Category Archives: Life Education

Retirement Intelligence 101 Part 2 What you need to Retire

Life Education

In Part 1 we said we need $64,000 per year to retire. In Part 2 I’ll discuss some options for how to get this without working.

To my knowledge in 2018, these are ways you can make money without working:

  • Licensing deal: you help someone else’s business and in return they pay you for that help for the rest of the life of that business. An example might be you create a new toothbrush holder. Someone with a business like Walmart will buy your creation from you, then manufacture and sell the toothbrush holder you designed and for every one they sell, they give you some of the money they get. Another example is you work in a movie as a lead actor. Then every time someone buys the movie, you get some of that money.
  • Investing: just by having money, you can make money. This is a big topic so I’ll just stop at the main point.
  • Business Ownership: Similar to investing, you buy or create a business that hires employees to work for you so that you don’t have to work yourself in order to make money.

Each of these options has a varying range of success.  A key point is that Licensing and Business gives you money because of work you did in the past, and your future earnings is dependent on the success of the work you do.  Investing is much safer, because it’s dependent on the success of the world. Eventually, you want your core income to come from a reliable source, and investing is that reliable source.

The current term for this idea of being financially independent and retired early is called FIRE and there are multiple resources on this that go into more detail so I’ll leave a few links for you to read if you want more detail, and just cover the basics here.

https://twocents.lifehacker.com/the-basics-of-fire-financial-independence-and-early-re-1820129768 

http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/ <- $4 per $100

What is investing? It’s making money out of money. It’s magic. It’s breaking the laws of what you think is allowed.  But capitalism strongly supports this: if you have money, the system is designed so you can get more of it by investing.  If you live in capitalism, investing is its core.

How much money can you get from investing? The real answer ranges from 0 to infinity, but there are specific strategies geared for retirement that you can hire someone else to do for you.  So given that you hire someone else to do it for you, how much can you get from investing? Well, roughly for every $100 you invest, you can get $4 per year to spend. (For the purpose of simplifying investing, we will go with that. The second article above can go into more detail as it is a complicated subject.)

Doing some math

x * ($4 / $100) = $64,000
x = $1,600,000

we find that for the Average American to retire in 2018, they would need to have $1,600,000 cash.

Some of you may look at this and go: that’s never gonna happen. $1.6 Million?? How can I ever get that much money when I barely make a fraction of that?  The answer is financial discipline, tax saving, and leverage. And we will get into those topics in part 3: how to achieve financial independence and retire early.

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Retirement Intelligence 101

Life Education

Welcome to Retirement Intelligence 101, a series on how to retire.  We will first define what it means to be retired by listing a few details that describe the state of being retired.  Then we will define what you will need in order to be retired.  Then we will discuss what you can do to get what you need in order to be retired.  1. How to get 2. what you need 3. to be retired.

As a Legal Disclaimer: None of this is financial advice so don’t sue me.  Evaluate what you read with your own judgment. I am just sharing my thoughts and opinions.

Let’s dive into Step 1.

What it means to be retired to me is you have the following taken care of for the rest of your life:

  1. Necessities (Food and water, Shelter).  You will never have to worry about being able to afford some form of this in order to stay alive (quality of food/water/shelter is not guaranteed)
  2. Emergency Protections (Insurance premiums paid for, budget for emergency expenses). You are unlikely to have major expenses come up like going to the hospital and getting a large bill, but if they do you are prepared for the bill because insurance will pay a lot of it and your emergency savings fund will pay for the rest of it.
  3. Inflation.  You don’t have to worry about becoming poorer over time due to inflation. (Google for “Inflation” to learn more)
  4. Your life improves over time. You won’t be stuck in the same lifestyle for the rest of your life.  As you age, you get more money and you can buy more and better things.
  5. Budget for fun. You have money to do what you want, and over time you get more money to do what you want.

And the key point is all of this is possible without you doing any work as an employee. 0 work as an employee, you get this. For the rest of your life. That is retirement. It’s also financial freedom.

We can add up the budget for all 5 categories to come up with the total amount of cash you expect to be able to spend per year.  Let’s say it’s about $51,000 based on the spending of an Average American (article here) which is $64,000 per year before taxes.

To retire you will need to somehow get $64,000 per year before taxes.  Without working.  How do you get money without working?  Stay tuned for the next post where I tell you that answer!

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Help Emotionally Troubled Loved Ones by Sitting with Them in Their Emotions

Life Skills, Mental Health
If you have someone you care about who is going through a difficult time and you don’t know how to get through to them, here’s how: Be present with them and spend time with them.  Don’t spend brain power solving their issues. Don’t spend energy telling them what they should do without them asking you for that.  Don’t take the initiative, the free will, the power to control their own life away from them.
What someone needs when they’re in an emotionally charged state is for someone else to absorb that emotional energy through active listening.
A friend recently showed me a South Park Episode about suicide (Season 21 Episode 2: Put It Down) and in it, near the end of the show, there’s two scenes that are really educational on how to help a friend.
A good friend doesn’t judge, doesn’t criticize, doesn’t problem solve. A good friend just sits with the person and listens and feels the emotions that the other person is feeling so that the person doesn’t feel alone and scared anymore because there’s someone else together with that person.  Sit in the emotions with the other person, ask them “how do you feel.” “How else do you feel?” “Wow, that sounds scary, how do you cope?” “That sounds hard, I can understand why you’re feeling this way.”  Let them express to you all that they are feeling, and listen. Sit and listen. Feel bad with them.  Keep feeling bad with them until they have said all they want to say about the topic (it may take a very long time) but only after they have been allowed to discharge all of their emotions will they be able to calm down, relax, and think clearly again.
The order of health priority in all situations is:
Emotional -> Mental/Logic -> Beliefs/Spiritual/Psychological -> THEN Physical Health -> Society (Finances/Career/Relationships).
First help your loved one with their emotions.
Then you can discuss the logical solutions and actions you can take to problem solve.
Then ensure that they can accept the logic you discussed, and have alignment between their Beliefs and the Logic. If they don’t, they may revert back to an Emotional state.
Only after all 3 Healths (Emotional, Mental, Beliefs) are healed can you then focus on Physical Health or Society Health.  This is why when you say “Go get some sleep” or “Go exercise” or “Take better care of yourself” to someone who is emotionally uncomfortable, they get mad at you. It’s because those statements do not help until you have discharged them emotionally for your loved one. .
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