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| the "grumpy old goat" emporium grumpyoldgoat.com Your source for good advice. It cost nothin, and it's worth the price. Where attitude is everywhere, and the goat rules, so watch your backside. |
| Meet Robert Plumb LEARN ABOUT HIS PREPLANNED, FULLY FUNDED, FORCED EARLY RETIREMENT PLAN. |
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| Meet Robert Plumb |
| GOAT QUOTE HE IS HIS OWN MASTER, THEE WHO IS NOT BOUND TO ANOTHER ! |
| THREE KEYS TO EARLY RETIREMENT |
| 1) SPEND LESS THAN YOU EARN, AND INVEST THE DIFFERENCE. 2) YOU CAN'T AFFORD INTEREST. 3) EVERYTHING COMES IN DIFFERENT SIZES. PICK THE SIZE YOU REALLY NEED. |
| By now, you are probably wanting to know what all this is leading to. Well, it turned out that the "old guys" were right. There would be more layoffs. As it turned out, after a few more than 20 years with the big corporation, my number was up. I was sent to a room where grand speaches were made to me as if I were fortunant to have been selected, because they had such a generous severance package to offer. Actually, I did feel rather fortunant, not because of their generosity, but because I listened to the "old guys" more than 20 years earlier, and took the initiative to prepare for the enevitable. Now let me tell you that even if you have prepared for this event, it still comes as a shock that takes several days to come out of. At first, you won't sleep at night. Your mind is so busy trying to figure out what to do, that you can't sleep. After that, you are so tired that you finally get some sleep. Then you can start working on what to do next. If you have prepared for this, you will then start to relax and consider your options. Depending on how long you have been planning, you might be able to take your time finding a new job, or just go ahead and retire all together. That's the state I've been in for over two years now. Not a bad place to be. And I owe it all to the wisdom of the "old guys", and the curiosity of the young kid, over 20 years ago. |
| I started out as a kid, in the big corporation. Eager, and full of ambition, I was ready to go. Everything was a challenge. New things to learn. New things to do. Work was fun! It didn't take long to figure out that I was different. Nobody else seemed to be having this much fun. Most of the people I worked with were real "old" (40-50). They all seemed tired, and grumpy. They weren't having any fun! "How could this be?", I asked myself. I was having a blast, and they were so miserable, and we were all doing the same thing. My original plan was to spend my entire career right there, at the big corporation, having fun. I was going to retire there. Being that I wanted to spend so much time there, and that I had already noticed how unhappy all the "old guys" were, I figured that I had better look into this. This was to be my first "research project". |
| Wow, what a revelation. And it explained the layoff paranoia, too. The big corporation opperated in cycles, as well. Now I was getting somewhere with all of this. I had a place to begin. All I had to do was to figure where it was that I would go with it. I decided to start by asking the simple question of, "Why do you need a job?" It seemed like the place to start, since so much of the paranoia was centered on the fear of loosing a job. So why do you need a job? Well, duh? To pay the bills with, of course! Well, the next question might just be, "How do retired people pay their bills?" Think about it for a while. The obvious answers would be; pensions, social security, and personal savings. It was easy to see that concentrating on pensions and social security wasn't going to help me to remove myself from the paranoia of being layed off. That left me with personal savings as the only source of refuge available to avoid the fear of layoff. At the time, I had a small nest egg started, but nothing very impressive. I was single, and working way too much overtime, so I didn't have time to spend all my money. (Also, and this was important, I didn't have anybody else at home spending it for me. This isn't an essay against marriage, but if your partner doesn't agree with you about savings, well good luck.) It was time to do some more research. My quest was to learn to invest. My small nest egg was safely tucked away in some cd's so that nothing would happen to it. I was told to do this by several "old guys", and