In sports, playing defense involves preventing the other team from scoring. In life, you’re on one team and Murphy’s Law* is on the other. Shit happens. We’ve all experienced unexpected setbacks that have had some degree of financial impact.
Retirement is simply a time when you need to cover your living expenses with your assets instead of employment. You’re using your money and not your time to support your lifestyle. The conventional wisdom about retirement is that you need to hit a speciﬁc number in your investment portfolio in order to achieve it. In reality, there are a number of different ways to make retirement a reality- only one of them being a bucket of money equal to 80% of your pre-retirement income.
“In this world nothing can be said to be certain except death and taxes.” -Benjamin Franklin
Investing properly is a crucial part of maximizing your savings and cash ﬂow.
Conventional wisdom around money tends to be a bunch of blanket guidelines about how much to save and spend without necessarily taking personal goals and lifestyle into consideration. To say that there are specific reasonable and unreasonable amounts to spend and save for certain things just doesn’t make sense to me because there are so many different factors that should come into play that vary greatly from person to person.
“While many think it’s admirable to be debt free, it’s not necessarily smart. It’s usually an emotional decision, not a financial one. You can never solely count on is rules-of-thumb and conventional wisdom- crunching the numbers is a crucial step.” – Nicole Peterkin
Money Basics Series
Although there are certain basic financial rules of thumb that many people can agree make sense at face value (like “a house is always good investment”, “you should try to save as much money as you can for retirement”, and “you should always spend less than you make”), making financial decisions solely based on these rules of thumb is probably not going to help you maximize your money and can actually cost you big time long term if this advice isn’t in line with your personal goals and values.