← Ready For Retirement
Ready For Retirement
Root Talks: Spend Your Way to a Happier Retirement: 5 Pillars of Better Spending
00:19:01
Loading summary
Transcript15 lines
- [00:03]
A
This is another episode of Ready for Retirement. I'm your host, James Knoll, and I'm here to teach you how to get the most out of life with your money. And now onto the episode.
- [00:13]
B
I'm going to guess that the majority of you watching this content or listening right now are good savers. That's why you are where you are. That's why you're listening to this content, thinking of ways to further optimize your finances. Some of you are thinking, my partner is a great spender. Okay, well, we're not talking about them right now. We're talking about you in this savers mindset. And one of the coolest things that we have right now at root going on is this community. It's called the root collective. And in this collective, there are certain prompts that I'll see that will catch my eye or James's eye. And that's how we come up with what we want to talk about today. And so today is a really interesting one. And this was prompted by Tommy C. Who says the following. For those who are great savers before retirement and are now retired, what are the little splurges that you now spring for that you wouldn't before retirement? And he has a couple in here that might make you think a little differently about how you want to save or potentially spend or give or X as we'll talk about today, James, when you're seeing someone, talk about, oh my gosh, what are some of these things that maybe I wouldn't normally do, but now that I'm retired, I'll consider doing what's coming to your head?
- [01:28]
A
Well, first thing is, number one, let's not wait until retirement to do some of these things. This isn't like a binary, don't do these things before you retire, do these things after you retire. But number two, I think that we've heard a lot of cool things, a lot of cool tips, if you want to call it that, spending strategies of. What are some examples that people of things people spent money on and they haven't regretted it because. Because no one wants to spend money and then regret it. Like, why did I buy that stupid thing? I never ended up liking it. What a waste of money. I feel dumb for doing it. But there's other things people spend money on and they say, I, that was one of the best things I've ever spent money on. And so I think that I, broadly speaking, categorize things into one of five buckets where we see these are like some pillars of good spending. And so we'll go over those. And then you have some personal things. I know. I have some personal things. I know. And I, you know, when we're talking to clients, I think one of the fun things is because our advice isn't just about money, money, money. It's really about how do you have a. How do you live better lives? How do you live more intentional lives? Like, these aren't things that are unique to age 65 and above. These are really principles that all of us can try to live better by and things that you and I personally try to live better by. So we'll share some of those stories as well.
- [02:40]
B
We certainly will. We talk about this phrase of goal post planning. One more year, one more bonus. Oh, yeah, just one more project. Then I'm going to. Officially now, if you're doing those things, some of you are like, it's because I don't know what I want to do in retirement. Others of you are like, you know, now that you've actually brought it up, I think you're right. And I think when I'm hearing you guys talk, it's resonating because I'm doing that, but I wasn't even aware. Am I doing that? So what we want to do today is really shed some light as to some of these ideas, which hopefully will make you think a little bit more. Intentional is the way I would say it. So if it's okay. Excuse me, James. I'd like to start with a quick story because it's a funny one and my clients like when I share it. So some of you guys already know this, but for those who don't, my dad loves his phone to an unhealthy degree. And I love spending quality time with my dad. My dad loves surfing. I'm not a huge surfer, but I will go out in with him in the water because it's when I get time with him. Now, he actually has his Apple watch, so sometimes he takes calls when we're in the water, which he knows he's not allowed to do. And I feel like I'm the parent when that occurs. But my brother and I were thinking for a long time, how do we get more quality time with our father? And we can't surf all the time if waves are up or it's windy or whatever it is. And so we bought a sauna to intentionally ensure that his phone or Apple watch would overheat. So he's forced to talk to us. Now some of you are thinking, well, that's silly. Why don't you just talk to your dad for dinner. And if it was that simple, we would do that. But we all know some of us have these family members where it's just more difficult to get them engaged, whether it be game night or you just have to take them out to dinner, because at home they're going to kind of be watching tv. So I am literally paying thousands of dollars along with my brother to just get quality time with my father. And that's something that I could wait to do until I quote, unquote, have millions of dollars retired. But I want the time now, while it's valuable. So we'll certainly get into, James, your stories. We'll get into what prompted today. But that's a quick story about just financially, why doing the right thing might not always actually lead to the right result.