up to now, they seemed to know what they were talking about. But I was heading into uncharted waters, areas that the "old guys" feared to go. I was setting a course to steer me away from layoff paranoia for good! What did I learn? Well again, I read several books on the subject at hand, this time investing. And right off the bat, I learned that the "old guys" were right again, this time about cd's. They had told me that if I put my money in cd's, then nothing would happen to it. I had just found out that "nothing" is pretty close to what happens to money in cd's. It sits there and very safely collects interest for you but at too low of a rate. Nothing happens! It just takes too long and inflation takes too big of a bite out of your return. I needed to find something a little bit more agreesive. |
| At the big corporation, they had a savings plan where you could put money in, and they would match your contributions at a certain percent, up to a stated maximum percent of your salary, wew! What a mouthfull. Yes, we are talking about 401k plans. As usual, I started asking the "old guys" about the savings plan and boy was I in for a surprise! This time the "old guys" weren't all telling the same story. In fact, it seemed that if I talked to 10 of them, I got 12 answers, and they all contradicted each other. The "old guys" didn't have a clue how this plan worked! I would have to figure it out for myself, and I was definantly in uncharted waters now. Time for more reading. I got out the booklets they sent us about the savings plan and began to read. I told myself to not worry about weather it made any sense, just read the words. That turned out to be a good idea, because it didn't make any sense. Not the first time, or the second time, or even the 43rd bazillionth time, but eventually it did. So I started to fund the plan at the maximum percent of my salary that the big corporation would match with their contribution. It didn't take long for this money to start to build up, but there was still a nagging problem in the back of my mind. With a little math, I could make projections out into the future and see how big my nest egg would become over time. If I pushed it out to normal retirement age, say 60-65, it would be huge (six figures), but it was going to take 40 years to get there. I wanted something a little quicker, so that I could stop worrying about my impending layoff. The next question was, "What more can I do?" |
| You must realize here that I just wasn't "dumb enough" to take the union course. I was blessed with enough inteligence that I would have to take the "live better on less money" aproach instead. It was true, as the boss had proclaimed it upon me, and it layed out my destiny. I would learn to live better on less money. How do you do this, you may ask. Go ahead, ask, "How do you do this?" Well it turned out to be fairly simple. It comes down to 2 more things. We already know that you have to spend less than you make, and invest the difference. We also know that it takes too long to save enough to retire if you do it the way your supposed to, that is if you want out before 60, and I was looking for a fast way to break the chains of the threat of layoff. So out of nowhere, I suddenly had two more ideas to help me achieve my goals. They are; you can't afford interest, and everything comes in different sizes. |
| IT'S A GOOD THING THAT I HAD MY PREPLANNED, FULLY FUNDED, FORCED EARLY RETIREMENT PLAN TO FALL BACK ON. |
| *It will be noted that when I was layed off, it looked like the big corporation used the seniority list from our department to make their selection. Only in our case, they started at the top of the list, and worked their way down. Also of note, about two years before this layoff, several new employees were hired into the department. The bosses asked us "old guys" to train the new kids, and we did. When the work ran out, we were told that a skills enventory was taken and that it was the basis of their decision of who to layoff. When we were informed of our layoff, we were told that we scored sufficiently low enough on the skills enventory that we must go. Of course, the new kids scored higher than the "old guys" who trained them. It just goes to show that those who can't do, teach! |
| WHY WERE THE "OLD GUYS" UNHAPPY ? |
