Meri Murphy was recently featured in the New York Times)1 At 67 years old, she’s chosen to spend her retirement traveling the world. She adheres to a strict $65-a-day budget and minimizes insurance costs by using local doctors in the countries she visits. Her social security is $1,567 a month after taxes, and she receives $1,110 a month for a government pension. With $2,677 a month, she is living out her dream to spend time in every country before she dies.
It’s not everybody’s dream retirement—in fact, it’s pretty “out there” for most of us. But what Meri’s story proves is that you don’t have to be rich to have the retirement of your dreams. You don’t have to be a millionaire. But you do have to plan for the utility of your money.
For years I’ve been working with a woman named Nicole Walker who would give Meri a run for her money. Having paid off her house, she has zero debt, a net worth of $900,000, and she’s in the middle of a year-and-a-half journey backpacking around the world. She basically took $100,000 of her investment income for the next year and a half, and that’s her backpacking fund. Knowing Nicole, she’ll probably do the whole thing for closer to $30,000.
Nicole, at 62, retired early and happy by doing all the right things to save the right amount of money to live the life she wants to live. In the meantime, the $900,000 she has saved remains invested and continues generating income for her.
Here’s how the numbers work for Nicole:
• $1,750 per month from social security
• $1,000 per month from her pension
• $3,000 per month from investment income (She takes her $900,000 in savings and only withdraws 4 percent per year, equaling $36,000 per year, or $3,000 per month.)
• Total monthly income = $5,750 = backpacking and happiness for Nicole
Nicole is doing exactly what she wants to do with her retirement because she laid the groundwork we’ve talked about in this book. When the time came, she had the freedom to retire early and happy.
Happiness is freedom. It is the freedom to be healthy and social. It is the freedom to have core pursuits. It’s the freedom to enjoy your life. In the grand scheme of things, we’re not really on this planet all that long. Why not enjoy the time we have?
The tools in this book are geared toward giving you the economic and financial freedom to unlock all the other possibilities. The happiest retirees have the economic freedom to spend a lot of time doing what is important to them. They’re in the passion zone. This economic and financial freedom allows them to be fully engaged in their core pursuits around the world.
Take a Trip and See the World
Throughout the course of history, travel has often been considered the purest form of freedom. Even today, you can’t do it unless you have the financial means to create that opportunity, and there are still plenty of countries in the world that don’t make it easy. Think of North Korea, or the years of travel restrictions between the United States and Cuba. Think about all the other countries with ambiguous restrictions or possible travel warnings from the U.S. State Department. I’m thinking of China, Angola, Algeria, Turkmenistan, Bhutan, Saudi Arabia, Myanmar, and the Maldives.
The point is, throughout history, and even to some degree today, being able to travel freely without limit or hindrance has never been a given. With that in mind, shouldn’t we take advantage of it every chance we get? Doesn’t it make sense to say that is freedom and that is happiness?
I can’t tell you how many of the couples I work with have a blast RVing around the country. They take an RV or pull a camper in a truck and head out on the open road. Even John Steinbeck did it in his book Travels with Charley: In Search of America. He understood the feeling, the need to get out and be free.
Connie Wheeler came into my office recently, on the very day she retired from a global electronics firm after 32 years. Her husband, Don, had already retired from the HVAC industry. Guess what they’d like to do? They ride Harleys. Yes. Harleys. Don drives, and Connie rides on the back. They’ll go from Atlanta up to New York City, or down to Miami or Daytona.
Sam and Loretta Freeman have traveled to all 48 continental states in their RV. Next year they’re finally going to Alaska. They’ve already decided they’ll hit up Madrid after that. Is there a bridge to Europe?
Vicki Hightower went to Moscow for the cultural experience. She took her 16-year-old granddaughter with her, and two of her granddaughter’s girlfriends. She showed her granddaughter the Kremlin, bad food, Pepsi, and vodka. At least that’s what I remember from my time in St. Petersburg.
Rick Harmon is a former executive director of one of the top 10 national Philharmonic programs. His wife, Genevieve, has been a lab process quality control manager at a major medical research institute for 28 years. Rick and Genevieve recently came into my office because Ginny wanted to figure out what date she could retire. She’s 63, and Rick has already retired.
I looked at Ginny’s financials and told her to retire in a few months when she hits 64. It’s not worth the extra couple hundred dollars a month she’d get from her pension and social security if she waited. There’s too much life to live.