- [04:46]
A
Well, I think that's a perfect example of the. The. Here's my five pillars. There's nothing magical about these as much as when I hear great stories like that, by the way, of what people spent money on that they feel really good about spending money on. The first pillar is experience. No one is ever upset that they spent money to buy an experience. And in this case, the experience was simply quality time with your dad. Now, that theoretically could have happened on the sofa. That could have happened surfing, that could have happened driving the car. But like you're saying, there's. There was a roadblock to that happening, and you needed to eliminate the roadblock, which was overheat the phone so it couldn't be used. But experiences, that's what travel is. That's what doing fun things is. That's what you're talking about. Number two is time. No one ever regrets spending money to buy their time back. I've used this example before. I do not like going to the grocery store. In fact, I hate going to the grocery store. And so we said, how do we spend a few bucks to get food delivered? Groceries delivered, I think it's ten dollars per order. So weekly it's ten bucks plus the tip that you leave. How many hours does that save of driving to the grocery store, going through the aisles? And it's just not a fun experience. And so that's a couple hours of time back that I now have. So, time, how do you spend money on time? The third is giving. No one's ever upset that they gifted money. This could be gifted to a charity, to church, to family, to friends, to whoever it is. You're not going to feel like that's a great thing to quote unquote spend money is giving, then you have health. No one's ever upset that they spend a lot of money on health. You tell a lot of stories about this, Ari, of getting the best doctor of the physical therapy, of the things that you do. And health is one of those things that. What's the saying? Healthy man has a thousand worries, a sick man has but one, or something like that. Until you don't have your health, you don't think about it. But health is what allows us of course, to enjoy everything else that we have. So spending money on your health, gym memberships, good food for you, eating good food, spending money to do things that makes you healthier is a great thing to spend money on. And then finally I'll just broadly talk call it environment. Like you want to live in a beautiful environment. You want whether that environment is aesthetically pleasing. And this is about people who like to decorate their home a certain way or do certain things for their home. This environment could be proximity to people you love or you care about. The environment could be proximity to things you enjoy doing. So I think those are categories that broadly speaking we should be spending money on. I like your example. For me, an example that comes to mind is not so much spending money, but spending time is. You mentioned goal post planning just a bit ago and it's a sense of I'm going to work one more year because I'm going to get one more bonus, or I have some more stock vesting, or it's one more year of Social Security benefits increasing, or it's one more year of max. There's so many good financial reasons we can use to justify that. And what we always point to is, hey, at some point you could take that to the extreme, keep working forever, keep maxing your 401k forever, keep getting bonuses forever. But you missed the whole point. You missed the movie like it's your life passed you by because you spent it working. Now I'm assuming you're working at a dead end job. Not dead end job, but a job that you don't like. A job that's not bringing you fun and fulfillment and the things that you love doing. So we try to help clients be very intentional with that of money has a purpose, a very important purpose. But at some point the money needs to not be the main thing. At some point you've crossed this threshold where there is enough that it can now support you doing the things that you actually want to do. And continuing to work to get even more of it is actually pulling you away from what you're actually trying to do, I face that too. Not because I'm trying to retire. I love what we get to do. This is one of my favorite things in the world. To me, it's not a goalpost planning of, okay, I'm going to stay at root for one more year. Two more years. It's man, I can get one more thing done. Two more things done, three more things done. And surfing is something I claim to love to do. I haven't done it in two and a half years. And I blame it on, okay, well, we have young kids and life's busy. And I blame it on, well, roots growing and that keeps me busy. The reality is I'm just not making time to be intentional with it. And Wednesdays is typically when I record YouTube videos, podcasts, etc. And I always tell myself, okay, I'm gonna record. And like, the, the, the reward for doing that is going to be, then I'll go surfing. Or then I'll go, I don't know, do something fun. I'll go do jiu jitsu, I'll go train. But I fall into that same trap that we encourage clients not to. Not of. Of. Oh, there's one more thing I can be productive with. There's one more thing I can check off the list. Look, I have three more hours till I gotta go home for family dinner. Like, look at all these things I can do. And