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Finance your Retirement by Building Side Incomes
Trade Work for Play
Don't Think Of It As Retirement
Retirement kills men.
I've seen it happen within my own family. My grandfather's self-image was entirely bound up in his work as a welder for Commonwealth Edison. The utility forced his retirement while he was hospitalized for a work-related injury that caused a cancer in his pleural cavity. As soon as he got the news, he quit fighting the cancer.
He gave up on life and took about a year to die slowly and horribly in deep depression. His work was his life, it was the biggest part of who he was. Without being a working man, he couldn't look at himself with pride in the morning. It happens to a great many men who have a work ethic.
Women are socialized differently and may do better with retirement as such. They can look at themselves positively for their relationships, their housecleaning, their volunteer activities, a lot of the important things they did in life before retirement weren't paid anyway no matter how valuable they were to those around them and society at large. Men are still taught to measure themselves by their accomplishments.
Women too are starting to see themselves as "somebody" based on what they do for a living. They're also running into the same health problems men do combined with a host of others that they're subject to from their own stresses and the double lifestyle many women still pursue -- trying to be a housewife full time and keep up with things as well as their stay at home moms did while also keeping a job or a career that takes major commitment.
So thinking of it as retirement is a big part of the problem in itself.
It's a big change in status. For many people who were used to working higher end jobs, it's also a huge drop in income even if they had retirement funds and 401k savings and investments. Most of all it winds up cutting off their social lives.
There's still a lot of ageism in hiring too, about the point I turned 45 was when I started to run into it and find out that in almost anything, companies will hire someone younger and more gullible over someone mature enough to stand up to typical office bullying and unfair situations. A lot of jobs aren't what they're cracked up to be in the first place.
So the big question about retirement is just exactly what that means? Do you go down this deadly path of being swept out of the way, treated as dependent, resented for living on a pension by people who think everyone should be a wage earner? Or use that as the springboard for a completely different life?.
Cats sleep and play all day...
This is the heart of retirement planning.
Careers of any kind take goal setting and working toward goals. That's a young attitude. When you're a kid you're always looking ahead. There's Christmas to come, birthdays to come, tests to dread, events to look forward to, friends to see at school in the fall and summers off to enjoy yourself goofing off doing whatever you want.
Retirement can become an endless summer vacation if that's what grabs you. Some people adapt well to retirement as such, treating it as the earned reward of a lifetime of hard work. If that's the case, then planning for it means defining pretty much what you're going to do over that long endless summer -- knowing what you want to do with your time and where you'll hang out and meet people.
Jobs provide contact with new people offline. Without a job, retirees sometimes get isolated and not only lost the status of the occupation but any chance to meet new people and make friends. Now that there's time for friendships and activities, they don't know where to start.
Friends are also an important resource for how to live on less money if you go for that traditional retirement option. It's good to know where you want to live -- and in some way find a way of life that is better than what you're leaving behind.
The new place should be more comfortable, more beautiful, have advantages that make up for any disadvantages.
A number of retirees live in RVs. Some of them, a great many actually, take advantage of the tax laws regarding antique dealers and take up antiques dealing. This makes the entire vehicle a business vehicle and covers a lot of their trip expenses. They tour the continent buying and selling antiques, get into the business, enjoy it and transport these goods in their homes.
It's a completely different way of life than living in a house and mowing the lawn. There are different social opportunities -- campgrounds are a great way to meet people and so is antiques dealing in itself, it's a good topic of conversation. You have some interesting treasures to show your new casual acquaintances.
Showing off is something people need to do. Everyone needs some appreciation in life -- and you don't need to be a great artist or crafter in order to recognize fine craftsmanship, buy low and sell high. Antique dealing takes a bit of interest, some study, a fondness for interesting furnishings and maybe a particular niche, a specialty in your favorite things. Whether it's Depression glass or Colonial cabinetry, specializing is a good way to regain some of the status that you used to have as a manager or a salesperson or foreman.
The RV lifestyle also lends itself to being a writer. You do need to have mobile Internet access and a permanent post office box for an address, but it means you can migrate with the weather and literally have that endless summer by driving to areas at their peak times. Avoid the South during summer when it's too nasty, head up more toward the middle or cooler areas or the coasts. Avoid Hurricane Season by driving inland. Avoid the Midwest during tornado season.
One of the big advantages of a smaller place to live is that you've got a lot less cleaning up to do. This may not matter much to some abled people, but if you've got any disabilities it can trade apparent luxury for real luxury.
