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Friday, December 23, 2016

A New Year's Resolution

This resolution is for your mid sixties self. If you haven't met him or her there are aps out there whereby you can take a picture of yourself and age it. If you have problems saving then do it and meet your future self. It helps some people.

Now I know many people don't like to think about getting older. Get over it. I'm older and semi retired and it's great. Admittedly there are days where it is harder to get up in the morning and I get tired earlier in the evening. But balanced against this is the wisdom I've gained over the years ;) I don't do nearly as many stupid things as in my youth.

Anyways what about the resolution? It is simple. Save at least 15% of your paycheck towards your retirement. Not for a new pick up truck, not for an exotic vacation but towards your retirement. Have it taken out of your paycheck and learn to live on what is left.

Ok, so now you're protesting. You can't live the life style you are accustomed to if you are putting aside 15%. First off consider that for some (many?) of you it isn't 15% less income because you get a tax break if using a 401(k) or an IRA and secondly some of you have a company match. So, to get at the 15% isn't such a burden.

But if it is still a stretch take a hard look at your lifestyle. Think about functionality versus other motives for what you spend on. Is that car for getting from point A to point B or is it to send a message that you hope gets people to think you are making the big bucks.

Thorsten Veblen 

wrote a famous book, The Theory of the Leisure Class, in 1899 in which he introduced the concept of "conspicuous consumption". The idea was that people emulate the economic class above them. As such we buy many things not for their use but for the image they project. Consider that we buy silverware because it is similar to what the wealthy use not for its functionality.

Granted that Veblen may not be the easiest to relate to in today's world. Instead you may want to check out

  Money Mustache.

IMHO he is the best current writer on frugality and the early retirement movement. If he can't inspire you to live a more moderate life style then you are uninspirable.

Bottom line: Resolve to save at least 15% of income in 2017. Your future self will thank you!

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