I fall into this trap and it's. And, and just last week, for the first time in two and a half years, I finally said, you know what I'm going to commit to. Here's the things I need to get done today. The. My enough, like, if I get these three things done, which was filming a certain amount of videos, I am going to go surf. And I did it and I went surfing. And I was reflecting on the way back that as much as we tell clients to do this of don't goal post plan, don't. Don't keep pushing off the things you actually want to do. I personally am guilty of Now, I love work, and so it's not like I'm continuing to do something that I dislike doing. But there's a certain amount of intentionality that doesn't come from continuing to do the same old same thing. Like, how do you constantly reflect on what should I be spending money on? Like your story? What are the things I can do to create more meaningful experiences? What are the things I can do to improve. Spend money on, to improve my health, to buy back my time, to you know, those various things I talked about? The same thing happens with how do we spend our time? Not just how do we spend our money, but how do we spend our time? And sometimes it's thinking about the life that we want to live. It's thinking about what. What actually matters to us. And surfing is obviously not the only thing that matters. In fact, it's pretty low on the priority list of the things I actually care about. But in general, it is something that I do want to do. And it's this sense of just constantly reevaluating and reassessing, where are we and how can we spend our time, spend our money, spend our energy, spend our talents doing the things that bring us closer to the life that we want to live.
- [10:58]
B
Now, this is interesting. What was it about last week versus any other week in the last two and a half years that made you go, today is the day I'm going to give myself the reward?
- [11:08]
A
You know, I didn't think that. Well, I'm glad you just asked that because I hadn't thought about this until literally the second. An office mate came in this morning, said, guys, we. We work four blocks away from the ocean and we never get in the ocean. How ridiculous is that? How kind of like, how dumb are we that we live in this paradise and we don't actually utilize the paradise we live in? And so I said, okay, well, if I get. You're right, first and foremost. And number two, if I do this isn't to say, abandon all work and go, if I can get my enough done, if I can get my top three things that are my priorities for the day done, instead of just saying, okay, cool, there's always more things to do, so I'll just pour myself into that. Then I'm going to go do this other thing that is, I don't know, called a reward for getting those things done. So part of it was, I don't want to call it peer pressure, but having someone do this. And I think, in fact, that comment, Ari, that you started with from Tommy C. Mentioned that I believe if. Correct me if I'm wrong, but one of his experiences, one thing he spends money on, is doing something that friends can come along. And it's that sense of doing something with someone else makes it way easier to do and way more enjoyable to do.
- [12:18]
B
It's so fascinating because let's assume you go surfing every week and now you're happier at home, and now your wife goes, we're connecting more. I don't know what's happening. But I just feel it's different, and you're more present, and you can't quantify that on some spreadsheet as hard as you try. And there are financial advisors as nerdy as us who will try, but the reality is, you are not going to look back going, oh, my gosh, I'm so glad I did those 12 more projects. And, you know, I didn't need more time with my grandkids. Like, we've never heard anyone ever say that. And this is all we're doing all day. So I think when we're talking to clients, we will pride ourselves on being very transparent. We are not mean, but we are transparent. Because as you just saw, we. What prompted James to actually, right now, go surfing was someone came into the office and said, how dumb are we? And so some of you are working right now going, I'm 60. There's no way I could retire because I've never had health care outside of my employer, so surely I'm waiting till 65, because, like, why not? And then you'll see a video that might wake you up and go, hey, maybe that's not the deal. And then all of a sudden, you might have years back of prioritizing health or family or friends. And next week we'll talk about an even bigger story, actually, two weeks from now where there's an actual woman I spoke to who was really upset that she had $3 million. And I said, look, that's just. I don't want to be mean here. I. I just don't hear that every day. Why are you mad that you have $3 million? And she goes on to say that she didn't need 3 million, and now she can't hike to the degree she'd like because of the health impact from sitting at work. So we'll talk more about that in a few weeks. But the point here is, financially, there are things that you can only do when you know your plan allows for it. But you don't have to wait until this magic date to actually start doing some of these things. So I think it would be helpful to maybe give some of you guys a few ideas here. Then, James, if there's anything you want to add, please