Views on Retirement from the Grasshopper

Retirement! It's a big word that is loaded with planning, fear of how much is enough, joy from the freedom of what it affords and the ability to focus solely on passions of life that bring will happiness and peace.  Fear is the most powerful emotion of them all and what drives most people in the planning and decision making.  I for one have had three separate retirement and college funds wiped out by the economy i.e. housing market crash of the 90's, dot com crash of the early 2000's, and the biggest one in the 2008 (d)epression!  Each time, more fear and more anxiety because the length of time to grow the money was substantially less.

There is an evolution to the thought process as you age.  I will share mine and because maybe it's relatable.  Share this with a college-aged youngster with piss and vinegar coursing through their veins as a cautionary tale. Youth is wasted on the young, right?

When you are young (late-teens to early twenties, say), your old age seems impossibly far away. You are not yet aware of the way in which the lengths of the years shrink, relative to your entire lifespan, as you age. In terms of the psychological perception of the passage of time, the years pass more rapidly as you get older.

For entirely understandable and forgivable reasons, young people usually fail to realize just how lucky they are to be young, with all their physical and intellectual energy, their optimism, lack of cynicism and jadedness, and the many decades of life they have stretching out before them in which they can achieve their dreams (if they actually decide on their goals and then apply themselves to achieving them - which many, sadly, do not).

That was me! Young and strong but with a broken back that would be a constant companion for the rest of my life.  Had I known then what I know now just given that fact, would I have not been a bouncer, a construction worker, a weight lifter, etc. etc. etc.?  The answer is an emphatic yes!  My back would be a problem no matter what I did and, even young an healthy in every other regard, I did not limit myself in any way, except the ocean because the one thing I cannot do is tangle with the surf! The memories that I cherish from those early years far outweigh the consequences of my actions.  Most importantly, if I did not live by the sweat of my brow as a youth and discover that I had a knack for running a business, I would not have learned what I-did-not-know when I got wiped out the first time and then decide to focus on education.

So these were the early years, no thought of retirement AT ALL!  Now onto the mid years taking the lessons learned into account and forging a new path.

In business school I learned all kinds of simple lessons early that still shape the way I live, spend and eat.  Those coupled with growing up poor, having it and losing it, gives me a healthy fear and respect for money.  I now know there is a time-value-of-money and I understand compound interest. If I spend a dollar today on an impulse purchase, what did it actually cost if that dollar was invested and left to grow over the course of 20 years? God forbid you purchased it on a credit card with a high interest payment!

So, in this era, I was smarter and more purposeful with my money.  My first foray into the corporate world introduced me to the traditional wisdom of employer matched contributions into a retirement account.  I am not one to turn down free money so of course, max that out!  Nothing in my life experience had taught me otherwise and now I am in the corporate world,  I am educated so my finances would be stable for the rest of my life, right? Wrong!  I went all-in on this new thing called the internet and was smart enough to not go to work for a highly speculative .com, rather a large internet consultancy that brought fortune 500 companies into the digital age.  Transition or die or become roadkill was out mantra!  And then it all came crashing down, quickly and without mercy in February 2001 with the .com crash.

Not only did I lose my meager cash savings but I learned many valuable lessons in the process. First, if you reach a point of desperation where all other liquid resources are drained, the retirement funds are calling to you as a lifeline but the early withdraw penalties will undo any good that you have done in trying to plan for the future.  Second, there are no more gold-watch jobs so the thought of slowly building over a long period of time in the same career, with the same employer, are gone!  I had a baby and an ex by now so diapers, food and monthly payments HAD to be made, no matter what! Third, don't play the stock market by picking individual stocks, even if you think you are diversified.  Technology has made it so that most wealth is made in millisecond transactions based on information that is not even available to the retail investor!  Lastly, I was brought back to my core beliefs of what is really important, food, clothing and shelter!  As long as I, and my daughter had those three, I could rebuild! Financial wipe out #2 complete, and now its time to move on with a new purpose.

Statistically, I am now in my biggest earning years and that fact was not lost on me at all.  I had unlimited energy, physical strength, education and a daughter that I wanted to give a privileged life to. I used all of those attributes during this time, took some calculated career risks that paid off and money came easy.  I achieved financial independence by living below my means, never competing with the Jones' and thought I was now set on a firm executive path that could not be altered.  There was a Lottery commercial that gave you a peak into the insight of a winner when he walks into a grocery store, looks around and thinks to himself, "I can afford all of this cheese." That was me! I could buy anything I wanted, drove Mercedes, had a nice house that I justified because I could have had much bigger, but I thought I was living simply.  I crossed the globe many times over for work, ate at the best restaurants, stayed at the nicest hotels, built a global network of friends and colleagues, I was high profile in my positions, yada yada yada...... I was unstoppable!  And then it happened. 2008.  

