September 5, 2009

A way-better retirement strategy

Remember, a while back I suggested that I just might have a new, better and novel retirement strategy? Remember that I suggested, I’d provide the details in a follow-up post?

Well, here it is. Here’s my better retirement strategy.

Forget retirement.

No, no, wait! Come back, let me explain.

You’re back? Great, let’s get started.

First off, I want you to think about retirement and, more specifically, I’d like you to think about what you’ll do, post retirement. I ask because, based on my observation (and, believe me, I’ve been observing the sucker for more than four years), most folk view retirement in one of three ways:

1) The chance to finally escape from an unpleasant, stressful (and probably boring) job

2) The opportunity to be on “permanent vacation”

3) The chance to begin pursuing a passion

In all likelihood, those in the last group are the only ones who stand a chance of enjoying retirement (and I’ll explain why in a minute). As for the first two groups? It seems that most in that lot will be in for an unpleasant surprise. That’s because they’re so focused on escaping from their current employment environment, or they have such an unrealistic expectation of what’s awaiting them, that when that magical, supposedly idyllic, retirement arrives, they realize—very quickly—that the retirement reality is nowhere near as great as the the retirement dream.

In a word, I’m describing boredom.

The simple truth is, for many people (but not for all people, I must emphatically point out), retirement is boring.

So what’s the alternative?

Well, an obvious solution is to make sure you align yourself with group number three. That way you’ll, at least, have a plan for what you’ll be doing, all those single days that will make up the rest of your life.

Think about it. Whether you enjoyed the experience or not, that daily employment routine is going to have to be replaced with something else. And watching TV, or visiting the mall, or relaxing in the backyard—each and every day—is not going to cut it. Not by the longest of shots. It’s all going to get real monotonous, real fast.

If you plan, however, on pursuing a passion, I’d say you have a near fighting chance of beating the boredom blues.

And, if you agree with that premise, here then is my way better retirement strategy.

[Beginning of Disclaimer] Do not interpret, in the following public-service message (and/or unsolicited suggestion), that there exists a recommendation that you stop salting money away. It’s always good to have rainy-day money salted away. And here’s the interesting thing, the strategy I am about to describe may actually result in you salting more money away. Why? Simply because you’ll be happier and you thus won’t have to spend money to buy a bunch of stuff that is supposed to make you happier, but which, you soon realize, is just a bunch of useless stuff. After all, isn’t it really all a mistaken belief that such stuff will make you happier anyway?  …But I am getting quite off topic now, and this is starting to look like an editorial (OK, a rant), and not so much like a disclaimer at all. So let’s get back to our regular programming… [End of Disclaimer]

Now, where were we? Ah yes, the way better retirement strategy… Here it is:

Deep-six that anticipated retirement day entirely and find a way to begin pursuing your passion right now. Let me say it again; don’t wait for retirement, just do it (whatever your “it” happens to be) right now.

The idea (and it’s not a new or original idea, I will admit), goes like this; if you did, every day, what you loved doing, wouldn’t you want to keep doing it forever?

I’m thinking; yes.

Now here’s the twist. All you have to do is figure out how to earn an income while doing what you love.

Impossible? No. Difficult? Maybe at first. Requires imagination? Perhaps. Takes commitment? That’s an affirmatory.

And, I know what you’re thinking too.  You’re saying, “I’ve got responsibilities to live up to, bills to pay.” You’re wondering, “How the hell am I supposed to do that—start pursuing my passion, and earn income?”

Well, sorry if this sounds like a cop-out, but I had to write a whole book in order to explain that (and a bunch of other stuff too). But be assured, the strategy is described in the book. And the publisher is now telling me that we should avoid the pre-Christmas rush and the post-Christmas blahs.

So we’re looking at a February 2010 release.  If you’re willing to wait ’till then, be assured that I’m willing to continue blogging–and ranting–until then.

Ranting, after all, is one of the things I do best.

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August 16, 2009

Money: illusion or elixir?

My friend Gwen McCauley sent me an interesting weblink that relates money with an individual’s tolerance of pain or affront.

I love coming across this stuff. Maybe it’s because (insert shameless plug here) my upcoming book suggests that money, as I mentioned in my very first post, is nothing more than an illusion.

Or maybe it’s because it serves as some sort of validation. After all, it’s one thing to make outrageous claims about money in a novel, but it’s something quite different when done in academia.

And yet this article written by Robert Goodier, and published in LiveScience.com, suggests, believe it or not, that money relieves pain.

And it doesn’t do so in ways you might think either. No, the article doesn’t say that having more money relieves pain, it says that pain is relieved by just touching money.

Now, how far-fetched is that?

And that’s not all money does either. As Goodier’s piece explains, experts conducted six separate experiments to show that, in addition to reducing physical pain, the mere handling of money served as “a proxy for social acceptance.”

If you haven’t hyper-linked to the article, let me summarize it for you.

Undergraduates were separated into two groups; one counted a stack of $100 bills, and the other counted plain paper. Then, members of each group had their fingers dipped in 122 F water.

