Finances and Retirement Rant – Rules for Financial Freedom

I just read an article from Yahoo! Finance that is telling me the 6 things I’m doing to delay my retirement. I couldn’t help but laugh, and wonder to myself, “are we that stupid?” What I mean is, does the media think the working class ignorant, to blindly go about our routines under the impression that the financial crisis many are faced with today is a direct result of not following the 6 golden rules of retirement?

Don’t get me wrong, this is sound financial advice. Though I know many (including myself) that have basically lived a relatively frugal lifestyle and invested in their 401k only to watch over half seemingly disappear overnight. Let us not forget Enron and the banking institutions bail out, and the latest to hit the news, Goldman Sachs for fraud.

So lets take look at the 6 rules for financial freedom, shall we?

Following the 6 rules for financial freedom

1. Keeping Up With the Joneses

The premise behind this one is that you are frantically trying to own everything your neighbor has. They buy a new car, so what do you do? Simple, go out and buy something more expensive! Whether or not you can actually afford to make the purchase isn’t important. The importance is in the fact that every day your neighbor will see your car and think to themselves, “damn, I feel like such a dirt bag, my neighbors stuff is so much more expensive than mine. How can I show them THEY are beneath me? I know, I’ll trade my brand new Mercedes for a Maserati! That’ll show ‘em!”

First off, wasn’t this like a 70′s thing? Not only that, I’ve had houses that were less expensive than some, if not most, of the cars banking institution BIG WIGS and politicians drive, oh yea, do they even drive themselves?

2. Bad Habits

Here they add up the yearly costs of things such as smoking, drinking, and gambling. I agree that yea, you could go into financial ruin if you overindulge in such things. BUT, a couple drinks every so often, or the purchase of a lotto ticket now and again is NOT going to put ANYONES retirement at risk, let alone send you off to the poor house. Oh yea, I’m reminded those funds could go into my retirement…

You know what will? Jetting off to Las Vegas in a private jet, having exotic cigars & chocolate flown in, and snorting cocaine off the belly of a high-end escort that was by your side as you dropped 50 thousand on craps! At the publics expense, or rather your 401k.

So before you tell me why I shouldn’t spend a couple bucks for a BEER. Tell me why a politician can spend $2,000 on “food” at a bondage club called Voyeur West Hollywood, and get reimbursed for it?

Your 401k and Financial Freedom

3. Underfunding Your Retirement Plan

According to the Bureau of Labor Statistics, the average American has less than $50,000 in their retirement accounts. This includes young adults and baby boomers near retirement age. Poor financial planning is causing many senior citizens to work during their golden years. These seniors are finding it difficult to retire because they would not be able to enjoy the same quality of life. Social Security alone just won’t cut it.

Ok, I do believe in investing in your retirement. The advice given is to “sock away as much money as possible in your retirement plan.” I would agree with that statement. BUT…they go one to tell us that many senior citizens had to go back to work because of the economic downturn, as if they did not invest enough. I have to call bull shit on this one. I know many that have either had to extend their days working or come out of retirement all together. Not because they did not invest enough, rather because they LOST most of what they invested.

4. Taking on Too Much Debt

I agree with this, too much debt will definitely have a negative impact on your finances, that is a no brainer (even for me). You know how this can be solved? Start paying the working class what they are worth! I am so sick and tired of hearing the CEO of so and so makes in a year what I will be making my entire lifetime. Not only that, that same CEO will be given a golden parachute to step down because he has been fraudulent in his duties.

Debt and Depreciable Assets for Financial Freedom

5. Investing in Depreciable Assets

I agree with this whole hardily, we all know what a depreciable asset is. The car you drive, the boat you may have, the motorcycle, computers, and TV’s. I would rather purchase a house over a new car and boat. Unfortunately in the day and age, we tend to need a lot of those depreciable assets. To make the most of our money though, purchases don’t always have to be for new items.

6. Spending Too Much on Entertainment

OK, I can see how this might be a problem financially, especially if I am going to try to do the things my banker, or portfolio manager does. You shouldn’t be living like a rock star if your not a rock star. But I will rent a DVD (I almost said video), go to the movies once in a blue moon, and even eat out. Mind you, not every night, but I will try to remind myself from time to time that I am not a peasant, though I feel like one compared to the corporate CEO’s of our day.

I will refer back to why a politician can spend $2,000 on “food” at a bondage club called Voyeur West Hollywood, and get reimbursed for it?

The 6 Rules PLUS Advisors that are Ethical & Moral

The Bottom Line

“Avoiding poor financial habits and making solid financial decisions for your future will have you sipping Mai Tais on a Hawaiian island in no time.”

I agree! I also think that if the financial industry was comprised of ethical, moral, and “frugal” professionals, my chances of sipping Mai Tais would be greater, and my 401k would be healthier.

I apologize for all the BUTS…BUT I feel much better now!

Tagged as: finances and retirement

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