They were elated. She actually came around the desk and hugged me!
What was the number one thing on Rick’s to-do list? You got it—more travel. Originally they were thinking about going to live near the Redwood Forest in California, buying a condo for around $180,000. But they changed their minds. They decided they’d rather take the entire family to Australia. Rick said, “That’s not a $1,000 vacation. That’s a $20,000 vacation. And that’s where we want to spend our money.”
I said, “Great. Do it!”
The retirees I know who travel talk about it as a top priority for the next phase of their life. It’s amazing how passionate people are about their ability to go and see the world, as if there’s some fundamental curiosity inside of us as human beings to see the way others live.
Perhaps we Americans have a great propensity to explore the world because it’s simply in our blood. Our country split off from England; the people who came here were adventurous and searching for something else. This could explain why exploration seems to be a core pursuit for the people in my happiness survey.
Your desire for freedom never changes. You have it when you’re a kid, and then you generally sacrifice much of it while you’re a working professional and parent. You give up these little bits of freedom for more money, more savings, a better parking spot, a better title, etc.
Then, when you reach retirement, it’s as if you revert to being that free-spirited fifth grader again. Your priorities change. Your grandchildren are important to you—your family, your community, and the people around you, and that’s why you volunteer at your place of worship—but you’re also ravenous for freedom. And that’s what retirement is.
Retirement is freedom. Or at least it should be.
You don’t have to wake up and go to work. You’ve done your share of that. If it’s 2:00 p.m. and you want to go play golf, you go play golf. In a way, retirement ties recreation and travel and family together.
We all want freedom. The manifestation of that desire is different for each of us, but the root of it, the base that burns deep inside, is the same. We’re all searching for freedom—we just don’t always define it the same way.
Stay Healthy and Live a Longer, Richer Life
There seems to be little doubt of the correlation between wealth and health. Where the debate gets louder is in regard to which contributes to which. Does higher wealth lead to a longer, healthier life, or does a healthy life allow a person to accumulate wealth?
In his article “Healthy Bodies and Thick Wallets: The Dual Relation Between Health and Economic Status,” James P. Smith, senior economist for global policy think tank RAND Corporation, does admit one of his studies showed “both total household income and wealth have statistically significant positive effects on self-reported health status. This relation is only reduced by a third when controls are added for health risk behaviors such as smoking, excessive drinking, exercise and Body Mass Index (BMI) (for obesity).”3
This should not be taken as a definitive answer to the question, “does an increase in wealth lead to an increase in health?” Smith even says, “The causality debate surrounding the social health gradient is not a boxing match in which a knockout blow will eventually be delivered.” However, studies such as this, when combined with the results of my survey, leads me to conclude the more wealth you accumulate, up to a certain point, the better chance you have for mental and physical well-being.
Following my advice may not necessarily guarantee you a healthy life, but as far as I’m concerned, it increases the odds dramatically.
Make the Most of Your Core Pursuits
Having the economic freedom to go after your core pursuits only works if you actually have core pursuits. Money by itself does not bring happiness in retirement. I see evidence of this in the happiness levels of retirees whose only income is from a pension or from social security. I believe there’s something inherent in the drive to build a nest egg that has residual effects on retirees.
Smith’s research touches on this very topic. He states that part of the information he studied “shows that the positive relation with good health characterizes only wage income, while retirement (pension or social security) or ‘safety net’ income are negatively correlated with good health.”
He goes on to say the reason has to do with the fact that individuals, especially in their fifties, who receive income from pensions, social security, or safety net programs are more likely to be in poorer health, and this suggests the main causation flows from health to income.
It seems that I need to introduce James P. Smith to Nicole Walker and Meri Murphy—retirees living on “safety net” programs who are happy, healthy, and travelling the world.
The happiest retirees have the economic freedom to fully engage in their life’s core pursuits. There are a lot of building blocks underneath economic freedoms. It takes a lot of time. You can’t attain it overnight—unless you win the lottery, which brings to mind a recent Mega Millions Jackpot valued at more than $600 million. The chances of winning were worse than the odds of being killed by a falling coconut or wobbly vending machine. I’ll take my chances that sticking to the five money secrets in this book have a much greater probability of success.
