Blog Post & High Income Earners
Apologies for the time between updates..
Life has been busy and blog work has concentrated on website plumbing. I have been working on the Investments and Watch list Pages and I think I have a format picked out to track the investments & watch list. I will include the investments and incorporate the One Dad Stock Index for each one.. I will be using the One Dad Index to make buy & Sell Decisions and my hope is that you can come to use it as a resource for your own investment needs. Of course, everyone should do their own due diligence before investing – including knowing yourself as an investor. I do hope that the One Dad Stock Index can be one of the many pieces of information that you can use in selecting investments that are right for you and your investment goals.
Know Thy Self
Knowing yourself as an investor is the single most important piece of information that you can do – examine who you are and how you behave in real life situations. Are you interested in investing? Do you enjoy following financial & investment news? Do you view money as a means to an end? Does the stock market seem like a casino to you? Do you believe that the only way to make money is to trade the latest hot name? Does watching a stock price go down make you anxious? Would you be happy with average market returns over the long term? There is no right or wrong answer to any of these questions but they are one’s that every investor needs to ask of themselves and answer honestly.
In any case, I should have some website plumbing complete soon so please bear with me while I do so.
High Income Earners
Have you ever wondered why their are so many high income earners who keep on working? I have wondered about this for a long time, off and on. I had simply assumed that they had a drive that I did not possess. If I had an opportunity to make $300k a year I would probably retire in 5 years. I know this. Don’t get me wrong, I enjoy working and doing a good job – but this bird wants to fly free! So it has always baffled me why so many people who DO make a high income keep on working right along with me. Well, it turns out a high drive (and the corresponding low personal drive on my part) may not be the whole story..
Meet Kurt – a many lettered Financial Advisor for many high income couples. Kurt has a few things to get off his chest and boy – did he ever inform me why there are so many high income earners still working.
You have money for one or two out of county vacations a year, likely had a nanny for the kids longer than you really needed to, think nothing about updating to the latest tech gadgets (e.g. iPhone) for not only you but all the kids as well. You pay people to cut your grass, shovel your snow and clean your house. You are the organic food buyer at Whole Foods, belong to at least one “club” with high annual dues and of course you are the driver of an Audi, BMW, Land Rover or Lexus
How many of these people do you see commuting to work every day? A few I bet!
I view the car you drive as the perfect example of this lifestyle and your attitude towards it. Let’s be honest: no one really needs to spend $80,000 on an Audi or a BMW today. Oh, sorry, you don’t but it, you lease it – even worse. Nothing like leasing and spending one third more on a vehicle that you needed to! There are lower cost vehicles that also have heated seats. But you lease luxury vehicles because you can – the money is there, your friends do it and you like to look good too. You go girl!
Setting it up
Here’s the Problem
Long term goals still exist for all of us. And the problem is that boomers have zero focus on what they will cost in the future and even less of a commitment to save what it takes.
Couple this with expectations that the Audi lifestyle, the clubs and vacations will continue to age eighty and the average boomer is heading towards a massive wall of disappointment when they find at 60, 65 or 70 that there is nowhere near the money in place to fund the lifestyle that has become their (or their spouses!) expectation over the last thirty years.
It’s Lifestyle Inflation. Remarkably similar to the middle class consumption problem that plagues us all to a varying extent. I know, they are buying more ‘stuff’ than a middle income family but the similarities are remarkable – and does ‘stuff’ really make you that much happier? I like stuff too – but I like financial independence even more. You need to want to be free. It really comes down to balance but when I see people in Toronto, San Francisco & Vancouver getting 25 or 30 year mortgages with little money down and to thinking twice about spending 1.5 million on a bungalow – I wonder where it all leads.
Kurt has a dim view and I can’t disagree
The Wake-Up Call
Somewhere around age 50 you may wake up one Sunday morning, look at each other and realize time is passing. The first child going to university this fall at $25,000/year. You still have a large mortgage when your parents didn’t at this age. And Tom and Sue next door are retiring this year – honey, where are we at with that? Bang, bang, bang, life’s three major financial goals hit you between the eyes all at once.
We need to find out whether we are ok. We need a plan.
And so you end up at my door. As we sit down in our first complimentary meeting I spot your Audi key fob on the table. You agree to let me look at your finances – the first time someone has ever done this for you – and likely ten years too late.
Please read the whole thing here
Don’t try to keep up with your neighbours and especially don’t try to keep up with these folks!