill-prepared they were for retirement.
Which was about as useful as a dog owner yelling at a poorly-trained dog for peeing on the corner of the couch.
People who have never been instructed in the fine art (or is it a science? It might qualify as a science) of spending wisely certainly cannot be expected to know the importance of saving for a rainy day - or retirement.
To top it off, the article ends rather glibly, simply quoting the former VP of Marketing as he works at one of his two jobs with a bright and cheery attitude. No words of wisdom, just more lamenting of the poor savings habits. That's a bit of a disservice to anyone who read that article looking for the cause of that man's plight, because I guarantee there were more factors at play than piss-poor savings skills.