Another advantage to a smaller living space, be it an RV or a smaller house or apartment, is that it's much cheaper to furnish it well. You can shift your priorities from "a lot of stuff" to "A few well chosen things, the best of everything." I'm a great believer in luxury. I don't think there's anything wrong with luxury.
Real luxuries bring happiness. They are enjoyable every time you see them. In the furnishings of where you live, they also reinforce identity. They remind you who you are.
My room, wherever I live, has my Good Framed Art Wall with my small and growing fine art collection. I get a new painting every year or so from a good artist. The other walls are Sketch Walls filled with my latest drawings. No one comes into my room without instantly being aware that I'm an artist. It hits them right in the eyes. I've been puttering at it long enough that my Sketch Wall looks about as good as some of the fine art on my Good Framed Art Wall.
So that leads to another point besides antique dealing. What you love to do is probably a viable career for someone else. It's a new self-definition. "Bob the Antique Dealer" is not "Bob's retired, his health gave out" or "Bob retired, he just plays golf all day."
If Bob retired and plays golf all day every day, Bob's going to get to be one heck of a good golfer with that much practice and could do anything from become a sports writer to a golf pro or teacher. The RV lifestyle would mean he could tour the circuit, go to all of the important matches, then writing them up for magazines and newspapers can be a source of income. Or studying those pros' techniques and teaching golf to new hobbyists.
The things you did for fun all along are almost all things that have the potential for decent income in one way or another.
What that takes is learning how to live outside a hierarchy.
No one is going to tell you when to get up, tell you when to go to lunch, schedule a fifteen minute break and tell you when you have to work a bit of overtime before going home. That's it. You are the boss. You are in charge of you, or you're in a partnership because you're married.
If you're married, work on your goals and ask your wife to work on hers. Discuss them. Discuss the good things about them and what it would take to get there and make them happen.
What "Retirement" really means is a change in life, a passage that changes social identity, habits, income, everything. It will be stressful, but "eustress" or happy stress like getting married to someone you love or getting the job you always wanted is a lot easier on health and a lot easier on the people around you.
Men especially, plan for this because I've heard so many older women complain about husbands now at home who get under their feet and do nothing all day but complain. A depressed man who's bored and doing nothing is going to drive his wife crazy by that, she loses all privacy because you're home all the time and you have nothing new to contribute for "What did you do today?"
So finding something to do that's worth hanging "Bob is..." and setting long term goals within it, looking forward to the future, is a way to wind up as "Bob's ninety and he's running around like a kid, he does twice as much as a 20 year old, I wish I could see how he does it."
He does it because he's happy and he's not actually Retired in the sense of being used up, thrown away, done with life, finished, washed up.
That self definition is a killer even if it's cushioned with the kind of very good money that the utility paid my grandfather at his retirement after 46 years as a Commonwealth Edison welder.
Wildflowers and Wild Ideas
Elders in Society
Even if you were a middle class white Protestant male, the top of the social heap by all the conservative standards, there comes a point in life where you fall out of that category and become a Minority. Old people are treated poorly in America. They're not respected, they're shoved aside, their opinions trivialized, their living conditions often horrific and they get laughed at for how they look.
The loss of status is a huge killer in itself, I think. Self-definition comes from work and as soon as your self definition becomes "Bob used to be a welder" then it implies "Bob is nothing now and on his way to the scrap heap. He's obsolete like last year's computer."
Turn that inside out.
"Bob's an art student. He used his 401k to fund a new degree and now he's studying at a college of design, he's going to be a fashion illustrator. He always liked drawing girls and now he's going to draw them for a living." Yay cool.
That has a lot more respect.
It is a knockdown from "manager" or "welder" and loses all seniority -- but it restores social perception of youth. If you are putting your time into a course, then you're planning for a real future. All of a sudden "has-been" becomes "gonna-be." So take that into account when changing gears. You're going back to start but your resources are a whole lot better than the 19 year old who is just starting out.
You know what you're doing.
You understand what education's for and the course you paid for out of pocket is probably one that's going to land a specific career doing something you've always thought would rock as a way of life. You're mature enough to stop and think about what your working conditions are going to be, what income professionals in that job get, how you want to balance cost of living versus goals.
Instead of "I used to be rich" and "I used to have this great big house and two cars and this stuff" it's "I've streamlined my life to get where I'm going." People don't mind sacrificing for things they want.
The trick is to have a goal at all, to have something you want. To be able to make a plan for one year, two years, five years down the line where you want to be.
Education and retraining for a new career can be a great option. Older students, returning adults, statistically get insanely better grades. They're not shuffling through an imposed social obligation, they set out to get that goal and learn what that course is about. It's in their niche.
