Five People, One Income, and Self-Made Success

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Myth: If you’re supporting 5 people on 1 income (and it’s not a high income), you’re screwed. You’ll never become a business owner or an investor. You’ll be lucky just to pay the bills.

Fact: Ladies and gentlemen, meet success story: Rental Randy.

In my last blog post, I re-emphasized that the best way for two-income couples to turbocharge their savings and investments is to live on one persons’ income, and save 100 percent of the others’. Live like you’re a one-income couple.

This led to a great follow-up question: What if you’re already a one-income family? Specifically, what if you’re a family of 4 or 5, living on one income? What then? (And what if you’re single — a “family of 1″ living on one income?)

Here to answer that question is an Afford Anything reader named Randy, who supports his family of 5 on a single income … and still bootstrapped his way to becoming a successful real estate investor.

Here’s his story, in his own words, completely unchanged / unedited:

Five People, One Income, and Two Years of Savings

I have three children and did not buy my first income property until after my youngest was born. My wife does not share my drive to prepare for our future, which means she does not contribute financially to this cause. I pay the majority of the family bills and I do not have a high paying job. Still, I managed to save enough to get my first property. It took two years of saving every dime (literally) I could.

I have an unconventional life and job and work odd hours so I could be a stay-at-home Dad and primary caregiver for our children. It means I have to live off 4-6 hours of sleep a night and be a walking zombie some days, but that’s okay. I did it primarily so our kids would have a parent looking after them and not a day care employee, but I can’t lie and say the money saved wasn’t a small part of that choice.

You have to start. Just start.

One year, I decided to open a Rental House savings account at my bank. I started with about $25. Every chance I got, I deposited money in that account. Tax return? (having a mortgage and three kids helps there) Straight into the Rental House account. Xmas Gift money? Sorry kids and wife, but no big ticket gifts this year or the next. That money’s going straight into the Rental Home account. Friends want to meet at the local bar/restaurant and have fun? Sorry guys, I can’t go out until I buy an investment property. That’s $30 into the Rental House account.

I didn’t choose to buy a home that was outside my budget — say, the type of home/neighborhood you or I might choose to raise our children. That would be setting myself up for failure. Besides, it offers a sort of built-in excuse for not accomplishing my goal. I chose a price point that worked for me, went to the real estate websites, and searched for properties I could afford.

Then, after I’d saved a few thousand dollars, I went to my bank and asked how much money they would loan me. Remember, I don’t make a ton of money. I was disappointed when the bank offered $10,000 less than I wanted. No problem. I lowered my Rental House budget and kept searching. I found a property that needed a little bit of repair. Between the money I’d saved and the bank loan, I bought the property, fixed it up, and had it rented in two months.

I don’t view the rental income as “income”. It all goes to paying down the debt. The sooner I pay it down, the sooner I can buy more properties. Both my homes are owned free and clear, though I have a few thousand to pay back on a line of credit I used to help fix the second property. Also, I have a bank lined up to provide a HELOC on one of my rental houses. I will use that money (and some of my own savings) to buy my next property.

It can be done. You just have to start. Now. You don’t need a detailed plan initially. Just start saving. Now.

Savings Happens in Small Increments

Boom! Drop the mic!

That was awesome. Thank you, Randy, for sharing your story with the Afford Anything tribe. You rock.

Here are some key takeaways from Randy’s story:

#1: Savings Happens in Small Increments.

It’s tempting to get shell-shocked by a large number. “I need to save $12,000? How on earth can I come up with that?”

But savings unfolds in tiny increments. You save $10 or $20, again and again, until you reach your Mega-Number-Goal.

(It’s like burning calories — you burn an extra 50 calories here, an extra 70 calories there. And pretty soon, these tiny increments have added up to 3,000 calories, and you’ve lost 1 pound.)

(Or, conversely, you nibble on an extra 40 calories here, an extra 80 calories there, and soon you’ve gained 1 pound.)

When people say that they can’t trim their budget any further, my response is:

  • Do you buy red meat, like beef or pork? Swap it with beans/lentils or possibly chicken, and you’ve lowered your grocery bill by $20 – $60+ per month.
  • Do you pay someone to cut your hair? Start trimming your own, and you’ll save $10 – $50 per haircut, depending on the “caliber” of salon you’ve been frequenting.
  • Do you buy orange juice, cheese, and other packaged foods? I love juice, and I used to buy a ton of it. But when I was saving for my round-the-world trip, I knew I needed to cut back. Each time I shopped, before I hit the checkout aisle, I’d put back any juices in my cart and devote that money to my Travel Fund. (I literally kept an envelope with me, marked “Travel.”) That meant I saved an extra $6 each time I hit the store — about $24 per month, or $288 per year. (And these days I make my own fresh juices / smoothies at home.)

