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shutterbug asked me in a comment about the road I took to retirement. It's such a good question - one that I'd like to document and would be interested in reading! - that I decided it was an entry instead of a comment reply.When I was young (the first 10 years out of college), I had no concept or interest in my future or retirement. I took my first job because I thought it was fascinating. I took my second job because I wanted to make money. I changed jobs after that for one of those two reasons - usually alternating them. I saved zero $$. If I got a bonus or any kind of lump sum, I bought something fun. A dishwasher, a car, a trip. Whether I made good money or bad, I never had any left when my paycheck arrived.
When I was in my 30's, I worked for IBM. They came out with this Save For Your Own Retirement Plan - a 401K. It was confusing and not required and I just dismissed it. But, my friend, Rick, refused to let me. "You don't have to understand it, but you would be stupid to pass this up. Check this box and sign here and shut up." So I did.
And kept spending everything else as fast as I made it.
Now we have to skip to 1994 - I was 45. I still had no intention of ever not working. Ever. The only 'savings' I had was that 401K which was maybe $30K by then. I was leaving IBM in a month - my job was going to Arizona and I was staying in Seattle. I was going to get $30,000 in severance. And history told me that if I didn't do something about, that $ would be pissed away in a month. One of the benefits IBM offered (and I had never taken advantage of before) was a free consultation with a financial planner. I thought that was a good way to go.
There were two to pick from. I picked the first one - American Express (now Ameriprise) and called for an appointment. My sit down was with Mike - a white haired Republican if I'd ever met one but very kind. He kept asking me retirement questions and I kept assuring him that I had no interest. He did convince me to start saving - I think, initially, it was only $100 a month and he took my $30K and that was that. I did not think any more of it.
Every quarter Mike would call to check in and every year, he'd make me sit down with him. I watched my little nest egg get bigger and bigger. Initially, I did not pay any attention. Sometimes he would explain dollar cost averaging and try to make me care but my eyes just glazed over. But gradually, I kind of got with the program. Whenever I got a bonus or a raise, I'd send it to Mike. My $100 a month turned into $100 a week. My nest egg really took off and I could see it. I'd get statements with that little line going up and up.
I still had no interest in retirement but I gradually came to understand that I my chances of turning into a bag lady were growing slimmer. Saving money kind of turned into a hobby. I still spent plenty but always made sure Mike was getting a bunch, too.
Then, one day, during our annual sit downs, I was bitching about my job and Mike pointed out that savings were now to a point where I could nearly live off of them. That really got me going. I was not ready to not work but the idea that the choice would be mine was very so very liberating. So I upped the anti. By this time I'd totally lost the spend it all fever and was saving a good 30% of my gross salary.
And then I got laid off and I never went back to work. Now I live off the proceeds from the investments that Mike made for me. Mike, by the way, retired a few years ago and Tyler took over and is fabulous.
Tyler invests my money and watches it to make sure it's making as much money as it can while providing me with an income that will last longer than I do.
I am very lucky - lucky to have found Mike, lucky to have finally gotten the savings bug and so lucky to be able to do what I want to do without having to worry about making a living. And smart enough to know how to use all that good luck.
As always, I'm happy to answer any questions. I generally tell myself that I keep this journal for myself and I do but I know people read it and I appreciate comments and always welcome questions.
(no subject)
Date: 2013-07-15 06:17 pm (UTC)(no subject)
Date: 2013-07-15 06:30 pm (UTC)One day I realized that 'buying' more savings was as fun as buying other stuff.
My circumstances, however, were vastly different than yours, of course.
(no subject)
Date: 2013-07-15 06:48 pm (UTC)I just looked back. Last July 15th, I was blogging about my third anniversary in Minneapolis and it was my 2000th entry:)
When did you know Seattle was where you wanted to be? Like me, you've lived a lot of places.
(no subject)
Date: 2013-07-15 06:52 pm (UTC)(no subject)
Date: 2013-07-15 07:35 pm (UTC)(no subject)
Date: 2013-07-16 01:04 am (UTC)I was fortunate that in Career #1 I did everything I could to contribute to my (effective) 401K. I worked for the feds. I earned matched contributions for three years before they were permanently mine (if I had quit before three years was up, they would retract their portion). Then I was on for a while longer and kept contributing. At 30 years old, I had a retirement account worth nearly $70k. And now? I'm going to walk out from this whole grad school experience with maybe $10k left (though $15k was spent for this house, so it wasn't all for naught). My retirement saved me through grad school and I am thankful. But now, when I get out of school, I want to find my way back on target. That's what I've been thinking about a lot.
(no subject)
Date: 2013-07-17 10:07 pm (UTC)(no subject)
Date: 2013-07-17 10:48 pm (UTC)