If you're looking at endless summer vacation retirement, as in "I don't want to have to waste one more day working in my life" then consider community college classes as entertainment and ways of socializing.
You can get started in a lot of good hobbies with inexpensive classes at local colleges. If you don't have a career goal, auditing at a local college is often a lot cheaper than taking the course for credit. If you took Art History just for fun and because you're interested in antique dealing as self employment, you don't need to impress anyone with an Art History degree so much as to be able to recognize an American Impressionist when you luck and see one at a yard sale.
Classes in anthropology, psychology, the sciences, the arts are all entertainment that stretches your mind. They give a short term goal to the day. They also do erode that self definition of "does nothing, just a burden on society."
You may want to stand up for your right to relax and get lazy. More power to you if you do -- but if that's your direction then take the unscheduledness of retirement as one of its perks and defend it in rants. Focus on the positive aspect of it and when people start putting you down for it, start dispensing elder wisdom. You have a lot more life experience than kids who are gullible and taken advantage of in the workplace or bad relationships.
Ranting and writing are good ways to stay young and sane. They cost nothing since email is so cheap and you can go online to places like HubPages to write and get a following. This will get appreciation. No matter what your slant, you can express yourself when you have the time to do so and with AdSense and other trickle incomes, supplement your retirement income.
Then when people ask what you do, tell them you're a writer.
A lot of people have a dream already. They plan to retire and write a novel. They have a lifetime of experience and plan to write a memoir. They already know "Someday I will have time to paint" or "When I've saved up for retirement I'm going to take off and just spend the rest of my life traveling."
Do that last and write about the places you go, post pics online and your trickle income from travel will start mounting up. Anything interesting that you find fun enough to do is worth writing about because someone else is interested in reading about it.
So the main point of this Hub is that financing your retirement is not just a matter of saving up for it. Savings are finite. Start using them and you will see the amount slowly keep dropping as you actually use it up. health crises can swallow it all fast -- money is not security. What is real security is cutting expenses and choosing a life that has a goal, where your sacrifices have some meaning and you have something to look forward to.
Whether it's looking forward to seeing Florida again after hurricane season or looking forward to doing anthropology digs, whether you are going to become a painter or going to become a philosopher, there are forgotten dreams and things you put aside for good reasons when you were younger. You made sacrifices for kids and they became grownups. You did things for the family, for the community, you worked hard and held your head up.
That respect is gone without some new self-definition that rejects the idea of "has-been" in favor of goals focused on happiness more than money-achievement. Happiness is personal. You know what you love doing best. You know what and who you care about. You know what your comfort zone is for stress.
Some directions you can take -- activism.
If you get angry the first time you're slighted and looked down on, speak up about it. Start getting involved in community programs and activist organizations for elders' rights. If you don't free yourself, no one's going to step up to do it for you. So if you're not interested in a money-career and you prefer a comfort level where there's an organization and a lot of clear cut short term goals and some deadlines -- then organized activism is a good choice because you will win some. You'll see things happen like better access to buildings and care.
Why not politics directly? You could try running for local office, either raising grassroots funds or spending a large retirement savings on campaigning. That takes involvement with political organizations but when you have the time to devote to it as a full time activity, that is valuable. You'll meet people who know how that works and be able to learn the ropes. It becomes another goal -- one that fits well with the more positive views of elders in society.
Volunteer work does not necessarily mean going out to work for a charity. It can mean taking up science or politics. It means choosing a goal that matters to you from the gut and then having some structure and social contacts and a new life with a lot of friends who share your cause.
If you always liked science, archaeology and paleontology, biology and astronomy all depend on educated laymen as volunteers who do the immense manpower needed for real new research. Sometimes volunteers are the ones who make important discoveries because they had twelve hours to spend on the dig while the full time scientist was too busy grant writing to keep the project alive.
Happiness as a goal
Changing your Life
It's hard, especially for people who have sacrificed a lot for a work ethic, to shift gears toward happiness as a goal. To accept that going fishing (and maybe becoming a fishing guide around your favorite stream) isn't being lazy and worthless. If you've been that self disciplined all along then it can be an enormous mental block and turn into the kind of boredom kids get one week after school's out when they don't know what to do on Monday morning.
So many people are so used to their lives being ordered by other people that the prospect of retirement is terrifying. You have to make your own decisions and your basis for them in retirement is just to please yourself and get on well with your partner if married. That's it. There isn't this overwhelming pressure to do things for other people.
