How Much Do I Need?
At some point, every person asks, “How much will I need for retirement?” In your 20’s, the question seems absurd and too distant to even be concerned about. And in your 50’s, most people are wishing there were a better way to make up for lost time. Most Americans will not have the luxury of depending on the “security”, that used to be present in Social Security, and will find themselves working longer.
There are a plethora of tools, thoughts, and advice available to help you find out how much money you will need to save for retirement. Historically, the rule of thumb has been to save enough that you will replace about 75% of your working income. As a side note, the crux of our newsletter’s investing strategy is ensuring that the money you’re saving doesn’t get “lost” in major market corrections. The corrections horrific, in the past decade, for many investors who have lost tremendous amounts of money, despite well thought out plans. The end goal for the investor is to manage your money in such a way that you have the right amount to generate the required income, and that it doesn’t get lost along the way.
Our goal here at 401(k) Monthly is to empower toward a better future, and as Francis Bacon said, “Knowledge is power.” Some empower themselves through traditional formal education. This option has it’s obvious benefits, such as community, structure and a piece of paper showing you have indeed successfully put the appropriate effort forth to obtain knowledge. However, with current technology, you’re able learn almost anything you want for free or at least at a much lower cost than formal education.
Last year I set a goal of reading one book per week. That goal broadened my knowledge and perspective on a number of topics and expanded my world. One of the books I read was The Art of Non-Conformity by Chris Guillebeau. In his book, he outlines an alternative to graduate school. Regardless of whether you have the time or desire to do everything on his list, it’s worth your time to read through. Maybe there are a few things you can start with to increase your knowledge, and in turn empower yourself!
The following is excerpted from The Art of Non-Conformity by Chris Guillebeau.
The One-Year, Self-Directed, Alternative Graduate School Experience
- Subscribe to the Economist and read every issue religiously. Cost: $97 + 60 minutes each week.
- Memorize the names of every country, world capital, and current president or prime minister in the world. Cost: $0 + 3-4 hours once.
- Buy a Round-the-World plane ticket or use Frequent Flyer Miles to travel to several major world regions, including somewhere in Africa and somewhere in Asia. Cost: variable, but plan on $4,000.
- Read the basic texts of the major world religions: the Torah, the New Testament, the Koran, and the teachings of Buddha. Visit a church, a mosque, a synagogue, and a temple. Cost: Materials can be obtained free online or in the mail—or for less than $50 + 20 hours.
- Subscribe to a language-learning podcast and listen to each 20-minute episode five times a week for the entire year. Attend a local language club once a week to practice. Cost: $0 + 87 hours.
- Loan money to an entrepreneur through Kiva.org and arrange to visit him or her while you’re abroad. Cost: Likely $0 in the end, since 98% of loans are repaid.
- Acquire at least three new skills during your year. Suggestions: photography, skydiving, computer programming, martial arts. The key is not to become an expert in any of them, but to become functionally proficient. Cost: Variable, but each skill is probably less than three credits of tuition would cost at a university.
- Read at least 30 non-fiction books and 20 classic novels. Cost: approximately $750 (can be reduced or eliminated by using the library).
- Join a gym or health club to keep fit during your rigorous independent studies. (Most universities include access to their fitness centers with the purchase of $32,000 in tuition, so you’ll need to pay for this on your own otherwise.) Cost: $25-75 a month.
- Become comfortable with basic presentation and public speaking skills. Join your local Toastmasters club to get constructive, structured help that is beginner-friendly. Cost: $25 + 2 hours a week for 10 weeks.
- Start a blog, create a basic posting schedule, and stick with it for the entire year. You can get a free blog at WordPress.org. One tip: don’t try to write every day. Set a weekly or bi-weekly schedule for a while, and if you’re still enjoying it after three months, pick up the pace. Cost: $0.
- Set your home page to http://wikipedia.org/random. Over the next year, every time you open your browser, you’ll see a different, random Wikipedia page. Read it. Cost: $0.
- Learn to write by listening to the Grammar Girl podcast and buying Bird by Bird by Anne Lamott. Cost: $0 for Grammar Girl, $14 for Anne Lamott.
- Instead of reading the entire Encyclopedia Britannica, read The Know It All by A.J. Jacobs, a good summary. Cost: $15.
TOTAL COST: $10,000 or less
*The total cost of the self-directed, alternative graduate school program does not include housing or food, but neither does the tuition for traditional school programs in the U.S. and Canada. Freedom and independence, however, are included at no extra charge.