| So I started talking with the "old guys", asking them questions, and listening to what they said, how they said it, and just as importantly, what they didn't say. After awile, the "big story" started to unfold. There was a general lack of trust of the big corporation by the "old guys". They all had different stories, but there was a thread that ran through them all. They felt betrayed! One of the main themes that kept raising it's ugly head was the threat of layoff. Apparently, there had been a large layoff a few years earlier, and several of the "old guys" had been involved. They had recently been re-employed by the big corporation, and were rather bitter from the whole experience. Quite often during these conversations, I was warned that I too, could be layed off. And it could happen at any time. |
| At first I thought that their continued fear of layoff was a bit unwarranted. We had work coming out of our ears, were working overtime almost every weekend, and there was no end in sight. I brought this up, and was assured that this was also the case before. Then they told me that it was like somebody had pulled the rug out from under the whole shebang. Suddenly, all the work was gone. Being that the department was not union, the pattern of layoffs brought on some animosity as well. I was told by many, that people from other departments were placed in our department instead of being layed off, which caused several more people in our department to be layed off. Of course, other things came up during these conversations. People being passed over for promotions, normal office politics, and the such. Still, the main theme that I was hearing was layoff, and how suddenly it could pounce upon the scene. About this time, I took an interest in the economy in general. I read several books on the subject. Some were predicting good times forever. Others were predicting gloom and doom, soon. And a few of them were of a historical perspective, relating what had actually happened over the course of several generations. I started to notice a pattern in the history of our economy. It opperates in cycles! |
| DID YOU SAY LAYOFFS ? |
| IT OPERATES IN CYCLES |
| NOTHING HAPPENS |
| WHAT MORE CAN I DO ? |
| Well this was a simple question. The answer was, to save and invest more money. Being single, I didn't have to sell this idea to anybody at home, so saving more money was a simple process. But I wanted more! I wanted to break the bondage that the fear of layoff had created. How could I save more money? It seemed there were two possible answers to this question. One was to earn more money, and the other was to spend less money. Earning more money seemed to be slightly flawed in the respect that I wasn't the only person that got to vote on this plan. The bosses got to vote on how much I earned too, and they seemed to be on my side, but there was only so much they could do to help me. Their resources were limited. To a large degree, I would have to help myself. That left me with the option of spending less money. Actually, this wasn't even my idea. One of the bosses gave it to me during a conversation with him, another kid, and myself. The other kid asked why the union workers in the shop made so much more money than we did. Now pay attention here because this was a really creative answer. The boss told us that, "We made less money, because we were considered to be smart enough to live better, even though we were payed less. We didn't need as much money as the union workers, to live well." I didn't make that up, he really did say it. I guese I should of opted right then for one of those dumb guy union jobs, and my money problems would have been solved, as well as my layoff problems. |
| WE WERE SMART ENOUGH TO LIVE BETTER ON LESS MONEY |
| YOU CAN'T AFFORD INTEREST AND EVERYTHING COMES IN DIFFERENT SIZES |
| What in the hell does that mean? Well lets start with the first one. You can't afford interest. Ealier, I talked about how interest from cd's could give you a false since of security. You think you have a safe investment, but inflation can eat you up real bad. Well there is a flip side to interest as well. You can't afford to pay it, either. I'm not going to do the math here, because there are lots of examples where the math is done for you. Just look around a little, and you'll find them. Just keep this thought in mind. How often have you seen a run down bank? Where do they get the money to keep up their building? From you, of course. It doesn't matter if you are lending to the bank, or borrowing from the bank, they