February 24


Living Life On Your Own Terms

It’s that time again.

I spend most of my time educating you on the realities of investing and retirement planning.  Often times the information I give you, while interesting, is very academic and sterile.

This week, I am going to try to make things a little more real.   You see, what we are talking about, is NOT an academic subject.  We are talking about real people in real lives.   So I’m going to tell you the success story of Larry and Linda Logan (they are a hypothetical couple for illustrative purposes).

In 1990, Larry and Linda both retired at age 65.  Together they had about $500,000 in retirement savings.    They entered their retired years with the same core beliefs as me:

  1. They invested in a diversified portfolio of stocks and bonds. For this example, we will suppose they had their money invested in a generic portfolio of 60% stocks1 and 40% bonds2.
  2. They started taking out 5% of the original account value ($25,000/yr).
  3. They did not watch the financial news. They did not check their phone every day to see what the stock market did.
  4. They focused on living their best life possible. Or more specifically:

In 1990, with the money, they hired a personal trainer and a nutritionist.  It wasn’t cheap, but it got them in the best shape of their lives.

In 1991, with the money, they hiked the entire length of the Appalachian Trail, using the best equipment money could buy.

In 1992, with the money, they learned how to scuba dive and explored the depths of the oceans.

In 1993, with the money, they took up fishing and hired a charter boat (with captain) once a week.

In 1994, with the money, they renovated their kitchen.

In 1995, with the money, Larry took up the guitar.  He got the best teacher and started practicing every day.  He even started to jam with some of his neighbor buddies.

In 1996, with the money, they rented an RV and traveled to every state in the U.S. (expect Alaska and Hawaii).

In 1997, with the money, they took a month-long luxury Alaskan cruise.

In 1998, with the money, they started playing Bridge seriously.  They hired the best teacher and they started attending events all over the state.

In 1999, with the money, Linda ran for the school board and won!

In 2000, with the money, they toured around the country following Bruce Springsteen.  They saw shows in 17 different cities.

In 2001, with the money, they turned their yard into a landscaped tropical paradise.

In 2002, with the money, Larry bought a pristine 1972 Volkswagen Super Beetle.

In 2003, with the money, they got into amateur astronomy.  They were finding that, as they got older, nature was more and more fascinating to them.

In 2004, with the money, they took a river cruise through Europe (Budapest was their favorite part).

In 2005, with the money, they sent their granddaughter to England to study for a year in Oxford.

In 2006, with the money, they took up photography.  Linda became especially skilled and developed an interest in tropical birds.

In 2007, with the money, at age 82, they decided to take up tennis in order to stay active.  They got a membership at a country club, took lessons every week and played with their friends on Tuesday and Thursday mornings.

In 2008, with the money, they helped their grandson with the down payment on his first house.

In 2009, with the money, they hired a concierge doctor.

In 2010, with the money, they organized a huge family reunion, bringing together several generations from all over the country.

In 2011, with the money, Larry published his memoirs and Linda published a book about her passion for photographing nature.

In 2012, with the money, they supported a local charity that helped feed hungry children in the area.

In 2013, with the money, they supported missionaries from their church working in Guatemala.

In 2014, with the money, they tipped every waitress with a crisp one-hundred dollar bill, no matter how much the meal cost.

In 2015, they both passed away.

So did they run out of money while having all of this fun?

What was their account balance based on historical index returns at the end of their life?  $2,056,427

They started with $500,000, spent $625,000 over 25 years and died four times wealthier.

Be Blessed!


1- as measured by the S & P 500

2- as measured by the Barclay’s Aggregate Bond Index

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings.

The value of fixed-income securities may be affected by changing interest rates and changes in credit ratings of the securities.

 Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. Indexes are unmanaged portfolios and individuals cannot invest directly in an index.  Actual results will vary.

This communication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any securities or product, and does not constitute legal or tax advice. The information contained herein has been obtained from sources believed to be reliable but we do not guarantee accuracy or completeness. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel

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