Saving money is as much a mental process as it is a physical action. Many of us start our working career with the same lack of knowledge about retirement saving and planning. Today’s society is failing to teach the fundamental skills needed to achieve our retirement goals. "The Squirrels Ate My Bread" will teach you the what, why, and how to start your planning for retirement. It covers the necessary steps you need to take even if you only make minimum wage. Getting started early may be your key. Even if you start late, using the strategies in this book you can still reach your retirement goals.
Taxes, financial planning, retirement planning and saving money isn’t taught in high school or college unless it was your course of study. Making a lot of money doesn’t automatically give you financial knowledge. While earning a good income is helpful, you still have to learn the basics of how our financial system works.
Do more, not less, for your retirement. Learn the system and use it to your advantage. Change your thinking and you can change your future.
Don’t let societal demands eat your bread.
Saving money is as much a mental process as it is a physical action. A good friend gave me these words of wisdom. How profound and true these words are. If you are reading this book, you’re already interested in saving money, which is half the battle. You’re probably also at a loss about how to do it. How do you get to financial independence on a limited income? How do you get started when you are 18 years old and no one has taught you how our financial system works? Personally, I spent years struggling, learning, making mistakes, and many times outright failing while trying to figure out how to get ahead. I met other people on this same journey, striving to find a path to a better life. We were willing to work hard, sacrifice, and do whatever it took to get ahead, but we didn’t know what we needed to do or how to do it. We had to learn on our own.
I see the challenges Americans face today, struggling to navigate a system that they were never taught. Yes, we may have been told what to do, but we were never taught how to do it. We were given useless input like “pull yourself up by your bootstraps,” and “I did it, so why can’t you?” Everyone needs a basic financial education. This lack of basic financial knowledge diminishes your quality of life and weakens society as a whole. The result is that some people are unable to take care of themselves when they are older. For example, Social Security is not a retirement plan; it is a safety net. Many Americans are planning on Social Security supporting them in retirement. They are in for a very rude awakening. Social Security is a supplement to your retirement; it is not a retirement plan.
We are facing a huge problem with the retirement system in this country, or maybe I should say, the lack of a retirement system. We as individuals are failing to prepare for retirement, and we are also failing to teach the next generation the basics of saving, investing, and how to use the tax system to their benefit. Most people don’t start to figure this out until they are in their 50s or 60s. I have written this book to help you get started planning for your retirement in your 20s or 30s; to show you what you can do, even if you have a limited income. Those of you starting later, in your 40s and 50s, can employ the same techniques and save for your retirement, or maybe save your retirement.
It took my wife and me 30 years to reach our goals. That’s 30 years of going without certain things so that we could have a better tomorrow for our children and ourselves. By saving our money, it gave us the financial security that allowed us to pay for our children’s college educations. It also gave us financial knowledge to pass on to our children with the hope that they would have a better life and not have to go through the difficult financial times we experienced. Our goal was to give them a head start on their lives. Don’t get me wrong, we did not deprive ourselves or our children of a good life. But if you act now and follow what is outlined in this book, you can have a better tomorrow, too. Starting early is the key. Time is your friend when you start early; time is your enemy when you start late. Beginning to save early allows you to have a balanced life and not have to play catch-up in your later years.
My wife and I did everything in this book. We took it to an extreme level because we started late. We knew we were behind and realized our Social Security benefits wouldn’t be enough to sustain us in our home throughout our retirement years. We focused on eliminating our debt and making maximum contributions to our retirement accounts. Any extra money was directed to paying off the principal on our mortgage. I write extra money, but we never had extra money. To say we had no disposable income is an understatement, but my wife and I were both determined to achieve our goal of a comfortable retirement. Now that we are happily retired, I want to share with you what I have learned
The following point is particularly important: if you have a partner, you and your partner need to be on the same page. You need to have shared goals and agree on how to achieve them. You need to communicate your strategy with your children. Teach your children about saving for retirement. Break the cycle for the next generation. Your daily decisions will be the key for you and your children’s success.
