Crackerjack Greenback Prudent Advice for a Prosperous Future

February 19, 2009

Rethinking Retirement

Filed under: Contentment,Earning,Goals,Retirement Planning,Values — Paul Williams @ Crackerjack Greenback @ 11:36 am

       Mike at The Oblivious Investor has a thought-provoking article today titled Don’t Retire., which was inspired by Stephen Pollan and Mark Levine’s book Die Broke: A Radical Four-Part Financial Plan. Mike discusses why retirement as we imagine it today is probably an unreachable goal for most Baby Boomers and subsequent generations. Given the fact that many workers no longer receive pensions and don’t seem to be very good at saving on their own, I’d have to agree.

The History of Retirement

       The idea of retiring when you’re older is relatively new. It only seems to have become popular in the last century. There are several possible explanations for this, but the most likely ones are higher incomes (we enjoy a standard of living about eight times higher than Americans a century ago) and the creation of Social Security and pension programs (though the future of Social Security is unclear, and pensions are largely a thing of the past). If you’d like to read more about the history of retirement, I suggest these articles:

Economic History of Retirement in the United States (a more academic article)
The History of Retirement, From Early Man to A.A.R.P. (not quite as dry as the first)

       The truth is, retirement was never really an option for our earlier ancestors. They didn’t have very long lives or the economic systems we have today. We also find no discussion of retirement in the Bible as we think of it today. There is one reference to the priests (Levites) retiring at age 50 from temple service, but they were to stay on to help the younger men (probably in giving advice and guidance). The only other semblance of retirement we see in the Bible is old men sitting at the city gate. The city gate was a place of honor, and those who sat there offered advice and counsel to those in the city. Again, the older people didn’t really retire but found other ways to serve their communities. Instead of working, they lived with their children and received support from them. But that’s rare today (unless you’re Amish).

How Should Christians View Retirement Today?

       Given the nature of the labor force today and the interaction of families, we do need to be saving for a time when we won’t be able to produce as much income as we can when we’re younger. Children are moving farther away from their parents for jobs or other reasons than they did in the past (or in the Bible). Several generations of a family living in the same house or very close to each other is no longer the norm. And the complication of health problems and other issues when you’re older can definitely impact your ability to earn income.

       However, the American view of retirement is far from God’s ideal for His followers. How does spending every day on the golf course, or sipping sweet tea on the back porch every day, or traveling the world for pleasure glorify God? The work of the kingdom of God is never ending. By focusing our entire lives on a retirement where we sit around, do whatever we want, and relax, we miss the picture of what God could be calling us to do when we no longer have to work as much to earn all of our money. On the other hand, a Christian retirement focused on contentment and serving God can allow for some leisure (just as during your working years) without neglecting the valuable work we can do to further God’s kingdom and show His love to the world.

       22 Then, turning to his disciples, Jesus said, “That is why I tell you not to worry about everyday life-whether you have enough food to eat or enough clothes to wear. 23 For life is more than food, and your body more than clothing. 24 Look at the ravens. They don’t plant or harvest or store food in barns, for God feeds them. And you are far more valuable to him than any birds! 25 Can all your worries add a single moment to your life? 26 And if worry can’t accomplish a little thing like that, what’s the use of worrying over bigger things?

       27 “Look at the lilies and how they grow. They don’t work or make their clothing, yet Solomon in all his glory was not dressed as beautifully as they are. 28 And if God cares so wonderfully for flowers that are here today and thrown into the fire tomorrow, he will certainly care for you. Why do you have so little faith?

       29 “And don’t be concerned about what to eat and what to drink. Don’t worry about such things. 30 These things dominate the thoughts of unbelievers all over the world, but your Father already knows your needs. 31 Seek the Kingdom of God above all else, and he will give you everything you need.

Luke 12:22-31 (NLT)

       We are not to seek a life that’s merely full of the pleasures of this world. God calls us to seek His kingdom first. When we put our focus on God and trust in Him, we no longer have to worry about our retirement accounts, government policies, economic disasters, or any other worries. When we have the glorious gift of Jesus Christ, we remain wealthy despite what happens to us in this life. We have riches that cannot fail, that cannot disappear, and that will never leave us—even after death.

A Different Retirement

       I’m not saying you should stop saving and investing for the future. There will most likely come a time when you will not be able to earn all the money necessary to cover your needs. It is prudent and wise to save for such a time, and the Bible commends and encourages such wisdom. But you should rethink your hopes of buying that second home, taking luxury cruises three times a year, or endless rounds of golf during retirement.