Yes, you guessed it. On average, those that had counted money felt less pain than those who counted paper.

In another experiment, after counting either money or plain paper, each of the two groups played a game of Cyberball.  Unbeknownst to half of each group, they were playing with a computer programmed to never pass them the ball.

While all undergrads playing the doctored version felt rebuffed, those that had counted money didn’t feel as offended as those who had counted plain paper.

Which makes me wonder…. what does it all mean?

Well, according to Kathleen Vos, a marketing professor at the University of Minnesota, it means, “These effects speak to the power of money, even as a symbol.”


Which is, no doubt, true.

What it also means, at least to me, is these experiments prove, once again, that it’s not the actual possession of money that people fixate on, but rather the concept of money.

And, could it also mean, as improbable as it may sound, that maybe money is an illusion after all?

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July 18, 2009

5 ways to know you’re rich

It happened again—an email landed in my inbox guaranteeing me another sure-fire way to make millions. There are, it appears, a lot of people interested in my balance sheet and my financial position—total strangers, concerned about my wealth. Imagine that.

But had any of them read my prior post, they’d have realized they’re wasting their time. The reason, you see, is that, while there is a pervasive belief that life would be so much better with so much more money, I happen to be in a minority position that believes it’s not about the money. Now, don’t get me wrong. I’m not saying I don’t need money, or money’s evil, or anything like that.

What I am suggesting, though, is when we discuss money, what we’re really revealing is our attitude, and our perceptions, about money. That premise of mine, by the way, gets challenged. A lot.

Imagine my surprise, then, when I found this on telegraph.co.uk “A brain scan study has shown that no matter how wealthy you are, money is most rewarding if you have relatively poor friends, peers and colleagues.”

The Telegraph’s article describes a scientific experiment that used scanners to measure the part of the brain where a person’s “reward centre” is located. In their study, scientists discovered that when a participant won money, it triggered a noticeable increase in their reward centre. What was surprising, though, is those same participants registered an even more marked increase in their reward centre when they got more money than anyone else.

All of which, I believe, reinforces the suggestion that it’s not about money, it’s about being richer.

And so, with that in mind, here’s my unscientific list that identifies…..

5 ways to know you’re rich:

1)      Do you earn at least $25,400 per year? Based on statistics from the World Bank, 90% of the world’s population would agree that you’re rich. If you earn more than $33,700 you’re in the top 5% of the world’s income earners.

2)      Own a computer? If you do, you’re rich. Almost 91% of the population can’t afford one

3)      Own a TV? 75% of the world doesn’t. Televisions, I guess, are the trappings of the rich.

4)      Made a phone call recently? Did you know there are about 2 billion people who have never used a phone, ever? Want to feel rich? Just pick up and dial.

5)      Own a car? You, my friend, are rich. 90% of the world’s population can’t afford that privilege

You see? It really isn’t about the money.

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July 16, 2009

Do you prefer a salary of $50K or $100K? Are you sure?

Okay, I’m back. At least until I’m gone again, in a few days anyway–and only for a few days.

After last week’s brief hiatus, I returned to an inbox populated with requests for posts on the money thing. While happy to delve into that area (hey, I’m always ready to ponder and postulate from atop my soapbox), I first want to emphasize that, while my upcoming book might say something about money, it says nothing about money itself.

And if that hasn’t intrigued you, consider this.

Most of us, I’m sure, have an unshakable belief that more money is a good thing. I mean, let’s face it, those are two mouth-watering words there. While ‘more’ and ‘money’ are pretty compelling in their own right, taken together, in one thought process–more money–well, who wouldn’t want some of that?

And yet, when put to the test, it turns out, funny enough, that the majority of people  don’t want more money at all. No, that is not a typo and, no, you didn’t misread that. It’s both a documented fact and the honest truth.  Let me explain.

About 10 years ago, Harvard economists Sara Solnick and David Hemenway conducted a study that asked this question; would you prefer an annual salary of $50,000 or $100,000? Believe it or not, the majority of participants (all of rational mind and sensible acuity) opted for the 50K.

You may well wonder, what sort of preposterous madness was that? Actually, it wasn’t madness at all, but rather something called positional concerns.  And it’s also, on my part, a bit deceptive, because what I haven’t told you is there was a second part to the question. In fact, the offered choice went like this.

Choose whether you get a salary of;

$50,000 while other people got $25,000

OR

$100,000 while others got $250,000

That’s where the notion of positional concerns comes in. You see, it appears we all have a tendency to compare ourselves to our peers. And during that process of comparison, it also appears that we’re happiest when our perception tells us we’re better off than our peers (even if, in absolute terms, we may be even worse off).  Which explains why most people chose option A.

When framed as such, do you think you’d also choose option A? Whether you would or wouldn’t isn’t really all that important. At least not to me. That’s because, to me, the Harvard survey wasn’t about money, but rather the perception of money.

And that, among other things, is what my book addresses.

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