A Bodey in Motion

Building momentum, one step at a time

FPU Lesson 7 – Retirement and College Planning

Once the debt is gone and you’ve put together an solid emergency fund, it’s time to start working on funding the future. Both for yourself and your children. Below are my notes from the lesson, including the key points that I highlight from the video when leading the class, and some supplemental material that I think could help the class go further on this topic.

Financial Peace Unversity

Lesson 7, Retirement and College Planning

Key Points

Independence in the future is up to you. Work with investment advisors who have the heart of a teacher. You are responsible for funding whatever kind of future you want to have. Do not count on government programs or handouts to provide for you. Make a plan and start now.

The best way to invest is to be out of debt first. Work the Baby Steps. If you try to fund your future while trying to save for emergencies, put aside money for your kids college, and make all of your debt payments, well you’re not going to do any of those things well. Multitasking is a bunch of crap. Only work on one goal at a time until you’ve mastered it, and then move to the next step.

Don’t put all of your eggs in one basket. You must diversify. Spread your money around. You should never pile all of your wealth into one particular investment. The more you spread it around, the better your money will grow.

Fund college education only after you are fully funding your retirement. Your kids future in college may or may not happen. Your future (and your spouse’s) is definitely coming, and you need to be ready for it. There are a lot of options for your kids to fund their education, and it’s probably healthy to let them explore them as a part of the process.

Challenges

Can You Get a 12% Return? Investing is about long-term growth, and requires patience. Dave bases the 12% number on the average performance of the S&P over the past 80+ years (11.84%). Individual annual returns are going to fluctuate:

2010: 15.06%
2009: 26.46%
2008: -37.00%
2007: 5.49%
2006: 15.79%
2005: 4.91%

Based on 20 to 25 year averages, I feel 10% is more realistic, but ask me again in 5 years.

What’s Your Magic Number? How old are you going to be when you retire? Is 65 set in stone?

Consider Life-Long Work. If you are doing work that you love, why would you want to stop doing it? What does that do to the concept of retirement?

Say No To Student Loans. The average student graduates with $27,000 in loans (In 2011, it was $24,000, and in 2008 it was $18,000. Not a good trend). In most circumstances, these are NOT able to be bankrupted.

Is Education Changing? Almost everyone predicts that the next big economic bubble will be in education. At the same time, how we learn and what we need to learn has changed. Will the next decade do to the education industry what the last decade has done to the newspaper industry?

Go Deeper

  • Thou Shall Prosper by Rabbi Daniel Lapin
  • 48 Days to the Work You Love by Dan Miller
  • Stop Stealing Dreams by Seth Godin
  • Debt Free U by Zac Bisonette

Next week: Lesson 8 – Real Estate and Mortgages

April 17, 2013 Posted by | Marriage and Family, Work and Money | , , , , , , , , , , , , , , | Comments Off on FPU Lesson 7 – Retirement and College Planning

Quick Hits: Jesus was dirty. PhDs receiving welfare. Fredric Wertham, lying bastard.

  • The horror...of lying psychiatristsEarlier this year, I came upon an article which I think does a great job of describing the “fully man” side of Jesus. The man Jesus wasn’t walking around clean-cut with a halo over his head. He was dirty and calloused. His family suffered when times were tough. He might even have had dysentery. Painting a more profoundly human picture of Jesus as a man doesn’t weaken him as a Savior. How much more did he have to live fully in the providence of the Father as that final act of sacrifice was played out? As ‘fully God’ he knew what had to happen, and he was still ‘fully man’ enough to ask if the cup could pass from him. It’s just astonishing.
  • If you are half the comic book geek that I am, you know the name Fredric Wertham. He was the crusading author of the book Seduction of the Innocent which asserted that children were more likely to engage in violence, sex, drug use, etc. when they regularly read about it in crime, superhero and horror comic books. His work basically led to the creation of the Comics Code Authority which effectively neutered the quality of comic book stories for the better part of half a century. Well, it turns out old Freddie relied on untrue revisions, distortions, and omissions when he presented the evidence that eventually led to the publication of his 1953 text that started it all. The lying bastard.

March 29, 2013 Posted by | Quick Hits and Links | , , , , , , , , , | Comments Off on Quick Hits: Jesus was dirty. PhDs receiving welfare. Fredric Wertham, lying bastard.

Quick Hits: Girl Scout debt badge. Robert Kearns wasted his life. Procrastinatrix wanted.

  • Cookies taste better with debtI love being a Daddy. I’ve got three kids, and they’re great. They’re also a huge responsibility. There are so many things they have to be taught before they become a fully grown adult that can be released into the world. They need to know how to succeed in all the areas of their life. It’s tempting to offload your parental responsibilities to other authorities, like teachers and pastors, but don’t do it. For example, financial education, if it happens at all, is coming from some of the worst sources. Practical Money Skills sounds like a good thing, until you notice that it’s distributed by Visa and includes lessons like “Financing Your Education” and “Why Credit Matters.” Even the Girl Scouts have gotten into the act by giving the girls a chance to earn their Good Credit Badge as a part of their cookie sales. Don’t let your kids grow up to believe that debt is OK, because it’s not.
  • If you are a creator, maker, or artist, you might be worried about what it takes to protect your IP. It’s a valid concern, but I would ask that you first heed the warning of the life of Robert Kearns. It’s a cautionary tale for us all, because it’s easy to lose focus when we feel we’ve been wronged. But our crusade can quickly squeeze out the resources we have to grow and produce. Remember that your first order is to bring your creations and beauty into the world. It’s how you serve your fellow man, and how you fulfill your purpose. Don’t waste that.
  • There are days when just staying on schedule and finishing everything that needs to be finished is a struggle. Apparently, I need a procastinatrix. I’d better be careful when I’m interviewing someone to fill that role, though.

March 19, 2013 Posted by | Quick Hits and Links | , , , , , , , , , , , , | 4 Comments

Quick Hits: Tobacco farmers face changes. Balko’s new book. Intercourse to climax.

  • Radley Balko, award-winning criminal justice and civil liberty investigative journalist (and all around bad-ass), is getting ready to release the must-read book on the militarization of police in America this Summer. As part of his push, he’s been posting the sordid details of a different militarized police operation every weekday to his blog (he claims to have over two years worth of material at that rate, with more coming in the time). It’s important to remember that there are no actual officially published numbers regarding these kinds of activities (SWAT raids, etc.) in America. So, until state and local agencies become more transparent, anecdotal evidence and extrapolation are the best we can do. If you want to learn more, check out this interview with Balko regarding the upcoming book.
  • How long is it from Intercourse to Climax? Well, that depends. If you’re a man, you probably take a slight left onto PA-283, and head past Harrisburg on your way to Climax, PA – a quick 4 hours away. However, if you’re a woman, you’ll likely take a left onto N Hills Rd, winding your way through Maryland until you get on the I-95 and eventually arrive in Climax, GA – which is a 15 hour trip. It’s important to keep in mind that women need to leave about 11 hours earlier if both partners want arrive at their destination simultaneously, but you probably knew that already. Next time, we’ll discuss the best routes to Coxsackie from the Meat Packing District in NYC.

March 12, 2013 Posted by | Quick Hits and Links | , , , , , , , , , , | Comments Off on Quick Hits: Tobacco farmers face changes. Balko’s new book. Intercourse to climax.