The 3 Options for Retirement – Episode 542

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, welcome to the podcast. We’re going to start out using the R word. I know, Kim, retirement. You hate hearing that. This comes from Naval Ravikant. I know for all of you that are not watching the video, Kim put her fingers in her ear because I said that. Why is that, Kim? Because retirement is such a sad, societal construct and it’s so not good for people, socially, emotionally, physically, financially, spiritually. Are there some other L-Y words? Yes. We’ll sum it up with saying it’s bad. There we go. So he said something that was interesting. I’m not pushing back, but I’m taking his approach on it. He says, get everyone to retirement.

[00:55] And the quote is, stop sacrificing today for some imaginary tomorrow. I thought, that’s pretty good. That’s some wisdom in there. And then he goes on to say that there’s three things that you can do when it comes to retirement. So we’re going to get Kim’s approval, the thumbs up, thumbs down, or whatever we want to call that. Sound good? Wonderful. So his first, as he said, you can save the money that you need to be ready for retirement. And saving that means that, you know, again, lump sum or maybe it could be passive income. Do you agree with that or not? As an approach. So I’m curious, do you think he’s using save as a verb as in like setting money aside or is he using save as a noun, like the storing of money?

[01:56] You know, he’s actually using it in both. And to give context, Naval Ravi Khan is the founder of Angel’s List, self-made billionaire. He’s done very well in the investing world. He’s known as the man of wisdom in Silicon Valley, we’ll call it. A lot of people go to him and maybe it’ll be helpful to cover the other people. And he’s going to tell us a few stories that he’s going to tell us, let’s say, he’s going to tell us three and then it’ll give you context if that’s an, if it’s a verb. Yeah. Okay. So first is to save. You can save your way to retirement. Second is that you can lower your burn rate. And the example he used his look, like if you. You know, want to retire and just become a monk.

[02:42] And then you don’t have to spend anything. what you love and then you’re not actually retiring because you’re still continuing on the path. So those are his three options. I’d love to get Kim’s take on that. Wonderful. All right now I’ve got something I can sink my teeth into. So let’s start with the third one which is do what you love and then there is no desire to retire from work. And I hear even people that like the word retirement, I hear this type of conversation quite a bit. What are you retiring from? Okay, well, that’s interesting. But what’s more important is what are you going to retire to? In other words, what are you going to do with your time instead? And this is such an important question,

[03:32] because this is why I believe that the societal construct of retirement, which did not used to exist. I mean, this really only been around as a societal thing since I want to say about the 1930s or so. So if you do what you love, then you have no desire to retire because you love what you do. And yet, when you tell do what you love to a kid that’s 25 or something, that can be a bit of a challenge because a lot of them don’t feel like there’s space for making money with that that they love. But more importantly, they don’t know what they love. That’s I think the biggest challenge. So we could do a whole podcast on that. But just to stay within this realm is I know without a shadow of a doubt, the people that

[04:27] are alive and learning and having fun and growing and contributing to our society are working. And work is not a four letter word. And they are doing what they love. And they are providing that service called work in the presence of people that will happily pay for that service slash product to be provided. So what’s the quote, do what you love in the service of others that love what you do. That’s what they’re doing. And so of course, they love their lives. And that’s, I think the goal that we should all have. So for number three, I’m all in. And let’s make a note to do another podcast on how to figure out what you love. Ooh, I love that. Because I was going to follow up that is, I’m not going to use the word epidemic, even though I have heard people say

[05:25] it’s an epidemic with a lot of this growing generation. So hold on, this will be a full episode. And that’s an episode that maybe as a parent, you listen to, to be ready to have the conversation with your kids. Or it’s the episode you listen with your kids. It’s one of those two. So we’ll, we’ll, we’ll see as that comes out. So we have two other points, which is to save and to burn. Yeah. So let’s talk about lowering your burn rate. So most people would say that that requires a look at their budget. And budgeting is a very forward attempt, looking forward at your expenses, to try to mathematically figure out how you can, in his words, lower your burn rate, lower the amount of money that you need every month. And I’m not

[06:19] saying that that exercise will be completely worthless, but in most cases, it’s just really not effective. It might be mathematically accurate, but I find that it really, in most cases has nothing to do with one’s life. And a much better approach is to look backward and to measure your progress and to save first. So now I’m speaking of save as a verb to put away money first and then spend the rest. This is literally how I’ve lived my entire life. And all of my clients that are successful financially have as well. And so, yes, I do agree that we need to live below our means, but I also agree that we need to work on increasing our means. And I believe that we should save, save as a verb, and I believe that we should store

[07:13] savings as a noun. So all of those aspects of a financial life are very, very important. And they go right along with our oft quoted saying, which is cash flow issues don’t go away, they just get bigger zeros on them. It doesn’t matter how big your zeros are, the act of saving money, verb, the act of storing money as savings, all super, super important, which then now leads us to point number one. And so point number one, I think you said it was save for retirement, save to retirement, save for retirement. Yeah. So if we again, separate out save as a verb, I don’t really think you can save for retirement or save to be able to retire because the typical definition of retirement is to stop earning an income