There are always ways that you can save more. Remember: there’s a difference between “I can’t” vs. “I choose not to.”

#2: Your Goal is Investing (Earning), Not Saving

Frugality is the first step — not the last.

Nobody penny-pinches their way to wealth. If that were possible, the most miserly, cheapest SOB’s would be billionaires. But they’re not.

Instead, the (self-made) millionaires in our society are the people who build valuable businesses and invest in cash-flow machines. That’s where you focus needs to stay.

Frugality is a means to an end; it’s the method by which you raise your initial investment money — your “seed” money. But you can’t stop there; you need to move to the next step.

Notice that Randy didn’t penny-pinch … and then let his money fester in a savings account. Instead, he bought an asset which will give him monthly cash flow for the rest of his life.

#3: Reinvest Your Profits

Here’s where the magic really happens:

Randy will reinvest the equity from Rental House #1 (plus his “day job” income) to buy Rental House #2. And I’m betting that he’ll use the equity/cash flow from Rental Houses #1 and #2 to purchase #3.

Do you see where this is going?

This is classic “the rich get richer.” Instead of spinning around on the time-for-money-exchange (known as a J-O-B), you create profits — and use those to create more profits.

After a few cycles of this, Randy won’t need to use his “day job” income to buy houses anymore, and he won’t need to appeal to banks. Instead, his houses will start buying more houses.

And at that point, you’ve really won the game.

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I’m Upside-Down on My Home. Should I Rent It Out? Or Sell It?

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Should I Rent Out This House?An Afford Anything reader recently emailed me about this dilemma:

He’s upside-down on his home. He owes more than the house is worth.

But he wants to take advantage of today’s low housing prices, which will let him move his daughter into the best school district in town. He can put 10 percent down on a new house in a fantastic school district.

He’d lose money if he sold his current home. There are only two ways he can sell it: either bring cash to the closing table (i.e. pay extra to get rid of it!) or process an excruciating short sale, which would destroy his credit.

Both of those choices are off the table. He wants to rent out his current home until the market recovers enough that he can sell it. But is this a good idea?

Check out the details:

MONTHLY INCOME
Rent:
$1,600

MONTHLY EXPENSES
Mortgage + Association Payment:
$1,200
Vacancy: $100 *
Repairs, Maintenance: $50 – $100 **
Property Manager: $100

Total Expenses: $1,450

This leaves him with $100 – $150 per month in cash flow.

Hold On, Where Did You Get Those Vacancy / Maintenance Numbers?

If the house is vacant one month per year, we can average that out to a monthly vacancy cost of $100. Of course, if it sits vacant for 3-5 months, he’ll be sweating.

The “rule of thumb” is that maintenance will cost 1 percent of the purchase price of the house. Of course, that’s a long-term annualized average. It includes rare, expensive repairs like replacing the roof every 20-25 years and re-painting the siding every 5 years.

Since he has an association payment, I assume his homeowner’s association takes care of all exterior maintenance. That brings his maintenance costs down. (Well, really, it just lumps his maintenance costs into a different category).

Assuming his house is in good condition, his big maintenance costs will rare but costly events like replacing the water heater, buying a new refrigerator, etc. He won’t literally pay $100 every month. Like his vacancy costs, this maintenance cost is a long-term average over the span of many years.

He reported a property management fee of $100 per month in the email that he sent me. That seems rather cheap (it’s only 6 percent of the rent), but some property managers will charge a cheaper fee in a neighborhood with higher tenant quality, so I’ll accept that premise at face value. (Some property managers charge one month’s rent as a “placement fee” for finding a tenant, which is NOT included here.)

So What Do You Recommend?

Here’s my advice:

#1: Use your $100 – $150 monthly cash flow to build some cash reserves. Use this to cover the mortgage payments when your house sits vacant. Vacancy is your single biggest risk, because you’ll have to cough up the cash for two mortgages (your rental house and the home you live in). Strong cash reserves are the single biggest weapon you have against this risk.

#2: Add even more money to those cash reserves so that you can quickly write checks for repairs and maintenance. What if the house sits vacant for 4 months, a tenant moves in, and a week later you need to call a plumber? Cash reserves will help you sleep better at night.

