“Warren Buffett and Harry Potter couldn’t get those two to retire sooner”: Our wasteful neighbors said our advisor was “lousy.” So how come WE pull out early?


I read the letter the four husband and wife friends sent him about how their different saving strategies and a shared financial advisor got between them. It is similar to my own situation, except that it was we who advised our wealthy neighbors to consult our financial advisor.

My husband and I left early. We were very frugal. Friends called us stingy. We prefer thrifty or frugal. We had no children, they had three children; I rarely went on vacation, they did every year. Who deserves an annual vacation? There is a reason we retire early. We always pay cash for our modest cars, but then we drive our cars for 10 years or more. I don’t think two months have gone by without at least one car payment. We love our financial advisor, and our quirky neighbors, eager to retire early like us, asked for her business card. I asked our friends how the appointment went and they replied, “Well, she’s a terrible counselor! She doesn’t know what she’s talking about! “At our annual review, I asked our advisor if they could retire early. She replied,” Warren Buffett and Harry Potter couldn’t get those two to retire sooner. “Is there anything we can do to help them? email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

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Dear friends, Everyone deserves an annual vacation. Whether they choose to take one or are lucky enough to have paid time off is of course another matter. But, in principle, I totally agree with them. We are all temporarily empowered, after all, and it doesn’t hurt to remember that. I want to be able to travel while I am young and as long as there are no physical limitations that hold me back. Unlike your neighbors, I’ve never owned a car, so whatever money I’ve spent on insurance, maintenance, and replacements, maybe it went toward my various vacations over the years, giving me memories that will last too. forever. But do you know what else they all deserve? Peace of mind, happiness (that’s usually an option too), and a comfortable retirement.

“Sometimes we deserve things today, and other times we think we deserve them tomorrow, if that tomorrow comes when I am 67 years old, what does it matter? “- The Moneyist

The latter is fundamental and speaks of the difference between his good neighbors and his good self. Sometimes we deserve things today, and other times we think we deserve them tomorrow, if that tomorrow comes when I am 67 years old, what happens? I’ve given myself three gifts: money set aside for a rainy day, money set aside for my retirement years, and the gift of knowing I don’t have to worry. My advice to anyone scared and anxious about not having enough money set aside for retirement: be sure to try. It will not be a straight line. Life throws challenges at us, and it’s up to us to face them head-on and pick ourselves up later. Giving up is not an option, because that fear and anxiety will only get worse if we spend without preparing for the future. If you can get a little pleasure out of taking out the trash and picking up my clothes, then you can win that dopamine derby by putting something aside each month, maxing out your 401 (k), or starting a Roth IRA or investing in an index fund of low cost. Few 30-year-olds are thinking about reaching 60. They are too busy paying off credit cards, student loans, and rent.

“There is no magic world of finance, as much as we would like to believe in elixirs like Bitcoin. ”

Your financial advisor is not an Omaha wizard or a Hogwarts wizard. There is no Magic World of Finance, as much as we would like to believe in elixirs like Bitcoin BTC, -77.20%. Investing in the Harry Potter movie franchise is, of course, an exception to that rule. That’s why former MarketWatch writer Shawn Langlois, who was a bit of a wizard when it came to spotting investment stories that would bewitch, annoy, or baffle MarketWatch readers, wrote these words about Tesla’s 12 million dollar investor. dollars that he said he will retire at age 39 after buying stocks. at the electric car company at $ 7.50 a share: “Don’t try this at home, kids.” Why? Because betting on an individual stock usually ends up as a bitter and regrettable warning. If your neighbors are the type of people who want everything that they now believe they deserve and that they are not going to appreciate the pie charts and graphs that your financial advisor removes from his hat. Planning for retirement is not attractive or exciting for most people, but it should be.

“Would we love Columbo if he drove a fancy sports car instead of a beat-up Peugeot 403 convertible? ”

When telling you that your financial advisor is “lousy,” your neighbors tell you, “We don’t want to know. We don’t want to learn. And we don’t like to admit our mistakes. “That’s a bad recipe for changing your fortune. They want what they want when they want it. During our recent online town hall,“ MarketWatch: Master Your Money, ”I asked Kathleen Kenealy, Director of Financial Planning at Boston Private, What Was the Biggest Mistake People Make With Their Retirement “Controlling Spending and Making Emotion-Based Decisions,” he replied. Another rule of thumb for your neighbors and anyone else who feels like making a drink when you see retirement headlines claiming they have a year of their salary saved for 30, double that amount saved for 35 and six times their salary for 50 : Everyone’s circumstances are different, and these frequently repeated rules of thumb are a guide, not hard and fast rules for retirement.

“Do something, anything. Get started. You retired early because you were happy with what you had. “- The Moneyist

“Someone who wants to retire at 50 and travel the world, who owns two houses and plays golf all year round, will need to save much more and faster than someone who is content to work until 65 or 70 and not anticipates the need to maintain a luxurious lifestyle in retirement, ”Kenealy said. “If you’re behind, make small changes, like setting up an emergency fund with savings for three to six months.” “If you’ve been helping your kids pay for college, you might be a little behind your retirement savings by the time you hit 50,” he told me. “But once they’re done with school and off the family payroll, you really should increase your savings as much as possible in the last two decades before retirement.” I would tell your neighbors: Make those last few years of peak income count. Do something, whatever. Get started. You retired early because you knew how little you needed. I appreciate an old pot. It is much more interesting than a new Porsche, even if the latter is a lot faster and more luxurious. (Would we love Peter Falk’s Columbo if he drove a fancy sports car instead of a beat-up Peugeot 403 convertible? Probably not.) As you discovered, there is a serenity to being patient and going slow. If the coronavirus pandemic has taught us anything, it’s that it may be okay to slow down every now and then, take stock of what we have, and marvel at how lucky we are to continue to have our health and wealth. Anyone who lives a comfortable life with hot water, food, and a roof over his head is rich in my opinion. The Moneyist: When my parents died, my sisters and I divided their estate. I chose a painting that can be worth $ 50,000. Should I tell them? Hello MarketWatchers. Take a look at Moneyist’s private FB Facebook group, -0.47%, where we search for answers to life’s thorniest money problems. Readers write to me with all kinds of dilemmas. Post your questions, tell me what you want to know more about, or rate the latest Moneyist columns.