Hey guys! We just wanted to pop in and share some thoughts Johnny recently sent out to our secret email list. We got some really awesome, thoughtful responses from it that we wanted to share it with the rest of you, too! (And if you’d like to get similar updates from us from time to time, you can join the super secret email list here.)
In the meantime, heeere’s Johnny:
So I found myself sucked into plugging some numbers into an online calculator the other day. You know, the ones where you tell it how old you are, how much you make, etc. and it magically tells you how much money you’ll need to save for retirement or how much house you can afford. There’s something mesmerizing about giving a little robot widget some numbers, watching the dials dance and shake as you give it more data, and then being presented a single, finite answer to some of life’s most important financial decisions.
I can’t even remember what it was calculating, but it really doesn’t matter. I had just finished putting in all my numbers and watched as the final numbers settled into place.
That seems high.
There’s no way we need that much money/house/coverage.
I dug through the fine print to better understand the algorithm. “Based on normal” this and “assuming average expenses” that. Okay, that makes sense. The only way they can accurately calculate X future financial needs is to use my data backed up with average consumer data. In other words, they’re projecting my future earnings, expenses, savings, needs, etc. based on what average folks do. Fair enough.
For the most part, these numbers are a great place to start. If you haven’t ever figured out your retirement or life insurance needs, DO use these calculators. And when in doubt, DO overestimate. But…
Normal? Average? Is that what we’re shooting for? Is the way we all live so typical that it can be reduced down to a formula?
Man, I hope not.
There’s little wonder why so many of us fall in the wide, deep ruts of “the average.” We’re taught to go to school, take on student loans, graduate, find a steady job, work hard, buy a house, and retire at 65. It fits the very definition of “normal”: usual, typical, or expected. Think about your friends and family — how many of them are following this path? Joanna and I could think of one person who wasn’t. Why? Is life really that good on the path that only one person has ventured off of it? Is this the best path to happiness?
One thing is for certain: you’ll never know until you challenge it.
The average person spends 80% of their paycheck? Spend 50%. The average consumer has $4,000 in credit card debt? Do what it takes to make it $0. The average retiree stops working at 65? Make it 55. The average employee works 50/hr week at a job they can’t stand to make money they can’t spend on experiences because they don’t have the time to actually experience? Find a different path.
I’m not preaching you quit your job tomorrow and rewrite your life — yet. Start small. Find $10 of extra savings this week. Go a different route to work tomorrow. Start asking yourself un-normal questions. Take inventory of the things that control you and then figure out how to change them.
Now take 4 minutes right now and watch this: https://vimeo.com/120206922
Be the outlier. Be the asterisk.
Thoughts? Agree? Disagree?