#3: Don’t even think about making “extra” mortgage payments before you have huge cash reserves built.

I’d recommend a minimum cash reserve of 6 months of mortgage payments, and an optimal cash reserve of 8 to 10 months. That way, if you deal with an extended vacancy, you’ll be able to cover the mortgage.

Many landlords “shoot themselves in the foot” by panicking about a vacancy and renting out their home to the first willing tenant that comes along — even if their gut instinct says it might not be a good tenant. That always leads to disaster.

If you have cash reserves to deal with a vacancy, you can take your time and wait for the right tenant — a good tenant — instead of accepting the first person who’s willing to move in.

One of my houses has been vacant for almost three months. (It’s the $21,000 foreclosure, which is in a part of town that doesn’t always attract — um — the most qualified candidates). I’m guessing that the house might sit vacant for four or five months before I get someone in there.

But here’s the thing: Several people said they’re interested in moving in. But none of them have met my tenant criteria. It’s nice to be able to hold out and wait, so that you’ll eventually get the right tenant, not the first one.





The 5 Lessons a Millionaire Taught Me

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The 5 Lessons a Millionaire Taught MeWhen Richard Evans was a little boy, his father fell down a stairwell, shattering the bones in both of his legs. The injury left his dad unable to work for a year, forcing Richard’s parents to sell their home and squeeze their family of 10 – two adults, eight children — into a three-bedroom rental.

Richard vowed to become wealthy during that tough year. He wanted to give his children the financial security that he never had.

He didn’t know it at the time, but he had just taken the first of five steps towards wealth. The first step is the simple act of choosing to be wealthy. Believe it’s possible; commit to making it happen.

Evans’ book, The Five Lessons a Millionaire Taught Me, describes the steps that lead to wealth:

#1: Decide to Be Wealthy
“A dentist friend once told me: ‘Those who don’t think about their teeth (early in life) are those who later in life spend the most time thinking about them.’ It’s no different with money.”

… “the people I know who are the most obsessed with money are not millionaires … (they) are the ones who are living paycheck to paycheck” …

“To be in great fiscal health is very much like being in great physical health: it allows you to do more and be more, and it permits you to live your life free of constant pain and bondage.”

#2: Take Responsibility for Your Money
This step involves knowing three things:

  • Know how much money you have. What’s your net worth?
  • Know where your money comes from. Track every tip, bonus, and interest payment. Record the small amounts that normally slip through your fingers, like checks you get for your birthday, dividends from your index funds, and money you get from rewards credit cards.
  • Know where your money is going. Your car, for example, doesn’t just cost the sticker price; it also costs insurance, repairs and registration fees.

#3: Keep a Portion of Everything You Earn
He recommends keeping a minimum of 10 percent of your regular paycheck, plus 90 to 100 percent of your side income.

#4: Win in the Margins
“The most money I’ve made in my lifetime was on a side project,” he said. “(But) it wasn’t my first venture. It was my fourteenth.” In other words, keep your day job, but always look for ways to earn more on the side.

#5: Give Back
Generosity feeds the soul. Give financially to good causes that have a proven track record of properly handing money. In addition, teach others the principals of becoming wealthy. It’s through teaching that we learn.

Should I Read This Book?

This is a quick read, with less than 100 pages of large font. I finished the book in one sitting.

The lessons are basic, and they’re designed to be inspirational / motivational rather than informative. In other words, this book is designed to get a financial novice excited about the possibilities that lay ahead.

This Book is For You If: You want to give a gift to someone who isn’t interested in money. This is a motivational book for beginners.

This Book is NOT For You If: The intended reader is an “advanced student” of money or is looking for specific, actionable information, such as how to set up a Roth IRA or diversify a portfolio.

The 5 Lessons a Millionaire Taught Me is only $5.98 on Amazon, with free shipping. Check it out!


What Chris Rock Knows About Money

Being wealthy is not about having money, it’s about having options.

- Chris Rock


It’s popular to harp on celebrities who have blown all their money (Lindsay Lohan, anyone?), so I’d like to dedicate a post to commending an unlikely hero of smart money management: comedian Chris Rock.

Raised in a working-class neighborhood of Brooklyn, Chris Rock rose to fame in the basement comedy clubs of New York before taking the television and film world by storm. He hosted the Academy Awards, released four bestselling comedy albums and held roles or cameos in 37 movies.

