When I was young, my dad told me that if I thought there was going to be a fight with someone to throw the first punch. Of course, when you are young every little challenge or bad comment seemed like a potential fight. Let’s just say it took me 20 years before I figured out that someone looking at me wrong or saying something sarcastic didn’t mean there would be a fight. As each year passed I got into fewer and fewer fights.
But after each fight (and there were a lot of them), the school principal would call my dad at work. My dad would ask that he speak with his son and his first words were always consistent:
“Did you win?”
My dad after each fight
What is winning in a situation like that? My opponent (the other kid) didn’t win. I’d get detention or worse so I didn’t win. Sometimes I’d get hurt so that’s not winning. Looking back on it now it’s very screwed up but that’s how it was for me in the 1960’s and 1970’s.
And that brings us to life in general. What is is winning at life? When you are in your death bed and someone asks you “Did you win?” what would your response be to that? The answer could be as simple as reviewing Maslow’s hierarchy of needs or you take a different view. Whichever way we answer that question it’s important to remember that only “we” can answer it.
Because the question is so broad in nature, I’m going to avoid answering the “winning at life” question. I’ll leave that question to the psychologists or philosophers to debate. We’ll focus this article on winning financially, which is still a tough question to answer.
My Financial Life
Everyone should define winning based on their own life and not compared to others. I don’t care what others think about my financial life because it’s mine. What you won’t ever see on my list is fancy cars, big home, or a large boat to prove I’m winning financially. That might be somebody else’s description of winning but it’s not how I define it.
I’ve done plenty of losing financially and there are articles on this blog explaining some of my failures. But I own them and I don’t run from them. Now, I’m focused on winning the financial war even though I’ve lost many early battles.
Here are a few reasons I perceive myself as winning in my financial life (in no specific order):
- Two great kids that are sustaining themselves financially
- Paid for kids college without debt for either them or us
- We should have a net worth of $1,000,000 in 2021
- My investment portfolio will be around $600,000 this year
- We should be completely debt free (including mortgage) in 2021
- My job has a fully funded pension and retiree healthcare
There are so many ways someone could win. Here are some things that are important but didn’t make the list: (1) I’m relatively healthy, which will payoff financially later, (2) I’m retiring at 62, and (3) my spouse and I are financially aligned. Having Mrs. TLR and I on the same financial page is an enabling me/us to win.
So, Am I Winning (Financially)?
In my opinion, anyone that is improving their financial situation year over year is winning financially. This is something I’ve been doing the last 10 years. Each year I’ve got more savings and less debt. Just keep plugging away at improving financially and suddenly retirement is possible. That is what winning is all about … the constant and measurable improvement in your financial condition.
But let’s take my list above and dig a little deeper. And remember, there is always someone in a better financial situation than yourself. If I were losing then I’d say it, therefore, I’m fine letting you know my wins too.
Net Worth
Including the home, my net worth next year will exceed $1,000,000 and this would put me into the top 10% of Americans. Given that my net worth was only $155,000 10 years ago (at 48 years old) I’ll consider that winning. Was I winning 10 years ago? Of course not but that’s an important point. Nobody’s fate is sealed if you are willing to make a change. I kept making progress each year and will finally cross the $1,000,000 mark next year. Winning!
Most of my net worth is the investment portfolio, which is currently valued at around $575,000. This puts us in the top 10-15% of people between 50-59 years old that has over $500,000 invested. Winning!
Kids and College
My kids graduated college and that is a big win for most households. What I’m most happy about is that neither us or my kids have debt due to their college experience. Considering that nearly 70% of kids leave college with debt, I consider that important. Winning!
Also, my kids have both graduated college and are now paying their own expenses. Why do I consider this important? Because nearly 60% of students are still being supported in some way by their parents. My kids are no longer dependent on me so I can divert those funds toward my retirement goals. Winning!
Debt
Debt is draining the financial lives out of most American’s. Over 80% carry debt and I’m betting most of the other 20% can’t get credit. Next year, I’ll be debt-free which means mortgage, cars, and credit cards will be zero.
I’d bet that hitting $1,000,000 in net worth won’t probably have much emotional impact on me. But a mortgage-free house and could make a grown man cry with joy. Winning!
Pension & Retiree Healthcare
We all have choice of where we work and I’ve chosen to stay employed at a place that offers a fully funded pension and retiree healthcare. I’ll likely receive a pension amounting to about $70,000 when I turn 62. And my healthcare will remain unchanged until I turn 65. At 65, I’ll receive $5,000 per year to purchase health insurance to supplement Medicare.
My research shows only about 5% of companies offer both a pension and retiree healthcare. Of course, many pensions are significantly underfunded and most companies are actually taking away retiree health insurance too. Winning!
Conclusion
There is no shame in saying it but most everyone struggles to meet their financial goals. If you read this blog regularly then you know I’m been one of them. I’m a pretty contrarian person so rarely do I compare myself to others financially.
That doesn’t mean I don’t look at where others are at financially. Let’s face it, American’s retirement futures are in trouble so comparing myself isn’t a real stretch. The old cliche about being your best self truly makes sense when it comes to retirement planning.
If you give 100 people the exact same job with the exact pay and follow them for 40 years, we’d see most everyone follow different paths. A handful would be successful but most would probably struggle. American’s like to spend, buy big homes and cars, and go on expensive vacations.
To this day, I remember taking my wife and kids on vacation to Washington D.C. They entire trip cost us about $5,000, which was a lot of money to us. We asked our kids a simple question, do you want to go on a vacation like this every year or would you rather go to college. Even at 14 and 11 years old, they knew the best course of action was college.
Unfortunately, most people never make those kinds of decisions and they become another American retirement statistic. Winning at life financially means I’m meeting my goals to get myself retired at 62. If I can do that then I’m winning.
Be the best financial self you can be starting now and never judge your success by comparing yourself to others. Sure, I used some comparative retirement statistics but those were to help illustrate some points. I’m winning because I’m improving my financial condition every year.
Thanks for reading!
Mr. TLR