I had been running a Korean company for the previous several years that were simply not performing well in the global market so I made the decision in April to wind down operation in the US and Europe. The intent was to take the summer off and spend time with my daughter.  She was fully entrenched into her gymnastics career, in private christian school and I wanted to be part of it all.  I began to see the signs of economic melt down in the housing market but I had no concerns since it would not affect me.  With a big bank account, a healthy college fund established, and a lateral career move established after the summer, I could be a passive observer and count my blessings, right? Wrong again!

My daily routine was watching the disastrous tale that was unfolding in the markets on CNBC.  The carnage was unbelievable but it still didn't hit home, that is until late in 2008 when the financial markets showed signs of impending doom. I was a technology guy and had a job lined up in my field so it still did not register.  The company I was where I was taking my firmly established skill-sets to was a global company making a big push into this space and called my position a "critical executive leadership hire" so I had no concerns.  I maintained the lifestyle and carried on with the plans of the summer with well earned vacations, enjoying time in my modest house that I so carefully remodeled, but never spent a lot of time in. I learned quickly that I can do a lot of things but a green thumb is something that I do not posses!

When the summer ended and all the fun was had, it was time to start my daughter back at her expensive private school and for me to resume conquering the world in my new executive function. The time was October, 2008.  I flew to Texas to meet with corporate, meet my team, go through all of the hiring paperwork, etc.  I had everything but a start date. The company hired 50,000, mostly college recruits, people a year but given the economic conditions, they put a hiring freeze in place.  I, however, was put on an airplane with the assurance of the "critical hire" designation that firmly placed me outside of any hiring freeze. Life is still good!

Then it happened.  Icons of the financial industry started to drop like flies and the term "Too Big To Fail" had no meaning anymore. The ripple effect hit every business, in every industry ,and my large global company derived much of its business from too-big-to-fail companies around the globe. Call after call, week after week, month after month, "be patient, critical hire..........." I held onto those assurances late into the first quarter of 2009 and I watched my modest lifestyle drain my bank account down to levels that worried me but I was still good.  Eventually, the opportunity was pulled altogether so I had to start the process all over.

Now, the economy is in complete in total meltdown and I am a "something" I never thought possible, a victim of my own success and the poster child of somebody that could not get a job, any job, in my field anyway.  Too expensive, too experienced, hiring freezes across the board, man was it tough!  The executive hiring process is a long and arduous one that entails many interviews by phone and in person.  Most require travel and myriad activities. The initial candidate list has usually been developed by executive head hunters that have culled the list to a half dozen or so qualified candidates.  These were not usual times and it was not a good time to be a head hunter!  Companies had more qualified candidates in the hiring pool than they knew what to do with and most were desperate to hang onto their lifestyles, me included!  In no way were they up for paying tens of thousands of dollars to the recruiter for the introduction. Case in point, the source of my next prospective employer came from my own network.  Another well-known global company with a strategic executive position that would forge a new path out of this recession. This time however, 25 interviews, travel, and 6 months competing with 250 other highly qualified candidates!  I made it to the final two.  I knew the other candidate well, for years, but we had very different skill sets so I thought it would be a coin toss.  I received a congratulatory call the night before from him indicating that they had passed on him, so by default they had chosen me.  My call was the next morning but for some reason it didn't feel as though I had prevailed.  My intuition proved correct when the call came to inform me that in fact, I had not gotten the job but that they decided to hire internally! This was the world that we lived in now.  One thing that I am very happy about is that in my final interview, I gave the other guy a glowing recommendation and he eventually got brought on in a different capacity.

Wipe out number 3! It was not until mid 2010 that I took a job out of desperation to keep the lifestyle going!  Worst mistake I have ever made and never to be repeated. Another lesson, never take a job out of desperation and never with a company that is equally as desperate that believe you are the answer to their problems! The time will be short, the leash will get tighter by the day and your psychological well being will diminish with every passing hour. Second lesson, downsize earlier than I did and never create a situation where that is not an option!

At this point, the Mercedes is gone, the house is gone, the private school is gone, the cash reserve is gone, the college fund is gone, the retirement is gone, but worst, my health is gone.  The back caught up to me, the stress of everything gave me many more deadly health issues.  I traded luxury hotels and fine dining for hospital rooms and heart friendly meals. I was a shadow of my former self and the thing that will haunt me for the rest of my life is that my daughter was with me full time and she had a front row seat to see the destruction of her invincible daddy that ruled the world at one point into a very sick man.