I often question why basic financial planning, tax planning, or retirement planning isn’t provided in high school, or even in college. I believe retirement planning is a fundamental skill that everyone should possess before graduating from high school, and especially before applying for that first job. In this book, I offer you a starting point on how to use the system that is already in place to maximize your savings. I learned some of the basic strategies that wealthy people employ, and I used those strategies to improve our net worth and our retirement accounts. By following those strategies and using the current tax system and government incentives available to every working person in the United States, you will improve your retirement and your personal finances, regardless of the amount of your income.
When it is obvious that the goals cannot be reached, don’t adjust the goals, adjust the action steps.
- Confucius
We as a society are failing to teach young people how the financial system works. In short, the current system works like this: You finish school — it doesn’t matter if you dropped out of high school (I encourage you to stay in school) or completed your PhD; you leave school with little or no financial knowledge; you are expected to learn everything you need to know about your financial future on your own; then you venture out into the world, and it bombards you with advertising.
Advertising encourages you to spend your money. You are led to believe that success means making a lot of money and spending it on expensive items. The problem for many people is that they don’t make a lot of money. Marketing is king, and its purpose is to make you feel good about the purchases you make. You can’t stop this massive marketing machine, but you need to be aware of its powerful influence on your spending. For those who are young or those who have limited incomes, it is even more critical to control your spending and not give in to temptation. Take a few minutes and make yourself aware of the marketing around you. It’s nonstop. Marketing is a huge industry whose sole purpose is to get you to spend your money. But that’s not all bad. Marketing is not evil. In fact, it is needed to promote products and to foster competition. Consumer spending is what drives our economy and leads to greater returns on our investments. But as an individual, you must evaluate each spending decision to ensure that it aligns with your budget and your goals. How you spend your money should be your decision, and it should not be based on some company’s marketing plan. Don’t let the squirrels eat your bread.
I encourage you to change the way you think about money. Do more, not less, for your retirement. People say that the system is rigged against them, that it favors the rich. Yes, the system is rigged, but only because you don’t know how to use it to your maximum benefit. Believe it or not, it is rigged in your favor if you use it properly. The system favors the lowest income earners and allows them to keep more of their money. It offers lower and middle-income earners more incentives to save for retirement. By following the strategies in this book, you will enjoy the power of reduced taxes, tax-free or tax-deferred earnings, and compounding interest. Learn the system and use it to your advantage. Change your thinking and you can change your future. I will repeat this several times in the book: It’s not the money you earn that will make you financially secure, it’s what you do with the money you earn that will secure your future. Don’t let societal demands eat your bread.
Saving your money builds security, strength, confidence, and power. Consider this scenario: You have worked for 20–25 years at the same company. One day you go to work and find that you no longer have a job. Laid-off, downsized, company merger — you get the idea. Let’s say you followed the ideas in this book and have secured $200,000, $300,000, $400,000 or more in savings, emergency funds, and retirement accounts. You are not going to panic; you are going to look for another job with confidence knowing you are financially secure. You will be able to negotiate your next employment from a position of power and strength. But let’s say you saved nothing and spent your earnings for the past 20–25 years. You have no emergency fund, no savings, no retirement accounts. You are one paycheck away from missing your mortgage payment. Now you are in a panic trying to find another job. You are not confident, and you are not secure, and you will be negotiating from a position of weakness.
You have to start asking questions about your financial future and building your own financial plan. Don’t just look for a “get rich quick” scheme. It may take you years to build your foundation and reach your goals. I am not implying that this book will make you rich or a millionaire, but it might. If you only apply one concept from this book, you could potentially save an extra $100,000 over the next 30 years. That is $100,000 more than if you did nothing. Apply these fundamental skills and you will build the foundation to your financial future. I encourage you to act now. As I have already stated, time is your friend when you start early; time is your enemy when you start late.
Give a man a fish, and you feed him today. Teach a man to fish, and you feed him forever.
- Chinese Proverb