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Don't Save for Retirement
Why People Under the Age of 40 Shouldn't Save for Retirement. . .
This is an article on why young people (or people under 40 for the matter), shouldn't bother to save for retirement. Contrary to popular wisdom, I have concluded that for my generation spending your time, money, and mental energy preparing for retirement yields returns that are far too low at a risk that is far too great. Time is precious and you're only young once. Long term mental and monetary investment towards what is a declining asset or idea can be one of the biggest mistakes a person can make in their life. If you're under 40, saving for retirement will hurt you rather than help you. It's a waste. Why?
To begin with there's an issue with feasibility. You're pressured to save money for retirement, yet with such a low paying job and perhaps student loan debts, does it make any sense to put money locked away for 40 years when you're struggling in the present? Take a moment to think, putting money aside for retirement in this situation could have serious consequences for your health. For example, if you decide to designate 10% of your income towards retirement, could that money not have been used for better and more immediate purposes? If putting money aside for retirement means having nothing but a diet or Ramen noodles, please consider that spending the money on more nutritious foods is a much better investment. If you can't retain your health than you can relinquish all hope of one day generating a better income.
The truth of the matter is by saving for retirement, you're asking to make serious sacrifices today for an ideal that's at best uncertain in the future. Often you’re investing in an illiquid asset – meaning you can’t withdraw the money when needed in case of emergencies. Please alleviate any guilt you may feel by not saving for retirement. In fact, go out and buy yourself a beer! I know society pressurizes you to save for retirement, but for the sake of your own sanity work diligently to avoid the peer pressure. Your father is most likely lecturing you right now that should save for retirement - well I'm here to mathematically tell you that you shouldn't. Don't listen to dad - dad rarely knows best.
Live your life and get rid of the guilt. If you need money for rent, pay rent. If you need money to get a car, get a car. If you need money for an Internet service provider, get an Internet service provider. The money to be put aside for retirement can definitely wait.
Even if you did have the money, you wouldn't want to invest towards retirement anyways. This is because we have a "retirement bubble" coming up. Yes, that's right; those pesky boomers are screwing us up again. . . How? Back in the day, people didn't socket their retirement into the stock market. They had pensions, perhaps they had a self-sustainable small farm ready for retirement, maybe their family members took care of them, and many worked until they died, etc. However today, we have a mass generation of baby boomers in the Western world who have put their retirement assets in various retirement financial gimmicks that can be classified as low yield mutual funds, stocks, and bond portfolios. Essentially this has inflated the stock market. Understand that before the baby boomers, only the rich played the stock market, it was a rich man's poker game. Today, everyone with a retirement savings vehicle is playing the stock market. What do you suppose will happen to the stock market once the baby boomers start retiring on mass and selling off their assets? Stock prices will go down. So a young person putting money aside towards retirement today is buying at the peak of the stock market. Why would you do that when in 10-20 years you could buy the same stocks at bargain low prices? Doesn't make much sense, again, don't listen to dad. Dad only wants you to throw money towards retirement because it helps to fuel the Ponzi scheme and thus helps with his retirement.
Another issue at hand is that many governments from around the Western world have too many "unfunded liabilities". This is code word for they have promised the baby boomers all kinds of goodies for retirement, yet they don't have the tax revenues available to make due on these promises. So where exactly can they get the funds needed? This can be done by confiscating your retirement savings plans and replacing them with I.O.U's, which essentially means your government, is stealing your retirement savings, giving them to the baby boomers, and replacing them with a government loan where they promise to pay you back the same amount once you retire. Of course, they have no intention of paying you back 30 years later. Before you call be a conspiracy theorist, understand all of this has happened before numerous times throughout history in many countries. They did it in Argentina, they did it in Bolivia, and they're presently doing it in Greece. . . With that in mind, socketing your money away in a government designed retirement scheme may not be the most secure place to park your money. . .
If you actually do have some money aside to invest, I recommend using it towards your health first and foremost (the government can't tax or confiscate a gym membership). In second place would be physical assets such as gold, silver, liquor, beans, etc. Third place would go towards education. Seems counter-intuitive to many of the articles I've written, but this depends on how we define education. Don't get an overpriced college degree and put yourself into crippling debt. I'm not going to be one of those jerks that will tell you to take algebra lessons and hire a tutor in order to become a mechanical engineer. The truth of the matter is if you have zero aptitude in the subject matter you shouldn’t bother. If you're great at math, go ahead. Assuming your good at math you’ll easily calculate that being self-taught, while hiring a private tutor, has lower costs than attending a college that might have hundreds per classroom. A true testament as to how ridiculous the college bubble has become. For the rest of us mere mortals, here's a hint - Rosetta Stone. Learn a language; in particular, learn the language of our future overseers - Mandarin. At a minimum that will keep you busy for a decade. In the world of investing a distant fourth would be; dare I say it, real estate. However, exercise extreme caution in this area. I would go on to say it should only be used if you can put a 50% down payment or greater in a given property, which would exclude most of us. If you must diversify into real estate, but lack the funds to feasibly chip in a 50% down on a mortgage, you can always do as I have and put some money in an R.E.I.T (real estate income trust).
-Donovan D. Westhaver