get too much of the action. Without paying interest, how do you buy a house? Well thats a tuff one. You will most likely have to get a loan to buy a house. But you can save up a little more and put down a bigger down payment. Also, you can make extra payments, get a shorter term loan, or whatever, to cut down on your interest payments. How about your car loan? Is there a law that says you have to get a loan to buy a car? I've never seen one. Save up for it. How about your new boat? You couldn't possibly afford a boat without a loan. My question then is, "Can you afford a boat?" Remember, a boat is a want, not a need. Don't pay interest to purchase wants. Try to pay as little interest as possible to buy needs. What are needs. You need some place to live. You probably can make a fairly good case for transportation. Do you "need" your BMW bad enough to pay interest to get it? If you think so, you'll never be able to get off the tread mill. Next question, "Why do you need a BMW? Won't a Ford or Chevy do just as well?" Transportation is to get you to and from your destination, period. Anything more than that is starting to sound like a want. Remember, we don't finance wants. |
| WE DON'T FINANCE WANTS |
| Now for the second one. Everything comes in different sizes. You probably think I'm off my rocker, but think about it. Are all houses the same size? Are all cars the same size? Are all retuarant meals the same size? The list goes on, and on, and on, well you get the picture? And of course, with different sizes, comes different prices. When you buy a house, buy one that fits you. If you have 4 people living there, do you really need to finance 3000 square feet? And your vehicle, if you drive to work alone, do you need a fifteen passenger van? When you go out to eat with your spouse/date, or whatever, does it have to cost $100.00? Nobody ever "needs" a $100.00 meal for two. This is very much a want! |
| NOBODY EVER NEEDS A $100.00 MEAL FOR TWO |
| So by now, you should get the picture. If not, maybe you should re-read this article. It's not rocket science here. The most important thing is that you and your significant other have to want to accumulate enough wealth to become financially independant from the whims and realities of your employer and the economy. |
| GOAT QUOTE THE LAW OF GRAVITY SAYS THAT EVERYTHING THAT GOES UP, MUST COME BACK DOWN. |
| GOAT QUOTE BE WARY OF THE BANKER ! WHO DO YOU THINK IS PAYING FOR THEIR NICE BUILDING ? |
| GOAT QUOTE DON'T CONFUSE YOUR NEEDS WITH YOUR WANTS. |
| GOAT QUOTE DON'T FINANCE YOUR WANTS. TRY TO AVOID FINANCING YOUR NEEDS. |
| GOAT QUOTE IF YOU SPEND FIRST, THERE WON'T BE ANYTHING LEFT TO SAVE. IF YOU SAVE FIRST, YOU CAN SPEND THE REST. |
| GOAT QUOTE AS A GOOD SCOUT KNOWS, BE PREPARED ! |
| GOAT QUOTE THE NEXT TIME YOU ARE ASKED TO TRAIN SOMEBODY, FIND OUT IF IT'S YOUR REPLACEMENT. |
| GOAT QUOTE KNOW YOUR INVESTMENTS. SAFETY CAN BE JUST AS RISKY AS AGRESSIVENESS, IF YOU AREN'T AWARE OF IT'S SHORTCOMINGS. |
| GOAT QUOTE YOU NEED FOOD, SHELTER, TRANSPORTATION, AND CLOTHING. YOU WANT GOURMET DINNERS, A MANSION, LUXURY CARS, AND DESIGNER LABELS. |
| GOAT QUOTE GRUMPY IS, AS GRUMPY DOES. |
| GOAT QUOTE DO YOUR OWN RESEARCH. READ ! |
| GOAT QUOTE YOU DON'T NEED A JOB IF YOU CAN PAY THE BILLS WITHOUT ONE. |
| GOAT QUOTE IT'S HARD TO ACHIEVE A GOAL THAT YOUR PARTNER DOESN'T SUPPORT. |
| GOAT QUOTE IF IT NORMALLY TAKES 40 YEARS TO SAVE FOR RETIREMENT, WHY BE NORMAL ? |
| GOAT QUOTE DO YOUR OWN RESEARCH. READ ! |
| GOAT QUOTE IF YOU WANT TO SAVE MORE, YOU MUST EARN MORE, OR SPEND LESS. IF YOU CAN ONLY PICK ONE, CHOOSE THE ONE THAT YOU HAVE THE MOST CONTROL OVER. |
| GOAT QUOTE YOU DON'T HAVE TO BE A ROCKET SCIENTIST TO BECOME FINANCIALLY INDEPENDANT. |
| GOAT QUOTE YOU CAN'T AFFORD INTEREST, AND EVERYTHING COMES IN DIFFERENT SIZES. |
| GOAT QUOTE MORALE IS A SYMPTOM. |
| GOAT QUOTE SMART, ISN'T JUST WHAT YOU KNOW, BUT ALSO WHAT YOU DO WITH WHAT YOU KNOW. |
| GOAT QUOTE WHEN YOU PAY CASH FOR SOMETHING, YOU ONLY PAY FOR IT ONCE. |
| GOAT QUOTE A FAILURE TO PLAN, IS A FAILURE. |
| * This site has been made possible by the many, many buttholes who have left their lasting impressions on our souls. It's to you, that we let our pants down and curtsey. * If you have any questions or comments about the grumpy old goat emporium, please hesitate to contact us by e-mail. the old goat | webmaster * |
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