If you get your emotional rewards from doing good for other people, then go for classical volunteer work. While you still have some strength and health, while you still have any reserves at all, you can help out people who have less. Poverty abounds. Any time spent volunteering at soup kitchens or SCORE (Service Corps of Retired Executives) or hospitals means a fortune to the people you're helping, who often have nowhere to turn and are in dire life-threatening situations.
Go from the heart if you're doing that. Go for what matters most to you. Your passionate empathy has to have a focus to be its most effective, whether that's for helping out rape victims or getting some food into hardworking people who are starving. This can make a big difference socially and it will make you happy.
It doesn't devalue the gift if it makes you happy to give it.
It doesn't mean any less to that guy who got fed or the kid you advised about how to start a company and get a bank loan that you enjoy the process. That's the key to anything you do in retirement.
Don't think about it just in terms of money. Think about it in terms of the consequences in real life day to day comforts, luxuries, pleasures and time based on exactly who you are as an individual. Suit yourself. This is the point of freedom for so many people, but coming out of a situation full of obligations and often imposed limits or bad situations into freedom is difficult. It takes some retraining in itself.
One place to start is to take a year off to just travel, think about life, consider relocating and consider what you want to do now with your life. Own your life. It's yours. Once you're out of the rat race there's no one who can tell you what to do any more -- so in freedom there is risk and responsibility. You have to decide how to live, on every level those decisions can't just be defaulted to other people unless you wind up a victim of a controlling personality.
Happiness is best attained through knowing who you are and what you want. Writing it down is good. Planning, listing, journaling, put it into words and articulate it. That makes it easier to remember your goals and easier to remember that you have some.
"Bob's a traveler. That's all he does, he writes about his trips and goes all over the country talking to people." Sounds a lot better than Bob the Has-Been. Sometimes it's all in how you describe yourself to yourself to change how you view the world, yourself and everyone else. Don't buy into the idea that your life is over.
Break Negative Stereotypes, Keep Positive Ones
Stereotypes, Expectations, Ideas and Redefinitions
Older people are wise. This is a positive stereotype. It's based on something real -- you have a lot of experience in life. If you run into a bad supervisor you have done so before and know some ways to deal with the situation that a naive twenty year old wouldn't think of. You know a lot of things in life that you probably take for granted as nothing.
Until you meet some 18 year old boy who doesn't know the first thing about how to grocery shop and gets seriously confused if he has to clean his room. He can handle each of the tasks but doesn't know how to plan them, and the grocery trip freezes him because he doesn't know what to get. Or he just gets hot dogs and chocolate and soda, forgetting the ketchup. Or you meet some young woman who doesn't know how to apply for a job because she never did, or what to do if a light switch doesn't work.
I found out that even though I missed shop because I was too interested in taking art, I wasn't missing much. The shop projects tended to be bird houses and lamps, hobby projects rather than practical home repair stuff that anyone needs to know if they want to actually own a house and not let it fall into a ruin. Like how to fix the toilet and put in a new plunger. Things like that I had to learn on my own, so do most people.
You get it from people at the hardware store, friends who've been doing it longer, older people when you're young. If you want to know about effective frugal living, remember the stories from people who survived the Great Depression. There are a lot of things that anyone can do to not only make ends meet but make them meet more comfortably.
The trick is to apply them without that turning into shame about poverty. There's a huge emphasis in American society on social status by wealth. It's resulted in ludicrous ripoffs, in Madoffs, in bank irresponsibility chasing the quick buck, in short term self-defeating policies from large companies to large investors. Thinking in the long term is foreign to America.
So thinking in the long term becomes any individual's responsibility -- and yet Americans are conditioned against it and what gets admired is "get rich quick." No one does. The people who did are people who put in a lot of hard work before what they were doing paid off and became popular. The ultimate get rich quick is a Lottery winner -- and the majority of Lottery winners lose it all, going bankrupt within a year or two by spending it all in careless ways. Or given recent events, maybe through investing it in ways that looked wise.
Your time is valuable. Your experience is valuable. Your identity is valuable and what you do, who you are is measured in a lot more than how much you own.
A recent article on sexuality mentioned that the increase in happiness for people who have sex once a week rather than once a month is about comparable to $50,000 more income. So paying more romantic attention to your spouse is something that can give both of you happiness. One of the corny things that happens to be literally true is that sex is much better between experienced partners in a long term relationship.
Like dancing, it keeps getting better and better the more you stick with your best partner. So that is something that retirement may drastically improve in terms of literal happiness. If you're happy, people will get envious and not stop to check your bank account. Generally a lot of them will assume you must have money, since you're happy.
