In a recent blog entry, I wrote about living for today, since you only live once (YOLO). I touched upon why today might be the day to start living your life fully. It is important not to put off to tomorrow those things that are important to us today because, the truth is, none of us knows how much longer we’ll have here on Earth. Today I’ll take a look at the opposite approach of a YOLO lifestyle, and why it might be important to save every penny you can as you plan for a long future.
It is a scary world out there. Many things can go wrong, seriously wrong. Simply tune into a 24-hour news station and let your imagination run wild. It is not difficult to find a story about somebody coming to an abrupt, unexpected end. Whatever happened to the stories about adopted puppies and kittens rescued kitten from trees?
Life is filled with uncertainty.
Based on readers’ comments and feedback, we know that the majority of readers are still working. Whether you are new on the job or have put in decades for the same company, you’ve probably felt at least some uncertainty. Have you witnessed a re-organization, layoff, downsizing, or other major change at your company? How have you and your co-workers handled the constant change and uncertainty?
We sail within a vast sphere, ever drifting in uncertainty, driven from end to end. -Blaise Pascal
We can come up with an unlimited number of things that can go wrong with our best-laid plans. These are the things that we bump into in the dark or encounter in our worst nightmares. Here is a quick list of events that can wreak havoc in our lives:
- The stock market: The stock market has been unstable during the past three months. We have enjoyed a 7-year bull market and who knows how long it can be sustained. The media are reporting the doom and gloom forecast for the stock market. The sky is certainly falling and we had better sell our investments now!
- Mass shooting: The latest is a 19-year-old who went on a shooting spree at an Oregon college campus. When and where will the next shooting occur?
- A housing crisis or bubble: We all witnessed the collapse in 2008 when mortgage-backed securities, relaxed lending practices, banks, and automakers needing saving. They were too big to let fail.
- The economy: Job growth and wages are losing ground, and have been over the past couple of decades.
- Mass extinction from an asteroid: This end-of-the-world event is reported occasionally in the news media. There are collections of Hollywood movies that depict the deadly ramifications of this scenario. In the movies, the world survives. But what about in our reality?
- Nuclear war: Does Iran have nuclear weapons? Have terrorists secured nuclear weapons from the former Soviet republics? How about ISIS, do they have access to nuclear weapons?
- Divorce: Even with some fluctuation, divorce rates remain steady, at 50%.
- The weather: South Carolina has been deluged with rain from Hurricane Joaquin. California has been suffering from years of drought and wildfires. Let’s not forget about global warming. What’s next?
- Social Security: Do millennials believe Social Security will be there for them at retirement?
Saving every penny: Anecdotal stories about why understanding history is important.
History tends to repeat itself. I agree with this statement and during my lifetime so far have witnessed cyclical changes in the stock, housing, and jobs markets. Do we think that things will settle down now?
I have seen friends and family members declare bankruptcy. They found themselves trapped reeling in that perfect storm of limited savings, no side hustles, confining debt, and inflated lifestyles. The financial storm hits them when they lose their job and can’t find work faster than the weeks or months it takes to plow through their savings. Now they are in serious trouble.
How about those stories we hear about disabilities that have struck us in the prime of our working years? I have family members and friends who have been impacted with work-ending injuries and illnesses. They are struggling years later to make ends meet.
What is wrong with being over-prepared?
Consider the possibilities of saving every penny you can toward your FIRE goals. That’s right, doing all the things we read about to catapult ourselves to financial independence. This includes cutting the cable, phones, dining, entertainment, and overall cost of living. Don’t forget downsizing your home and eliminating a car. People, we are talking about the extreme approaches to saving and cutting spending to nearly nothing!
In one scenario, this new lifestyle has us living on beans and rice, in a rented storage unit or apartment with three roommates, and walking everywhere we need to go. This enables us to build a huge nest egg by saving 85% of our take-home pay, soon sustaining our lifestyles for multiple lifetimes if required. The end is near and we have a horde of money to combat the uncertainty, death, and destruction that will undoubtedly befall upon us! We are prepared!
The interval between the decay of the old and the formation and establishment of the new constitutes a period of transition, which must always necessarily be one of uncertainty, confusion, error, and wild and fierce fanaticism. – John C. Calhoun
Question: What if we are wrong in our fearfulness and are able to avoid all the disasters and calamities the news media predict? This would enable us to accumulate an impressive nest egg for safety and to retire early. What would be wrong with being in a position of strength because of our financial preparation actions?
Answer: Nothing, if you are living ONLY for the promised land of tomorrow…
You can always spend the money you saved on experiences, on new shiny things, or give it away to the charity or family members of your choice, later. That is definitely easier to accomplish when you have saved, as opposed to not.
YOLO or save every penny you can – what to do?
I think that, for many bloggers who write about personal finance topics and lean toward early retirement, a balanced approach is taken. Of course, in this article I could discuss how our approach should be about “everything in moderation” and achieving balance in our lives. I say, Phooey! Balance and moderation are what guarantees the “9 to 5 until 65” crowd their intended result. A life of working for The Man so that they can be “balanced” for all those years. I say, go for the imbalance now so you don’t have to wade through years of crap delaying your dream. Pull the Band-Aid off, and fast!
“If you will live like no one else, later you can live like no one else.” ― Dave Ramsey
Why not over-save? Readers of PF blogs know that for an extreme early retirement there will be some sacrifices. As I mentioned above: the need to cut the cable, cell phone, dining, extra car, entertainment, and the list goes on. Don’t forget about working an extra part-time job AND creating a side hustle.
The good news is that, with complete dedication, retiring early is achievable, probably decades ahead of your peers. You will also have a giant nest egg saved because you were prepared. What do you say? Are you up for the challenge, putting off YOLO now to save every penny you can?
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