Don’t Horde Your Money Until Retirement
This common mistakes prevent people from getting more out of life
Saving for retirement is a good thing. Investing your money and watching the returns compound over time is also a good thing.
Investing and minimal expenses are two incredible vehicles that will speed up your path to retirement. Then, once you retire, you can live off the money and spend it from time to time.
The last part is where problems emerge. Now, there is a fine difference between buying your way to experiences versus the latest Gucci fashion items.
But you shouldn’t delay the most exciting parts of your life.
One of my life goals is to run in all of the Marathon Majors (New York, Boston, Chicago, Berlin, London, and Tokyo).
Each marathon has registration fees, and the travel expenses aren’t going to be cheap either. I am a New Yorker which makes the first two on the list easier on the budget. Chicago is the first one on the list that will require a bit more traveling expenses, and the final three…those will definitely get pricey.
I’m able to think about running all 6 of those marathon majors because I’m fast enough to run a qualifying time and I’ve been prudent with my money. Any money I make goes straight into Fidelity, and I’ve seen the power of compounding unfold in my portfolio.
This brings a dilemma many investors can relate to.
You know that your portfolio needs time to compound. The more time you stay in the market, the more your dividend payments will grow because of your personal investments, dividend reinvestments, and dividend payment hikes. You can apply the same concept to other investments such as growth stocks and real estate.
Touching any of that money is seen as taboo for people seeking early retirement. Investors with a $10K portfolio and $300 in their checking account will act as if they only have $300 to spend.
I make so few purchases for myself than I can remember the purchases I made in a given year. I’ll wear the same clothing for years.
Which brings us to the Marathon Majors…a big goal that requires considerable money primarily for the traveling expenses.
I’ve considered running the Marathon Majors in the states quickly since the traveling expenses are more affordable, and then run the 3 international marathons in my 30s or 40s so my portfolio would have additional time to compound.
I then came across an article on Runner’s World detailing how a runner ran a marathon in every country within a 2 year stretch.
The feat is legendary, but traveling to every country on the planet and running marathons in each of them costs a pretty penny. Runner’s World pegged it at $1.29M.
Regardless of whether you’re a runner or not, there’s an important lesson in this story.
Nick Butter, the guy who ran all of those marathons, got the idea from his friend Kevin Webber who he met at the 2015 Marathon des Sables. At the time, Webber was battling prostate cancer. His message for a younger Butter was to not wait for the diagnosis before you decide to do the things you want to do.
We all have an idea of how we want life to go. We get into our 80s, 90s, or even live beyond 100. We raise great families and then spend quality time with our grandchildren. Along the way we get to do a bunch of fun stuff and life continues to stay exciting. Never a dull moment.
Are you prepared for a curveball?
Have you accomplished your key life goals or been to the places you want to go?
This is why we invest. Investing builds up our wealth, and we can do more of these things later. But sometimes later never comes because we keep pushing life’s most exciting adventures to the side.
Set a closer target. I could easily save up so I can run those events in my 30s and 40s.
My new goal is to run in all of those events before I turn 30. My close proximity to the NYC and Boston Marathons helps, and then that brings it down to 4 remaining marathons. 1 of those marathon every other year it all it would take to run in all of them before turning 30.
It will cost considerable money, but big goals like these get you tighter on your finances and will inspire you to increase your income…whether it be asking for a raise or starting a side hustle.
I’d rather spend the money on those experiences early on than have them hang on my shoulders for the rest of my life.
Regardless of how much money your plan requires, set a closer deadline. You’ll work harder for it, and when you get your goal accomplished or have the big experience, you’ll set your eyes on more.
Running the 6 marathon majors is currently the big life goal. Once I achieve that goal and let compounding work its magic, I might be in a financial position where I decide to run all 6 marathon majors in 1 year. It’s not a desire right now, and doing it now would set me further away from financial freedom than I’d like, but it will become an option with enough investing over time.
Until then, I’m going to invest most of my money, but I’m not afraid to spend some of it in the pursuit of a big life goal from time to time.