Today, at age 43, I decided to get serious about my retirement planning, again. So I decided to look it up online. I Googled Money in your 40s. Not surprisingly tons of articles came up. Google had about 38 million to pop up within .42seconds. I had to pass by any articles that assumed I was well on my way to retirement and find something that talked about starting and square one.
The one that caught my eye “40 with No Savings? How to Retire a Millionaire | DaveRamsey.com”. I thought to myself. I’ve heard of this guy. He should definitely know what he’s talking about. So, click, and off I go to make my million. The beginning starts off by discussing how close I am to retirement (eye roll). Then he moves on to talk about the fact that I am not the only one in my predicament. Pheww. I actually feel a little less like a complete failure after reading that. “OK Dave, you have my attention, what can I do?”
According to Dave, with just $800 a month which is just “a little less than than 20% of the average $50,000 income.” Oh wait Dave, did I forget to mention that I am a black female?
That $50,000 seems a bit high for my specific classification. Especially if it is coming from a job. Now let me give a caveat to that statement, its not that I personally did not feel I could relate to the statement but I immediately thought of friends and family in my same category who are not making that amount of money and thought, this article leaves out a significant segment of Americans. And those who are not in that income bracket well it seems as though getting to that million is near impossible. The article did go on to say that you could delay retirement to age 67 and only contribute $650 a month. (Another eye roll).
I don’t blame Dave and I know the article was not targeted towards black females. He just wanted to take a large cross-section of the mass population of the US to give them hope right? And my current reflection is not to slam Dave’s article, I just found that as I read the article there was a cross-section that was missed and I hope to be a resource for them.
So what else did Dave have to say? Well, he went on to discuss the need to reduce debt and have a 3-6 month emergency fund stashed away. You know I have always heard about an emergency fund. I can’t ever seem to get one together before an emergency comes along and depletes it. (In all fairness some of my emergencies probably weren’t actually that at all). Annnywho…
Next up, budget. That has always been a struggle as well. I know how to do it and I have written down my expenses on a post it before. Thankfully my paycheck covers it on a monthly basis. But I have never truly budgeted correctly. I recently met a man at an investment conference. He told me that he had pulled himself out of debt twice and the keys were to have a goal and to budget EVERYTHING. I would venture a guess that most people who are like myself have a form of budgeting that covers the basics or at least helps you to get to your next paycheck without being overly negative. But the truth of the matter is that is simply not good enough anymore. Not if I want a million in retirement and the option to live comfortably without having to work until I die.
Finally, Dave says we need to have a vehicle for our savings to grow (I’m paraphrasing). Anyway, this is where I am not sure that I agree with him completely. This is just based on my recent education in the investing world and the books I have been reading. But Dave recommends that we should find an investing professional and put our money in a mutual fund. Well, if you read about mutual funds they are not all champagne and caviar. They have their downsides. And we (US economy) are ripe for a market downturn within the next few years which could mean that the money you begin to put in could easily be lost quickly. I met a couple not long ago and we began talking about their financial experiences. They had taken the time to invest with mutual funds and financial advisers and during the stock market crash of 2008, they lost over half their money. They felt scammed because it was explained to them that it was just the way the cookie crumbles.
Now with that being said. If you are not interested in learning about finances and the best way to invest/save them, a financial advisor/planner is the best option. But I would encourage you to take more time to read and learn about money, banking, stocks, etc. Not only is it easier than you think to understand some of the facts are quite fascinating.
So what did I learn from Dave Ramsey today:
- I am not alone in my current financial state and it’s not too late to change it.
- The vast majority of financial writers are not addressing black women (I inferred this one)
- Budgeting is key to assuring that I have my finances under control.
- Don’t use banks to build your wealth Find a place for your money that will produce a high rate of return.
Thanks Dave. Now that we all know there is hope let’s go out and build for ourselves. It’s not impossible even if you don’t fit in with the cross-section.