       A Christian can most definitely follow God’s teaching and will if they save up for retirement and reduce or eliminate their workload. But a Christian retirement should be focused on meeting your needs (not extravagant needs, but your daily bread—just enough) and then using your abundance of time to do God’s work. Minister to the needy, volunteer more, visit the sick and those in prison, comfort those in mourning, reach out to those on the margins of society, pray and study God’s Word—these are all wonderful activities to fill a Christian retirement. But seeking a permanent vacation, a time when you do little that is useful or glorifies God, is only a product of greed, selfishness, and the World—it is a tool used by Satan to distract you from furthering God’s kingdom. Flee from it, and seek God’s counsel for your older years. Ask Him to guide you and show you His ways so that you can continue to glorify Him.

The Results

       This new view of retirement has profound implications for your life—now and when you’re older.

  • You no longer need to be obsessed with saving and investing all of your money. You’re free to be extremely generous—following God’s teaching on giving. You won’t have to save as much, but you should still save prudently.
  • You will avoid the depression that often comes at retirement. Many workers realize they actually enjoyed the interaction with their coworkers or the public and feel lost after they retire.
  • You’re free to do work that you enjoy even though it may not pay well. You don’t have to run after the highest paying job just so you can secure the retirement you’re told to dream about.
  • You don’t need to be a workaholic. You can focus on family and serving God during your working years—glorifying God much more than if you spent 80+ hours a week working. This also leaves you with more time to develop your relationship with God.

       Seeking a retirement where you can glorify God even more than you did while you were working brings you much closer to God than a retirement where you spend every day out on the boat. I challenge you to reconsider your ideas about retirement. Rethink retirement, and pray for God to show you what His will is for the later years of your life. Let God transform and renew your mind—clearing out the messages the World and Satan have planted in there and putting His teaching and will in your heart. Then plan and save for a retirement that glorifies God.

P.S. Yesterday marked Crackerjack Greenback’s 100th post! I’ve had 7,044 visitors and 193 comments since November 2008. Thank you for reading and visiting! If you’ve enjoyed what you’ve read so far, please tell your family and friends about Crackerjack Greenback!

December 29, 2008

Stop Driving Through Personal Finance Fog

Filed under: Goals,The Basics — Paul Williams @ Crackerjack Greenback @ 4:00 am

Through the thick fog. by redjar on Flickr       I had to drive through some thick fog Saturday night on my way to visit some friends. I realized I hate driving in fog (especially at night). Why is it so bad? Simply because you can’t see what’s ahead of you. It’s difficult to prepare for obstacles in the road, and you can’t see the potholes until you’ve already hit them.

       Trying to manage your finances without a good plan is a lot like driving in thick fog. If you don’t have a budget and track your spending, it can be very easy to spend too much money and forget about irregular expenses. If you don’t set specific goals for yourself, you have no destination. You’ll end up wherever the road happens to take you. While that can make for an exciting road trip, it’s not really the kind of thrill you want to have in your personal finances. Without a budget and clear goals, you can’t prepare very well for the obstacles ahead and you’ll often hit some big potholes that can send your finances reeling.

       Want to improve your finances next year? Focus on the basics first. Set some clear and specific goals, and figure out a realistic budget you can stick to. Then track your spending using whatever method works best for you. (The next logical step would be to build up an emergency fund. It’ll make smooth driving of those potholes I mentioned earlier.)

       These are not exceptionally difficult steps to take, but they do require time and commitment. Dedicate yourself to setting your financial goals, making a budget, and sticking to it. And stop driving through the fog!

December 4, 2008

The Way to Wealth – Nuggets of Wisdom from Benjamin Franklin: Little Strokes

Filed under: Goals,The Basics,The Way to Wealth,Values — Paul Williams @ Crackerjack Greenback @ 4:00 am

Black & White Stones & Water by Johanna Garlike on Flickr       Last week, we talked about Time Management in Benjamin Franklin’s The Way to Wealth. Even with top notch time management skills, we can often run into huge tasks that seem impossible or become so busy that it seems like we’ll never get anything done. Franklin’s advice is to remember that we can accomplish great things when we tackle them little by little. Here is today’s quote:

       ‘Tis true there is much to be done, and perhaps you are weak handed, but stick to it steadily, and you will see great effects, for constant dropping wears away stones, and by diligence and patience the mouse ate in two the cable; and little strokes fell great oaks, as Poor Richard says in his almanac, the year I cannot just now remember.

The Way to Wealth – Benjamin Franklin

       In nearly everything we take on, there is much to be done but often little time to do it in. Franklin’s advice is to “stick to it steadily” or keep at it until you accomplish your goal. Nature provides us many great examples of this truth. Some of the most amazing rock formations on Earth were formed by the power of steady work from water. Even a tiny drop can bore a hole through the thickest rock if given enough time. We, too, can reach astounding goals by simply working at them little by little over enough time.

