The balance between fiscal responsibility and quality of life is one we all face before, during, and after retirement. For some, it's all about portfolio gains. For me, it's just as much about people. Yes, I want my nest egg to outlast me -- and I've worked hard to ensure that it does -- but that's not my bottom line.
I adopted the "living small" philosophy late -- but not too late -- in life. As I climbed the ladder of success in the corporate world, I thought I had to have the big house, new cars, and all those other Wall Street luxuries. What a fool -- not Fool! -- I was. I was wasteful. If only I had learned earlier that things mean nothing; People and relationships mean everything!
So now, despite the fact that I'm retired and can afford better things, I choose to live in a small condo, drive a 10-year-old car, and spend my time with loved ones. And as for the money I've saved? I use that to pursue what makes me -- and those I love -- smile.
Every October, my kids (and grandkids now, too!) join me for a camping adventure in the Nantahala National Forest in North Carolina. We get to hike the Appalachian Trail, follow a stream to a gorgeous waterfall, learn about the various fall tree leaves, and tell ghost stories. I also rent a large log cabin (every third year) in the mountains for the entire family, just to insure that we all get a chance to experience a genuine White Christmas together. The payoff is spending time with my family.
Finances versus fun
Recently, I encountered fellow Fool PaulEngr, who sought advice on balancing fiscal responsibility and quality of life.
"Once you are no longer struggling mostly toward reaching the essentials in life, how do you decide what the heck to do with the money that you are still saving? [And] how do you find that happy balance between investing your assets on the can do's (like paying off the mortgage early or buying rental property) and the quality of life fun things that, even though every investment advice book or web site screams out 'Don't waste your money on these,' still have quality-of-life value?"
This Fool did things the right way and had achieved (not without some struggles) the American dream of financial independence. He and his family always lived well below their means, had a six-month (or more!) emergency fund, paid off all loans/debts, established and funded college funds for the children, and had built a retirement fund that was (and is) more than sufficient.
Human capital
But even having overcome all the traditional financial hurdles, this Fool wanted to know more. I generally advise that folks on their way to retirement do two things:
- Save like the devil while living below your means (yes, I know I already mentioned it, but it's a good one!).
- Choose your investments wisely.
When the Fool asked for advice, I could have recited a number of great individual investment ideas. Or I could have told him about an indexing philosophy -- such as buying Vanguard Total Stock Market
But I didn't tell him any of that. Not because it's bad advice, but because, like me, it appeared that he was ready for a change in priorities. I chose instead to tell him about the three Ls -- laughing, learning, and loving -- that I believe are the keys to a happy life. In my 59 years -- both personally and professionally -- I've done all three, and I will continue to do so for my remaining years. After all, my retirement was the result of years of hard work. I've earned every moment of it.
The Foolish bottom line
Ensuring that Fools everywhere enjoy the retirements they deserve is Robert Brokamp, advisor to the stars. Actually, he's the advisor behind the Rule Your Retirement newsletter service, which just celebrated its two-year anniversary. Robert and his team have the financial experience and know-how to help get your financial house in order -- whether retirement is a year or a decade (or more!) away. Access to Robert, his "Eight Steps to Ruling Your Retirement," and the entire online RYR community is just a click away.
Ted Murphy is a veteran of 25-plus years of corporate warfare and nine years of entrepreneurial effort. What he doesn't know about investing he is patiently trying to learn. And learning everything he can about "investing in smiles" is an even higher priority! Ted owns shares of Microsoft, General Electric, and Procter & Gamble. Microsoft is an Inside Value pick. The Fool has adisclosure policy.
