Investment Guy

I work with people every day, guiding them to retirement.  I am always impressed by my clients who are the ‘millionaire next door’; those who have diligently saved and amassed their fortune quietly- and you would never expect them to be millionaires.  They have successfully saved for retirement by living within their means, and put away money consistently over their entire career. 

Yesterday’s generation had pensions.  Today, some of the baby boomers have pensions; some boomers have 401(k)’s, a few even have both.  Add social security into the equation and retirees can generally live comfortably. 

Generation-Y is in some serious trouble, however.  I’m 31 years old (Gen-X border), and it seems like everyone in my generation, at least most people that I know, live AT their means.  When [if] “we” get a raise, we don’t save more…we simply spend more.  Some people contribute to their 401k or IRA, but few maximize their contribution. 

Even if you are disciplined enough to contribute to your 401k or other retirement plan you need to save more.  Everyone aspires to live a good life and many dream of retiring early.  

Newsflash:  if you don’t live within your means, you will never be able to retire.  EVER.  People who spend everything they make and want to retire at 60 are delusional.  Assume you live to age 90.  How on earth are you going to afford to buy food for the 30 years in retirement if you don’t save anything along the way?  For most people, it takes a lifetime of saving to retire comfortably. 

In 1945 there were 41.9 workers paying into social security for each retiree, and by 2020 it is estimated that there will be 2.2 worker contributions per retiree.  For Gen-Y, we will be lucky if social security can pay our monthly Netflix bill!  And we are all living much, much longer than people did in 1945.  Pensions are non-existent for us, and without a disciplined savings approach I’m afraid our generation will never retire. 

This chart chart shows that the sooner you start saving, the better your chances of accumulating real wealth.  You are in charge of your destiny -start saving today.