[08:15] at, you know, fill in the blank of the age 70 or whatever it’s going to be. And then to live off said savings and investing monies for the rest of your life. And when people are going to live another 40 years, they’re going to have to live off savings as long as they’ve worked. I mean, that that math just is never ever going to work. And anybody that’s ever truly, truly put a pencil to the savings aspect of supposedly build up, up, up, up, and then spend down, down, down, down. Yeah, absolutely. Some people can pull it off, but most cannot. And so it’s so critical that we understand that we’re going to live until we’re 110, 120. So critical that we understand that longevity and then, of course,

[09:00] inflation, our biggest enemies in this period, quote, called retirement. And then furthermore, that a life of luxury, a life of traveling all the time, a life of sitting around watching Netflix is not a way to spend more than a week or two, you know, maybe even a week or two every quarter. But then what are you going to do with the other 11 or 10 weeks in that quarter, God put us on this earth to serve. Now, some people can serve and not earn money, and that’s fine. Yet, most people when they serve, they get paid something. And so even if that serving is volunteer, that’s awesome. But usually somebody in the family is earning an income. And that is so so important. And again, if we’re put on earth to serve, we need to

[09:50] serve until the day we die or, you know, maybe until we’re not physically or mentally capable. But again, people pre 1930s, that’s what they did. They worked until they died, and then they died, and then they didn’t work anymore. And so that’s really what we should be striving for. And oh, my gosh, you’re starting to see people in their 80s, and their 90s, and their hundreds, lawyers that are going to work still two or three days a week, dancers that are still dancing yard people that are still doing yard work. I mean, the list is endless of the examples of people that are thriving in their later years, because they are still working. Exactly, exactly. You know, what’s what’s changed, and we’re seeing across the the world is, again, you’ve

[10:42] mentioned longevity. And so we’re even seeing it like a strange example I read about is taxi associations. There was a taxi association that recently bumped the age limit up five years. Because one, they don’t have a lot of younger drivers. And two, the drivers they have, they’re great drivers, they’re older. And they were being forced to retire. Now they continue to do what they enjoy. And who knows, maybe in four years, that’ll get bumped another five. I don’t know what that looks like. But you mentioned the savings piece and how it typically does not work. And that reminds me of I’ve seen it work. And it’s sad when it does work. Yes. And so well said. Yes. It’s very sad. I remember when I right when I got out

[11:43] of high school, I worked as an appliance delivery. My dad had a like a retail store. And so I worked at my dad’s store. And I had to do the appliance and delivery of other items. And I remember this was this was one of those like concrete memories that I’ve held on to for decades. We had to deliver a TV. It was back when TVs were, you know, these giant behemoths, you know, like a TV weighed 200 pounds, you know, what it was like. Yeah. And again, it’s always sad when you bring a TV into someone’s house. And that’s the biggest, nicest thing they have. And that’s where their money went. That was the case. And it was government subsidized housing, where I brought a TV. And it was this older man,

[12:37] let’s say probably mid 70s. And it was so sad that his retirement looked like what time is Jeopardy playing and is a will of fortune before after and how does that work? Exactly. It was really sad. And I, you know, I realized that some people can’t save for it. That’s not a good life. No, it is unbelievable. The risk that people take when setting themselves up for that, the risk to their health, the risk to their mindset, the risk to their relationships, the risk to their happiness. Because that’s a very take environment, you’re taking in what the TV wants you to see what the news wants you to hear. You’ve completely lost control at that stage. And that’s really a recipe for a very short life,

[13:45] and not a very happy one and a very, very sad existence. And we see it all over this country. And we don’t see it as much in other countries, some Europe, probably for sure. But some of the other countries where people are working and working and working and finding work they love and continuing to serve. And those people are happy. And they may have a physically demanding or a mentally demanding job. And that’s okay. Again, us human beings were put on earth to serve. That is not sitting in front of a TV. Absolutely. And the physically demanding work is great for our minds as well. It’s just maybe the older I get, not something that I want to have to do of killing myself every day. But having a property like you do, it sure feels good for a

[14:48] season. It really does. Kim, wonderful episode. So for all of you listeners that are looking at retirement, just using the language of retirement, there’s a better way to approach this. And we’ve done episodes. You mentioned in a previous episode, there’s an organization that you like to refer people to. Can you mention that again, that’s for people that are thinking of call it the service in the retirement ages? Yes. So I’m not exactly sure what when you’re talking about, but I do like the organization growing bolder BOLDER, because it shares lots of different ideas of what people can do. There’s another one called seniors helping seniors. So I think just seniors helping seniors.com whereby senior

[15:38] citizens are lending the good that they can provide to other senior citizens that need that good. Some of those positions are paid, some are not. Was there another particular one you had in mind? There was a senior one that volunteers and helps, you know, we’ve got, you know, retired financial professionals, retired accountants that go, okay, I can’t remember what that group was called at the core. SCORE is maybe what you’re referring to SCORE. And I don’t remember what that stands for, but it’s senior citizens, something, something, something. So yes, excellent additional idea. And it’s wonderful in today’s world, because virtual jobs are everywhere available in every department, right? In every realm of life, there is a

[16:38] company somewhere somehow that has figured out how to enable virtual work. So the person that desires just two or three days a week, just earning, you know, maybe 25 to $50,000 a year, just to have a little bit to give, and then enable them to earn a little bit of money just to offset inflation and stay active and engaged. It’s a perfect environment for people in that realm of life that just want to keep going as they should and serve and get paid to do it. Love it. All right. Thanks for sharing those resources and listeners. Thank you for being a part of this episode with us. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit ProsperityThinkers.com.