His success earned him millions of dollars and the opportunity to be heard by fans around the world. He puts his money where his mouth is — and his mouth where his money is.

What’s so remarkable about Chris Rock?

1) He knows the difference between rich and wealthy.

Rock defines this as the difference between being a highly-paid employee and being the company owner:

“Shaq is rich. The guy who signs his checks is wealthy.”

2) He knows money is for opportunity, not a flashy lifestyle.

One of my favorite quotes about money — the best line that summarizes Afford Anything’s lifestyle philosophy — comes from him:

Being wealthy is not about having money, it’s about having options.

If you’re chasing money for the sake of buying a bigger house and a nicer car, you’re missing the point.

If you’re cultivating wealth so that you rule your life — so you’re never stuck in a job you hate, so you can launch that cupcake business you’ve always dreamed about, so you can spend a year volunteering with lion cubs in Tanzania — you’ve got options. That’s the whole point.

3) He devotes his wealth to helping others.

His wife runs a nonprofit salon that gives free hairstyles to women exiting welfare to re-enter the workforce. They’ve been married for more than 15 years and live in a quiet New Jersey suburb.

4) He preaches about the dangers of debt.

He’s currently working on a documentary entitled Credit is the Devil.

He told Reuters News Agency that he was inspired to make this movie because he sees that when people are in debt, they’re forced to make bad choices:

You can trace almost every bad act in this country and the world to people’s financial status at the time.

And while he’s not known for being religious, he starts sounding like his grandfather — a preacher — when talking about debt:

Credit and debt is the root of all evil.

Of course, he wouldn’t know from experience. Rock says he’s never been in debt:

I’ve been lucky. I made money early on, and I don’t spend.

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Sources:

Men’s Health magazine, The 20 Smartest Things Said About Money

Reuters News, Chris Rock sets comic sights on devilish credit

Photos courtesy Rolling Stone magazine and Babble.com

Can You Afford a Mistress?

Apparently the economic boom in China is convincing men they can afford anything they want, including multiple mistresses.

Historically only the wealthiest Chinese men could afford legions of mistresses and concubines. Cultural attitudes towards cheating husbands were permissive — if he’s successful enough to afford two women, he deserves them both, popular thinking dictated. Emperors, noblemen and the most prestigious businessmen were renowned for their harems.

Literature and the arts conjured fairy-tale images of joining an alpha-male’s harem: the classic Chinese novel Dream of the Red Chamber tells the story of a Qing dynasty concubine who collects so much money that her entire family becomes fabulously wealthy. Thanks to her earnings, her brothers are even able to afford their own concubines, according to a write-up in TIME Magazine.

The modern-day economic boom is creating a resurgence of mistresses and concubines in China, the article says:

They have this traditional idea that having more women equates to being more successful,” says Li (Yinhe, a researcher at the Institute of Sociology at the Chinese Academy of Social Sciences).

And many women share the same sentiment:

“I’d rather cry in the back seat of a BMW than smile on a back of a bike,” is the common attitude of a certain segment of young girls when they are looking for wealthy partners.

Even China’s online dating websites cater to it:

… women cannot search for potential mates by common interests or hobbies, but they can select whether they require their prospective partner to have a house and a car, as well as the minimum salary level they would find acceptable.

Although the TIME story detailing this is entitled Can Education Curb a Mistress Epidemic?, the most desirable women are beautiful ladies with the best academic track record — the Chinese equivalent of a Barbie with a Harvard degree:

A recent online exposé revealed a (mistress) agency in Shanghai that provided a menu of potential college-student mistresses … The annual maintenance fees ranged from just $3,000 for students in less renowned schools to about $26,000 for students from the best campuses.

That’s right, ladies. Study hard, get good grades, so that you can become … a high-class mistress. I wonder what kind of grades you need to get promoted to “wife?” (Insert sarcasm here.)

Let’s hear from the readers — what do you think of the mistress epidemic? Is it a sign that women’s rights haven’t progressed as far in China as they have in the U.S. — or are the Chinese simply more open and accepting of the “golddigger” reality?

Source: Can China Curb a Mistress Epidemic?, May 18, 2011, TIME Magazine

4 Shockingly Simple Tips That Can Save You $40,000

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Whew! Writing a guide to saving $40,000 sure sounds like a tall order …

… but it’s not. It’s shockingly simple.

The truth about investing is that it’s not hard or complicated — unless you want it to be.

Sure, you could delude yourself into believing that you’re going to “beat the market.”