There's also a natural human tendency to live by cultural expectations.Living exactly as long as your same-sex parent and die on the anniversary of that parent's death in the same way happens to a third of all Americans. Same with having kids or getting married or getting divorced. It's frightening how many people don't live their own lives, just do what they're supposed to do when they're supposed to do it -- and one of the biggest risks in retirement is that you start setting up for dying, the only expectation of the future is to die.
If you want to live a long time, enjoy your life and look forward to things that haven't happened yet, work toward them and enjoy the rewards of that work. Many things are more rewarding than working for other people or working for money. Setting it up so you don't have to worry about money has a prettier name too: financial independence.
That can be achieved by frugal living as much as by good investments or more. Waste is the norm, enormous waste. Just judging which luxuries in life you actually enjoy versus which ones you do because they're expected or were a habit that used to be convenient until it wasn't, or treats that somehow got out of hand into everyday habits can enormously reduce waste and expense while also helping your health.
The Tightwad Gazette, three volumes of it, has a lot to say about frugal living as a way to achieve financial independence -- that state of personal freedom when you literally never have to worry about money again or whether anything will earn money or not. That freedom is exhilarating, and frugal luxury, living in ways that just don't waste your time, your money or your effort on anything that isn't worth the time, money or effort, applying common sense to life instead of just following the expectations of advertisers can make life on a lower income turn into a lifestyle that's more luxurious than it was on a higher income.
I know that sounds impossible but some frugalities involve luxury. If you buy a pair of top quality boots that last for ten years and still look great, you will spend much less in the long run than if you just bought cheap boots and had to get new ones every year. Same with furnishings. A small place just large enough for your comfort, not designed to grow into raising kids in, can be furnished with valuable permanent furnishings so well that it doesn't need constant replacing of dressers and bookshelves with more cheap junk from Tarjet or Wally Mart. Getting those good things used at a thrift store and refinishing them results in something better than you could get at any store -- a sense of tangible achievement that's gone from many modern jobs.
Boomers planning for retirement now may have once been activist kids heady with the chance to change the world, thrilled with freedom, roaming the countryside or dreaming of doing so. The idea of living on less money with more pleasure is very much in tune with those dreams from youth -- it really can be that much fun. It also liberates you from all sorts of aggravation and outright abuse that most people take for granted as part of normal life. The less money you need, the less you have to bother sacrificing anything else in life to get money.
So the best kind of financial planning for retirement is to scale back before retiring or actively begin to plan for early retirement and seek financial independence. Do it out of step because you can. Do it early on purpose and make lifestyle choices to suit yourself, don't just stuff money in the bank and assume that mysteriously it'll keep growing when you have to draw on it to pay month to month expenses. What happens then is that you can outlive your savings and be stuck unemployably old and possibly sick without reserves.
Having both short term goals and long term goals that are personal and matter to you can help a lot in staying sane. My last illustration is a painting of a green river jade piece, a worry stone that a friend of mine in New Orleans gave me. It's beautiful. I've kept it on me now for almost two decades and it has a very relaxing, soft polish to it from all the times I've rubbed it, played with it, looked at it.
Your new life choices are just that -- a change in life. Make it a change for the better and it doesn't need to be defined as "retirement" -- more like "take that job and shove it, I'm off to do what I wanted to do in the first place." Much healthier way to live.
The last thing I'll note is that some people never retire. Scientists, artists, authors, a host of people in satisfying professions just don't quit. They die eventually and do so on their last dig or their last painting or book. They tend to live longer and healthier than people who retire-as-such by a huge margin. Think of how Picasso lived as an old man versus how my grandfather did. Retirement as such isn't the same thing as Financial Independence.
Financial Independence is exactly that, and if you gain it early then you don't have the stigma of "Has-been" at all. You just freed yourself from an unpleasant obligation and have the rest of your life to do what you want with. That freedom is wealth beyond imagining, that freedom is something basic and real. It is a luxury even the very rich don't always have because maintaining those huge fortunes takes continual work and often skullduggery -- while going on being a productive fishing guide or artist or archaeologist, getting a degree in something that "doesn't pay well" and doing geology for research instead of oil companies, can give lasting fame in your achievements.
So don't live by the numbers and die when you're told to. Live the way you choose to, sit down and plan those choices according to who you are and what you really want, what matters to you. You can get a lot more for less if you abandon the expected and follow your heart.
This Hub article is my answer to the Hubmob on "Financing Your Retirement" -- here's the link to the HubMob: http://hubpages.com/request/18745/?new&rss -- my real answer to how to finance your retirement is to get The Tightwad Gazette and use it to reevaluate all of your financial decisions and life choices. Doing it now will mean that retirement isn't Riches to Rags and dependent status.