Moving on to the silver lining and a vote for experience, education and faith! Now that I am on the other side, I am glad things played out the way they did. Anybody that knows me well will tell you that I am very different.  I will save the particulars for the book but I will say that I am better in every way now than I ever have been.  If not for the education and experience that I have I would not be able to do what I did.  If not for my faith and my daughter, I would have just checked out, and sad to say many did during those dark days. To be honest, I extended the misery relying on my own strength, desperately trying to restore myself to my former status and position in the world. It was my experience, education and love for my daughter that brought me back financially when, by the grace of God, the exact right opportunity, at the exact right time, dropped into my lap that made me whole again.  It is my 40 year walk with the Lord and the lessons that I learned through all of the pain that taught me how to live today.  Just like any relationship, it's had its ups and downs and I was a bad boy for a while, not in a criminal way but in a very haughty way saying to him, "thanks!  I got this and I'll take it from here!" Glory be to God! If you don't like that statement, don't read my book because credit will be given where it is due!

Now the retirement portion.  Obviously I was forced into retirement but I think it was all part of the plan. With all of the lessons learned and with money to invest, I lived by a couple of key mantras that I now think are incorrect for me, and maybe you. First, since I bombed in the stock market and swore to never do it again, I set out to find a new way that would provide the security into my later years and a healthy college fund (number 3!).  I came access a controversial figure by he name of Dave Ramsey, a faithful icon in the financial planning arena. The core of his principals of being debt free, never investing in a single stock, and here is the big one, RETIRE WITH DIGNITY, were already part of my core. He teaches a course called Financial Peace University that will give you a plan, a method and a new way of thinking about money.  It's offered through many, many churches across the country.  It would be perfectly applicable for the majority of people.  But, this is where I was wrong, and could be wrong again but I think i'm right about this one! The biggie is the definition of Retire With Dignity.

Traditional culture and retirement advice has you on a path to work and save your whole life, build a college fund, work with a financial adviser to build a diversified portfolio that will return a modest 6%. Ramsey is a bit different in that the first order of business is to get out of debt because your get no real gains from investments if your are paying off interest on your debt.  Absolutely agree with this and I am happy to proclaim that I am debt free, always have been until I got into trouble so I am happy to say that it was already part of my core.  This is the benefit of growing up poor and losing it all a couple of times.  He gives you a strategy first and foremost how to get out of debt and re prioritize what is important.  Once you are there, he gives you a strategy for growing your wealth through sensible investments.  The key take away for me was not investing in single stocks, rather pick a mutual fund or other investment fund, with a history of beating the S&P, that spreads your basket over 100's of stocks. He has names that are closer to the 10% figure, which enticed me to learn more. As far as financial advisers, if you go to the traditional, they will talk about some debt is good debt, we disagree for the following reasons, yada yada.......he has a list that won't.

Where we differ is on the definition of Retire with Dignity.  With my body breaking down before my eyes, my energy level diminishing, my mind and memory fading, my daughter in college now under a fully funded college plan, and lack of motivation to play the game any longer, "Dignity" is not waiting for all of these things to get worse, and they will, only to make sure that I am not a burden later.  What enjoyment would come from watching the world pass by when I can't walk anymore? Nobody knows when they will be called home, to wherever that may be, so all of the planning for enjoyment that may never come?  Inheritance going to those that won't really appreciate it? NO THANKS!

Another area where my life experience and biblical teachings come in. I consider the apostle Paul a kindrid spirit because I share the same mindset when he says:

"I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want."

My history and experiences in this world have taught me both.  I get teased about my frugality constantly but there is a purpose and a reason! One of my idols in business is Elon Musk, not just for his brilliance when it comes to technology but what he did to prepare himself for this success.  When he had nothing to speak of while in college, he create the $1 per day challenge for himself.  If he could do it, he figured he was smart enough that no matter what happened, he could make and live on $1/day. So yeah, go ahead and make fun of me for shopping at the 99 Cent store!

So here I am, living a dream! The fact that I am blessed in every way is not missed on me! I spend money where I have to and won't where I don't.  If I am cheap on Betty or Xiffy it will cost me more later, in money and safety.  If I eat out at all, it is always happy hour and usually no more than $10, a special celebratory dinner for myself (Kicken Crab!) or I am treating someone to a meal out of gratitude or love.  I consider the implications of EVERY dollar I spend and I can't justify overpaying for anything e.g. the same bag of ice for 99 cents or for 2.50! I don't have a mortgage so slip fees and Betty related travel expenses are justified and still much less than most.  The most important part is I balance self indulgence (if you wan't to call it that) with giving.

Can anybody do this? NO!  The stars, my nature, and timing all just suddenly aligned perfectly.  My daughter is now in college and it's paid for, I report to nobody but the man above, I have no debt, everything is done in a proper manner i.e. insurance, medical, etc.....I am surrounded by loving and supportive people that know me.  Will I be living on a fairway of Pebble Beach when I get older? NO.  Do I mind just getting by on social security? NO! Can I see around the corners of life yet and believe that I am always making the right choices for my future? Who can say that! The main thing is i'm able, happy, enjoying life and I have a life to reflect on to grade myself and the peace that comes with doing a good job.  My only goal in life now is to hear the words, "well done my good and faithful servant"