You could devote your days to pouring over SEC filings and reports, analyzing debt-to-asset ratios, and comparing the 12-month trailing P/E to the increase in dividends paid each quarter  …

(Eyes glaze over).

… but if you go this route:

  • You’ll take larger risks
  • You’ll be unlikely (over the long run) to make better returns than the market average
  • AND you’ll miss out on life in the process. 

It’s a lose-lose-lose situation.

Which makes my job simple: to teach you the most critical basics, so your money can make money.

Then you can move on to more important things in your life.

Divide Your Money Between Stocks and Bonds According to Your Age.

Here’s a simple rule of thumb:

110 minus your age = the percentage of your portfolio that should be in stocks.

If you’re 35, this means 110-35= 75% of your portfolio in stocks, and 25% in bonds.

If you have a high risk tolerance, increase that to number to 120 minus your age. If you’re 35 and you have the stomach to withstand more volatile returns, and you’re 35 years old, put 120-35 = 85% of your portfolio in stocks, and 15% in bonds.

If your risk tolerance is low, drop the number to 100. If you’re 35, 100-35 = 65% of your portfolio goes to stocks, and the rest to bonds.

Figure out your risk tolerance here: Take this quiz.

Avoid Individual Stocks

Remember that nonsense I was babbling about in the intro … SEC filings, debt-to-asset ratios?

Yeah, I’m trying to forget it too.

Avoid buying individual stocks (Apple, Google) unless you’re willing to spend your Saturday afternoon researching that information.

When I tell you to “buy stocks,” I don’t mean individual stocks … I mean baskets of stocks, such as mutual funds, index funds, or ETFs.

Which leads perfectly to my next point …

Avoid High-Fee Funds.

Pop quiz: What’s one of the biggest investment mistakes investors make?

Answer: Ignoring the fees associated with a mutual fund.

This money silently, quietly seeps out of your portfolio. You never get a bill in the mail. You never pay it upfront. And so you never realize just how many thousands of dollars you pay for a high-fee fund vs. a low-fee fund.

Scenario 1: Let’s say you have $50,000 to invest in your account. You put it in a mutual fund and leave it there for 20 years. But you don’t check the “expense ratio” (a fancy word for “fee”), and as a result, you’re in a fund that charges a 1.19 percent fee — the industry average, according to Vanguard.

At the end of 20 years, you’ve paid a whopping $49,621 in fees.

Look closely at that number — that’s almost the same amount you invested to begin with!! (But you don’t know you’re losing it, because you never have to write a check … this fee is just silently, quietly deducted from your overall portfolio, in small amounts at a time.)

Scenario 2: Now, let’s say you have $50,000 in your account. You put it in a mutual fund and leave it there for 20 years. You DO check the “expense ratio” and find a fund that charges only a 0.23 percent fee.

After 20 years, you’ve paid $10,489 in fees. You’ve saved $39,132.

Stick with Passively-Managed Funds, not Actively-Managed Funds.

There are two types of mutual funds: active and passive.

An active fund is managed by a group of (usually) Ivy League MBA’s who have convinced themselves that they can do what no human being has ever done: consistently beat the broad market average.

In fact, active fund managers are so convinced that they’re smarter, stronger and better than everyone else they’ll charge you a hefty premium to manage your money. (This is where the high fee comes from).

Then — this is where it becomes a horrible deal for you — they collect their hefty premium whether or not they actually beat the market average.

(And, statistically, they don’t).

Put your cash in a passively-managed mutual fund. This is a fund that tracks a broad market — like the Total World Stock Market, or the S&P 500, or the Russell 2000 — without charging you high fees.

What’s an Index Fund?

The king of all passively-managed mutual funds are called Index Funds.

Index funds track an index within the market and deliver returns that mimic the overall market performance.

“They do wha??”

They make sure that your investments perform AS WELL as the overall stock market. No better, no worse.

“Cool, got it. Thanks!”

Want to invest in the entire U.S. stock market at once? There’s an index fund for that. Want to invest in the entire globe? There’s an index for that too. How about investing in the small companies of the U.S.? Yep, there’s an index for that.

If you’re invested in a U.S. stock market index fund, and the U.S. market rises 8 percent, your portfolio rises 8 percent.

With one caveat, of course. You’ll have to subtract a small fee.

This fee — the “expense ratio” can be anywhere between 0.05 percent to 0.20 percent.

Sound bad? No one likes these. But 0.05 percent is much better than paying those hefty 1.01 percent fees that actively-managed funds charge.

