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Archive for October, 2004


How Does Your Present Spending Impact Your Retirement?

Thursday, October 28th, 2004

If you’d like a quick reminder of the importance of saving, consider how the dollars you spend (or don’t spend) today can impact your retirement. Assuming a 20-year holding period and a 12% annual return, every $1,000 you spend today equates to roughly $10,000 less in your retirement fund.

If you have young children, consider that the $10,000 you might save by buying a quality used car instead of a new one could be worth over $60,000 only 16 years later. Depending on where your child goes to school, that just might get her through all four years.

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Simplify Your Life (and Make It Pay Off in More Ways Than One), Part 2

Monday, October 18th, 2004

When we left off on Friday, I said, “Just a few weeks ago, my wife and I decided that something need to change, because we didn’t want to live that way. [And what I meant by "that way," was the way our friends Chuck and Laura were living.] We came up with a plan and have already started fixing the problem.”

Here’s what happened . . .

It was Saturday morning at breakfast. Patty and I had come to the realization that our life was getting way too complicated . . . starting with the “stuff” that was piling up. The closets were full . . . all kinds of bric-a-brac everywhere. We figured our house looked the way Chuck and Laura’s house probably looked a few years ago. That was an unsettling thought.

We knew that we had to simplify, but hadn’t yet come up with much of a plan to do so. That’s what we hoped to accomplish over the weekend.

But before tackling this major issue, we engaged in some minor small talk. And that’s when I made the mistake of mentioning that I wanted to renew my basketball season tickets. Understand that this is something that is important to me — one of the ways I promised to reward myself for working so hard. My mistake was that I’d “forgotten” to mention it to my wife sooner, and it didn’t get added to our budget when we set our yearly goals. Now payment was nearly due, and that’s when the crap hit the fan.

“You want to spend HOW MUCH?!” was my wife’s vociferous (see “Word to the Wise,” below), but fair, reaction.

So it wasn’t a good start to the weekend. I’d probably picked a bad time to bring up the subject in the first place. We weren’t exactly looking forward to the effort that was going to be involved in “simplifying our life.”

But then I got an idea.

“Suppose those basketball tickets don’t cost us anything? Then it wouldn’t be a problem, right? I can sell a lot of this old stuff. And whatever I make, I can put toward the tickets. We were going to throw out half of it anyway.”

“If it gets this mess cleared up, it’ll be fine with me.”

So it was settled.

I set some goals. I would do one room at a time, one each weekend. Anything we hadn’t used recently or that had no sentimental value was fair game. Big items would go to charity or a yard sale. Other things, I’d put up on eBay. I decided on a certain amount of money that I wanted to make each week.

That was about a month ago. The plan is working. By linking the unpleasant task of clearing out old junk to the reward of my tickets, I’ve become highly motivated.

We’ve already gotten rid of:

last year’s cell phones

reference books from an old hobby or two

an awful but fairly valuable poster (temporary insanity — bought in New Orleans)

various obsolete (to me) electronic gizmos

about half a dozen horrible gifts, too tasteless to even pass on to distant acquaintances

Now my wife is getting ready for the yard sale we’re going to have in a few weeks. We’re going to take advantage of some good tips that she picked up from a radio program the other day: Only put out decent stuff, not garbage . . . sort things by category and set up separate areas (clothing, kitchen, toys, etc) . . . buy some donuts and offer them free to the first people who show up (”Free donuts, while they last!”).

Meanwhile, as a result of the eBay sales, our shelves are already starting to empty. Space is reappearing that we haven’t seen in years. My wife is delighted.

My basketball account rep called the other day to say my tickets would soon be on the way. I am delighted.

Having an emptier house gives it a lighter, fresher feeling. It almost seems to have more energy. Chuck and Laura will be down this winter to visit us. Maybe they’ll be inspired to make some changes themselves after they see our new, simpler life.

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Simplify Your Life (and Make It Pay Off in More Ways Than One), Part 1

Friday, October 15th, 2004

Judy and John are great friends of ours. Recently retired, they own a beautiful waterfront house in Maryland, a small condo in Florida where they “winter,” and a sailboat just large enough for the occasional cruise down to the Bahamas.

They are kind and generous people, who lead a very rewarding and enviable life. But what struck my wife and I when we visited them this summer is how remarkably simple it is.

Their home is tastefully but almost sparsely decorated with quality furniture, a few pieces of just-right art, household necessities, and little more. They have no cable TV and no magazines. They buy books (lots of books), read them, and then pass them along to others. And when they decide to take a trip (which they often do), nothing stands in their way. Their children are grown and they have no pets. So they can pack up and leave for a month, on a few hours’ notice.

The simplicity of Judy and John’s lifestyle made a big impression on us. It was even more striking in contrast to what we witnessed at our next stop, the home of two other good friends of ours.

Like Judy and John, Chuck and Laura are kind and generous people — and their children, too, are grown up and living on their own. But there, the similarities end.

Literally thousands of trinkets and knick-knacks overpower their entire South Carolina home. There is “stuff” everywhere. You can’t even sit down without moving a pile of something or other.

The dog seems to have some kind of psychological problem (I believe he thinks his tail is a cat) and requires almost constant attention.

They have five — five! — cars that are shuffled in and out of their narrow driveway on a regular basis, depending on . . . it’s not clear what. There are only two people here, yet some of their vehicles have enough room to accommodate the Von Trapp family.

We brought a “hospitality thank-you gift” for them, but after walking in, we realized that giving it to them would be a cruel joke. The last thing they needed, was one more thing.

The issue came into focus when the trip was over and we were back home.

Looking around our house after being gone for those few weeks made it distressingly clear that we were in danger of creeping into the scary territory we’d just left. We were getting very close to having “stuff” all over.

Back at work on Monday morning, I mentioned it to Michael Masterson.

“I’ve written about this before,” he said. “Your home should reflect who you are, what your values are, and the things that you feel are important in your life. If it doesn’t, neither you nor your guests will feel comfortable in it.”

I looked through the ETR archives and, sure enough, that’s one of the main points he made in Message #835.

Our home was starting to not feel like “us.”

My office was full of computer reference manuals and old entertainment equipment was piled up on shelves and in closets. My magazines were stacked in almost every available space throughout the house. A poster that my wife hated from the day I brought it home was still hanging on the wall (and I wasn’t really crazy about it anymore either).

It’s easy for things to slowly deteriorate — so slowly that you don’t even notice it at first. The toll it takes is subtle but very real.

You begin spending time shuffling things around instead of engaged in productive activities. You start buying extra things because you can’t find the originals. (”I know it’s buried here somewhere.”) At some point, you get so overwhelmed it’s tempting to just give up trying. You feel that you’ll never get out from underneath all the mess.

You don’t have to live that way.

About a month ago, my wife and I decided that something needed to change, because we didn’t want to live that way. We came up with a plan and have already started fixing the problem.

On Monday, I’ll tell you how we did it, and how I got a very nice “personal bonus” out of it to boot!

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