feel free. But this is straight from Tommy, once again in the community. These are just a couple of his ideas. And so he says, whenever I have an experience, he springs for the better and the closer seats. That might not be valuable to you, but that's what he likes to do. He talks about whenever he can. He gets prepaid Parking. So he's not worried about finding street or cheaper parking or having to walk a mile to the venue like James did when he was younger. At the baseball games, he says he'll upgrade to a large or even extra large coffee. Um, he says, when I'm on a cruise, we opt for excursions that have less people and they cost a little bit more. The experience has been 100% worth it. He tips more generously. And then the. Our favorite one that we read here is he said, when I buy experiences, I buy two extra tickets. This forces us to find two friends to go with us. If they pass back, great. And if not, I'm not worried. More fun with friends is worth the additional cost. So he goes on to say, what little things do you splurge on that makes you happy? I don't think those are little things. I think those are big things. And I want to tell Tommy, I'm proud of you because it's really hard unless you know, financially you're in a good spot to go. I'm going to buy two extra trickets. What if my friends don't actually join? So if there's anything you take away from today's episode, I hope you think about it and let this be. Maybe this episode, the person walking in to your office going, maybe today's the day to go surfing. Anything else, James, you want to add?
- [15:39]
A
No, I. That that would be it. Like, I encourage everyone listening what are. Just keep it super simple. How could you better spend your time and how could you better spend your money? My example was a time thing. Your example was a money thing. And now you're spending your money to get time. And I think that that's how do we live better lives? We look at those two things. Where are we spending money? How are we spending money? I have five things I'd like to fall in those categories again. Experiences, time giving, environment, our health. If it's checking one of those boxes, I'm going to feel good about it. So what is one little thing that we can do? What gym can you go sign up for? Not just sign up for a gym, you're probably never going to go. Can you sign up for a personal trainer to keep you accountable? Can you sign up and do so with a friend to keep you accountable, to make it fun. What are those things that you can begin doing? What are those experiences? To me, the simple experience was I'm going to go surfing for 30 minutes in the middle of the day because I got my enough done. What are those things that you can do. I'm really glad I did it. Whatever I would have gotten done in those 30 minutes pales in comparison to the fun I had being in the water, doing that, having fun with a friend. So just those little things. So what's one single thing you can do to stop and I'm guilty of this. You're actually really good about this. All right. I bet you're not actually guilty of this stuff. Like, you get in the routine. You get in a thing that's comfortable, and it's hard to kind of pull ourselves out of that until someone comes along and shows you those blind spots that by nature, by definition, you're not seeing in your own life and you have to go make a change to get out of it.
- [17:04]
B
Well, thank you. And we're going to put the thread of what Tommy said in the link below. So if you want to go comment on the exact post, which is the reason we're making this exact episode, go comment in there and let us know. And we will read those ideas on future episodes so you can check all of that out in the description whether you're on YouTube or on the podcast app.
- [17:25]
A
All right, thank you everyone for listening and we will see you all next time.
- [17:28]
B
See ya.
- [17:31]
A
The information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and are not guaranteed. Any mention of rates of return are historical and illustrative in nature and are not a guarantee of future returns. Past performance does not guarantee future performance.
- [17:51]
B
Viewers are encouraged to seek advice from a qualified tax, legal or investment advisor professional to determine whether any information presented may be suitable for their specific situation.
- [18:02]
A
Hey everyone, it's me again. For the disclaimer, please be smart about this. Before doing anything, please be sure to consult with your tax planner or financial planner. Nothing in this podcast should be construed as investment, tax, legal or other financial advice. It is for informational purposes only. Thank you for listening to another episode of the Ready for Retirement podcast. If you want to see how Root Financial can help you implement the techniques I discussed in this podcast, then go to rootfinancialpartners.com and click Start Here, where you can schedule a call with one of our advisors. We work with clients all over the country and we love the opportunity to spend with you about your goals and how we might be able to help. And please remember, nothing we discuss on this podcast is intended to serve as advice. You should always consult a financial legal or tax professional who's familiar with your unique circumstances before making any financial decisions.