Awhile ago, I posted that I don't have a 401k or any sort of "retirement fund". I know that this is far from the norm considering that I'm writing a personal finance blog. Everybody knows that the key to financial independence is to lower your debt and increase your retirement fund. Right? (Well, everybody who's interested in this type of thing at least. I suspect that many "normal" people are not too far from where I am.)
I further state, for those of you who didn't read that post, that the reason that this doesn't bother me is because I believe that the world (as we know it) is going to end in five years and money will cease to exist.
Naturally, someone (Frank, but I can't go to his website...) asked..."Don't you want a safety net? Suppose you're wrong and the world DOESN'T end in 5, 10, 50 years? You're putting a lot at stake."
A very fair question indeed. One which requires a two part answer:
1. Yes, I do want a safety net. But my idea of a safety net is much different than other people's ideas. Most people think that it's best to save a lot of money that you'll have on hand when it's time for your retirement. But the majority of people put their money in the stock market. How safe is that really? What's going to happen when the gazillion baby boomers collectively start withdrawing even a modest $1000 a month to cover their expenses in retirement? Will there be enough people putting money into the system to keep that up? Is the stock market just as much of a ponzi scheme as Social Security? I'm not an economist, but I do have common sense. And the stock market just doesn't hold up to my common sense.
My idea of a safety net is working towards living sustainably. I need a place to live and food to eat. If I were to own a house outright and be able to grow the majority of my food, then I wouldn't really need much money. To be honest, I haven't really thought that much about the cost of things, but I would estimate needing $50/month for internet and maybe another $50 for food that I cannot grow myself. Then maybe another $100/year for clothes. Of course, potential big expenses could come from medical needs and taxes and I'm not even going to try to estimate those on the fly. But I don't have a lot of needs or wants. Electricity could come from solar panels. Books can come from the library. And I have a whole big beautiful world to entertain me. That's all I need. It's more important to me to reduce the amount of money that I need rather than increase the amount of money that I have.
2. What if I am right? What if money did suddenly cease to exist? How much of your life did you waste acquiring and saving for something that you didn't need? Would you wish that you had spent more time with family? With yourself?
I realize that everyone has different priorities. But to me it's more important to spend my time living now than it is to save money so I can live life later.
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Hi Shannon,
Thanks for the reply! My personal blog is over at http://www.tucos.net. While I don't believe the stock market is built up as a "ponzi scheme," (I'm biased, since I work in the field) there are plenty of other places to but a safety net of cash if you fall on hard times. Even a high-yield savings account at ING Direct will out-pace inflation, and is FDIC Insured. I don't think you have to have regrets to be a saver. I don't work particularly long hours, and I still spend a lot of time with my girlfriend and relatives (Still not a family of my own, too young ;). I also manage to save a large part of my paycheck and hope to retire early or at least be able to down shift to less hours within the next 5-10 years.
Thanks for the post, and its a great blog you have here, good luck on your new business!
I'd be interested in your explanation of how the world is going to be ending in 5 years.
Are you thinking of peak oil?
Regarding the end of the world...I have a friend who was very interested in the Mayan culture. They came up with an end date of 12/21/2012. That alone wouldn't be enough to make me think that the world was going to end at that time.
However, there is also a book "The Invisibl Landscape" where the McKenna brothers speculate on the "rate of novelty". Their idea states that the rate of new things has been increasing exponentially. For example, there were many more new things between 1980 and now than there were between the years 400-600AD. They charted this graph and came up with an end date, when we will finally know "everything", of 12/21/2012. This was completely without knowing about the Mayan prophesies. This is why I find it so interesting.
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