It makes sense to me to start at the bottom and work up. I crawled before I ran, disc before harvest, and started out on milk before eating meat. Today, I’ll run the gamut. During recent escapades, I came across a couple of things worth echoing. It isn’t always that one can hear the same decrees from so close a proximity to their soapbox. Eric Rosenberg touts himself a former banker and says that it is never too early to teach kids about money. Allan Roth, a financial planner, says we lack money management experience or expertise.
Rosenberg gives us five lessons. First, know your account balances. Understand how credit cards work is his second. The third lesson is to build an excellent credit score. Take advantage of what your bank offers is lesson number four. Lastly, spend less than you earn. He proposes that most adults haven’t learned these lessons. I lean toward not respecting these lessons. Money is a game. If you don’t play by the rules, you disqualify yourself. You lose!
Roth shares four rules to create a fresh way to think about wealth and funding retirement. Rule one: Wealth is not a dollar amount. He wants us to look at it as a ratio. Upon retirement, we will all have a fixed amount of money to get us to our end of days. The more money one spends per year, the shorter the time frame the cash will last. Wealth should be looked at in terms of time rather than dollars to create a more efficient tool for financial security.
Rule Number two: A penny saved isn’t a penny earned – It’s more. This goes back to what we have discussed in the past. To become wealthier, one must either make more money or spend less of what you have on hand. Your ability to make money is somewhat limited, but a wiser, smarter lifestyle being frugal with your savings will increase the ratio of Rule one.
Rule three deals with Social Security; delay it. The longer one waits to draw, the more money there will be to draw from. He suggests that a person spend down their savings first and then start receiving the SS checks.
The last rule he titles as Piggybank coins. If you haven’t experienced the “four percent rule,” it will become quite familiar to you in your retirement years. It is one of the best-known approaches to managing retirement money. He says that funding sources and spending down are essential. Having the mortgage and debts paid off helps to get one into discretionary spending: needs are being met while wants can be splurge on. What peace of mind when one is not worrying about how the bills will get paid?
Each of us is unique. That is the beauty of life! One should be able to scrounge a meal from what has been presented. I have concluded that wealth is what is left after the money is gone. From my soapbox, I cry “work your plan” at the top of my lungs. If one person listens and acts, it’s worth it.
You can dig deeper into Eric Rosenberg’s comments at https://www.businessinsider.com/former-banker-teaches-his-kids-money-lessons and Allan Roth’s at https://www.aarp.org/retirement/planning-for-retirement/info-2019/4-new-ideas.html. ■
— Scott Arens is a lifelong resident of Arbuckle. To contact Scott email email@example.com