How many of the five money secrets are purely financial in nature? A solid four of them:
• Secret #2, the right amount of savings
• Secret #3, no mortgage
• Secret #4, multiple income sources
• Secret #5, income investing
Yet the very first money secret is to have a high number of interests and core pursuits. You can’t have one and not the other and still be happy. You can have economic freedom, but if you don’t have any core pursuits, you’ll be unhappy. You can have many core pursuits, but with no money to pursue them, you’ll be unhappy. So you have to have both.
I’m going to assume you will continue to work hard to make my five money secrets a reality. Those are long-term fundamental pieces of your happiness puzzle, and quite frankly, once you reach economic freedom, you’ll have even more time to dedicate to the things you love.
Making the Most of Your Golden Years: Get Involved and Get Happy
I can’t let you finish this book without a strong, clear vision of all the great things you can do with your life. This whole process is about your enjoyment. Your life. You!
Here are just a few of the things we’ve discussed in this book, to remind you of all the fun stuff awaiting you in early retirement. This is just a taste of all the exciting things you could be doing in a few more years.
Go Someplace
Some of my strongest survey data shows that happy retirees absolutely love to vacation. In fact, the happy group vacations nearly 70 percent more than the unhappy group. It makes sense, right? Who doesn’t love vacations? Get yourself to the point financially where you can take more of them.
Happy retirees not only vacation more often, but when they do vacation, they spend 33 percent more on each vacation (on average). Thus, they inherently spend more of their annual budget on “having fun and exploring.” More travel equals more happiness in retirement. Of course there are exceptions, but for the most part this holds true. Why?
There’s definitely an element of “duh” factor here. Sure, more fun trips equal a better, happier life. It’s more fun to eat croissants along the Seine River in Paris than it is to write a mortgage check. No one’s going to argue that! What’s interesting here is that the happier retirees see more utility in money. They place more value on using that money in order to get more enjoyment out of life. Hence travel becomes one way to utilize that money.
Help Somebody
Interestingly, both happy and unhappy retirees spend some time volunteering. However, the happiest retirees are three times more likely to volunteer. In fact, it’s the number one core pursuit for happy retirees. Socializing, giving back, making a difference—it’s easy to see why they like it and why they’re happy.
You want to raise money to fight cystic fibrosis? You’re going to have big events and parties and silent auctions and live auctions. You want to raise money for your kids’ school? Volunteer your time? You’re going to have events around that, and pledges, and sporting events, and Walks for a Cure, and jump-rope-a-thons, and dance-offs. There will be a lot of cocktail hour events and banquets. These are super social things.
The added bonus is that you’re actually helping people. Let’s say you’re working the line at the women’s shelter for your church, and you’re giving out Thanksgiving dinner. You’re physically working with your other volunteers, and you’re physically interacting with the people you are trying to help.
So whether it’s people with cystic fibrosis, kids who are battling cancer, women who are homeless because of domestic violence, or just helping revitalize a park in your community for the neighborhood children, you are working closely with your fellow volunteers. You’re there with the people you are trying to help. There’s a dynamic social environment—and that, my friends, is the essence of being a human. To me, it’s such a clear, clear formula to living a happy life. Period.
I also believe that volunteering in and of itself will bring you fulfillment. I’ve seen so many of the lovely individuals I work with go from being a successful individual or businessperson to becoming a significant person. It’s the difference between success and significance, and that’s part of what volunteering brings out.
Close the Book
Not this one, of course—though you’re almost done! The unhap-piest retirees almost always reported the same core pursuit in the number one place: reading. There’s nothing wrong with reading, of course, but it’s a very solitary activity. These unhappy retirees like spending time with their grandchildren, which the happy retirees would applaud, but they also enjoy fishing, hunting, and writing. What do all of these pursuits have in common? You guessed it: they are often solitary endeavors.
Get Out
The happy retirees, for the most part, select activities that suggest they are highly social and enjoy being around other people. They love to give, love to explore. The unhappy group of retirees like to sit quietly and read with their grandchildren in the other room while they get ready to go hunting alone. To be fair, that’s probably going a little too far with my analysis of the data, but when it comes to sewing the social fabric of our happiness, interaction with others is paramount.
Eat Steak
Not every day—neither your budget nor your arteries can handle it! But when the time is right, treat yourself to a nice dinner at one of the happy retiree spots, like Ruth’s Chris Steak House, LongHorn, or Olive Garden.
Be with People
This one’s so important it’s actually linked to life expectancy: socializing is one of the most important contributing factors to people living long lives. We know this from The Blue Zones, the book I mentioned earlier.