Johnson's camp by flickr-rickr at Flickr       I really like the quote “little strokes fell great oaks”. It’s easy to remember and it’s a powerful example. Have you ever chopped down a tree with an axe before? Each stroke of the axe only takes out a tiny bit of the tree, but after enough strokes the tree falls over. Taking small steps to achieve your dreams may seem trivial at the time, but every little step gets you that much closer to the goal. Even the tiniest step forward is better than standing still or moving backwards.

       Do you have some huge task waiting for you right now? Perhaps it’s a large project at work, or starting your own business, or getting your finances in shape. Even if it seems like you’re a long way off from finishing these things, start taking small steps to achieve them now. A little progress here and a little progress there—you’ll soon be done!

October 27, 2008

Setting and Prioritizing Goals

Filed under: Goals,The Basics — Paul Williams @ Crackerjack Greenback @ 4:00 am

       If you’ve read The Importance of Values and completed the exercise to identify and prioritize your values, you are now ready to set and prioritize your goals. Your goals should line up with your values, else you will have a very difficult time staying motivated to reach the goals you set.

What Are Goals, and Why Are They Important?

Soccer Goal by Road Warrior        A goal is a specific result you are working towards achieving. Goals help you focus on a final destination for all the hard work you are doing right now. We constantly live in the present – focused on the here and now. Unless we find a way to visualize the future, we are easily distracted and sidetracked from achieving our goals. Clear, specific goals help us keep that picture of the future in our mind so we know why we are making the right choices today. As J.D. Roth says at Get Rich Slowly, the road to wealth is paved with goals.

What Makes a Good Goal?

       Good goals with a high chance of success have certain attributes in common. When you write or verbalize a goal, you should make sure it meets the following two criteria:

    Specific – A goal should specifically state the desired result (What?), a time frame (When?), cost (How Much?), and the personal value it aligns with (Why?).

    Realistic – A goal should represent an end result that you are willing and able to work towards. This does not mean that you should not set high goals, but you must know if you can truly accomplish your goal. Setting unrealistic or impossible goals could mean you are preparing yourself for failure.

       If you’re not sure a goal is realistic, go ahead and do your best to achieve it. Just because a goal seems out of reach does not mean you cannot accomplish it. If you find out your goal is much too ambitious, you can always scale it down in the future.

List Your Goals

Write a List by Swiv        Although you certainly aren’t required to have written goals, it helps a lot to write them down on paper or electronically. I personally use a single Google Docs Spreadsheet to track my budget, net worth, and goal progress on separate pages.

       To start off, just list all the financial goals you can think of. This may include some more personal goals that will affect your finances, but you should be sure your goal can meet the two criteria above. Don’t worry too much about having the “right” goals at this point – just list them all.

Eliminate Conflicting Goals

       You may have listed some goals that are conflicting. For example, if you listed “Buy a new car for $30,000 next year” and “Eliminate $30,000 of credit card debt in the next twelve months” you could have conflicting goals! You have to decide which goals are the most important, focus on those, and eliminate the rest.

Prioritize Your Goals

       Next, you’ll need to figure out which goals are the most important in terms of their value to you and how soon they need to be accomplished. For example, establishing an emergency fund of at least $1,000 before you focus on paying off debts is important because it will keep you from taking on additional debt if a need arises suddenly (car repairs, unexpected bill, etc.). You may be able to prioritize your list without any tools, but if you need some help I recommend CNN Money’s “The Prioritizer” calculator. It’s a fun and quick way to prioritize any list of items. Just remember to keep asking yourself which goals are most important and need to be accomplished first as your prioritize.

Commit to Your Goals

       Once you’ve narrowed down and prioritized your goals you must commit to achieving those goals. The best way for most people to do this is to put the goal in writing. You will also want to figure out a way to remind yourself about the goal every day and find ways to motivate yourself to achieve the goal. Share your goal with someone close to you who will be supportive and provide you with accountability. Focus on the positive effects of achieving your goal when the going gets tough (and it will get tough). Most importantly, do whatever works for you to keep your motivation up.

Don’t Give Up!

Hang in There by Latente        No matter how hard you may be working at achieving your goals, it’s likely you’ll run into some roadblocks along the way. Don’t give up! Unless a change in your situation necessitates an adjustment to your goals, stick to the goals you set. Think about why the goal is important to you and what it will mean to you once you’ve accomplished it. Saving money and paying off debt are going to be hard because they require you to change long-held habits and demand some sacrifices. However, you have to keep in mind the freedom and peace you will have once you accomplish these goals! Our brains are not wired to think long-term, so this won’t be easy. Do your best to remind yourself every single day why you set your goals and why you want to achieve them. With time and discipline, you will accomplish your goals!

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