Author Dan Buettner describes cities around the world—from California to Greece to Japan—where the inhabitants are living happier and longer. National Geographic even took notice. Take a look at his “The Power 9™ from The Blue Zones: Lessons for Living Longer from the People Who’ve Lived the Longest” and you’ll find some familiar territory.
From finding a purpose and pursuing it with passion, to taking more vacations, to making socializing and family a priority, it’s like The Blue Zones interviewed my happy retirees. It’s fantastic—and further proof that you need to emulate this behavior if you want to retire early and retire happy.
As I’ve said, what the data on my survey and the actions of my clients have revealed is that being social is a very important part of a happy retirement. When asked directly, that wasn’t a top response, yet four out of five of the top responses for the happy group, by definition, are social activities.
In other words, being social is just inherent in what they like to do. They may not know it, but their instincts do, and that’s a big part of why they’re happy. This just proves to me that socialization is something to strive for in your life.
And even if you are social and have social pursuits, I encourage you to continue to push that, to continue to focus on expanding your social scope, sphere, and interactive core pursuits in the world. It’s very clear to me that this is a big part of landing in the happiness category.
“But Wes,” you say. “I’m an introvert! Does that mean I won’t be happy in retirement?”
Perhaps you’d rank yourself low on the introvert-extrovert scale of 1 to 10. That’s totally fine. But even if you consider yourself an introvert, I’d encourage you to push the envelope on this. If you’re socially interactive and you’re happy, maybe only a 3 on the scale, you might think about ways to become a 4 or 5. If you’re an 8 or a 9, I would encourage you to become a 9 or a 10. I’m not telling you how to live your life; I’m just telling you what makes people happy. The numbers don’t lie.
Go Live Your Life!
I want to send you off excited and ready to find your way to a happy retirement. I think the key word here is enjoy. We’re talking about enjoying the rest of your life!
Be like Marjorie Acton, a retired preschool teacher who took up cycling and line dancing at 65 and now dazzles people 30 years her junior. Or be like her husband Moe, a black belt in Goju-Ryu karate and former certified safety professional who golfs and plays tennis three days a week and teaches part-time at the local university. Or be like their dog, whose actual name is Happy!
Remember the following equation:
Health + Money + Social Life = Happiness
You can have all of those things if you follow the steps in this book. You can have the freedom of happiness. And you can have the economic freedom to be social and to engage in your core pursuits, the things that get you jazzed—the things that make you happy to be alive.
Continuing the Conversation
I’ve helped hundreds of people retire sooner than they thought possible, healthier and wealthier than they ever imagined. I hope I’ve helped you, too, over the course of this book. That’s one of the best things about my job: I get to help people create and enjoy the retirement they’ve always imagined for themselves. It never ceases to amaze me how rich, exciting, and diverse those dreams can be.
If you’ve enjoyed what you’ve read here, I invite you to continue the conversation. You can find me the following ways:
• Head over to our good old-fashioned website at www.yourwealth.com. Click on the “Ask an Advisor” button on the homepage and we will get back to you within 24 to 48 hours.
• Follow me on Twitter @WesMoss365.
• Like our radio page on Facebook at facebook.com/wesmossmoneymatters.
• Tune in to my weekly radio show, Money Matters with Wes Moss, on Atlanta’s News 95.5 and AM 750 WSB Radio, every Sunday morning from 9 to 11 a.m. EST. You can also live stream the show by visiting www.wsbradio.com.
• Tune in to iHeartRadio. If you’re outside our broadcast range, you can tune in to Money Matters on mobile via the iHeartRadio app available for free on all major smartphones and tablets. Just search for our call letters in the Live Radio section: WSB.
• If you’re not sick of me yet and would like to contact me, check out my personal web page, www.wesmoss.com, to stay up to date on my blogs, interviews, speaking events, and all things media.
I would love to hear from you!
If the strategies in this book have really resonated with you and you’d like to speak to me directly, give my office a call at 404-531-0018 or shoot an e-mail to me and my team at wesmoss@yourwealth.com.
They don’t call them your golden years for nothing. Your retirement deserves to be golden, in ways that go far beyond the bank. Settle for less and you’re cheating yourself.
Best of luck to you on the journey—it’s bound to be a great one. Get happy. Get ready to enjoy the rest of your life. And always remember: you can retire sooner than you think!