What’s an ETF?

Index Funds became so popular that they spawned Exchange-Traded Funds, or ETFs.

This type of fund has grown more in popularity over the last decade than any other fund.

It’s done so for good reason: functionally, it does exactly what an Index Fund does (track a broad index of the market), only it has even lower fees than index funds.

Better yet, ETFs have no minimum requirement (if it’s trading at $25 per share, and all you have is $25, you can buy one share). Index funds, by contrast, have a minimum requirement to get started — usually around $2,000.

The low fees, and the lack of a minimum opening amount, is because ETFs are technically not mutual funds — they’re registered, under the SEC, as baskets of stocks that can be traded real-time throughout the day.

This means that day-traders out there are buying and selling ETFs multiple times a day, hoping to “beat the market” (the greatest delusion in the history of Wall Street).

Those guys who are day-trading, paying fees and commissions with every transaction, subsidize ETFs for the rest of us. That’s why ETF’s have the lowest fees of all. Thanks, dudes!

Here’s the takeaway lesson: The best way to invest in the market is to buy commission-free ETFs. These have low expense ratios, they perform at the market average, and they’re free to buy and sell.

Which ETFs Should I Buy?

This brings us to the topic of asset allocation (otherwise known as “The ONE Thing You Should Know In Order to Get Filthy Rich.”) Click that link to read more …

The Surprising Reason I Read AARP Magazine … In My Twenties

What will you want to cultivate?

Guess what magazine I’m always reading?

If you guessed something targeted at 20-somethings or 30-somethings, you’re wrong. I love AARP magazine — the bimonthly publication of the American Association of Retired Persons.

It shows up in the mailbox at my 70-year-old parents suburban home, but I steal it away to my city apartment and devour it page-by-page. My parents never even get a chance.

But I’m 27 years old. Why the enthusiasm to read a magazine aimed at seniors?

Quite simply, its because AARP Magazine is a window into the future: it discusses the issues that we young ‘uns have in store for us, whether we realize it now or not.

By knowing what will weigh on our minds 50 years down the road, we can better prepare today.

What gets discussed about in every issue? Two main topics:

  • Health
  • Wealth

That’s it. Almost every article is devoted to one of these two topics: your health and your money. Which, by the way, are intricately related.

“Health” encompasses the broad spectrum of healthy living: from diet and exercise to living a purpose-driven, inspirational life.

This blog spends a lot of time talking about the similarities between managing weight and managing money: both are psychological. Both are avenues in which a little effort goes a long way. Both can get tougher as you get older.

“Wealth” encompasses your personal balance sheet: your assets, your liquid cash, your investments. On the surface, Afford Anything is centered around wealth creation. Beneath the surface, Afford Anything is really about living a life that’s financially free.

AARP is an association of “retired” persons, but we’re redefining retirement. It’s not a mode you slip into at age 62 or 65. Retirement happens on the day you no longer need to work for money. The day your passive income sets you free. The day you can live purely from your investment returns.

That might happen at age 30. Or age 40. Or age 72.

Work towards financial freedom. Redefine retirement, and experience financial freedom throughout your life. When you’re a senior, you won’t have regrets.

Oh yeah — and if AARP is any guide, we might want to be monitoring our blood pressure, too.

You Are Not Entitled to Retirement, Dude

Will you work during your sunset years?

If I had a dollar for every “retirement” book, article and website out there, I’d be a millionaire many times over.

Promoting the concept of “never work again!” has become a booming multi-million dollar industry, employing thousands of people (who are, no doubt, awaiting their own retirement).

Retirement is such a part of our cultural fabric that it’s viewed as a basic human right.

It’s the final chapter in the American Dream: a home, a family, a secure retirement.

But it hasn’t always been this way.

For much of American history, people simply worked until they were too sick to work anymore. The idea that a healthy person would voluntarily stop working — regardless of their age — was considered an extravagance privy only to the ultra-rich.

American culture changed after World War II. Retirement shifted from a luxury to a basic right, an entitlement of age. Corporate pensions, coupled with government Social Security, put retirement within reach of every American worker.

Now culture is shifting again.

Corporation pension funds shrink, Social Security bounces towards bankruptcy, life expectancy grows longer, and people in their 60’s and 70’s remain healthier and able to work.

Retirement is no longer an”entitlement.” It’s a “luxury.”

And it’s one that you might not get …

 … unless you grab it by the reins.

This is at the core of the Afford Anything Philosophy: freedom is yours, but ONLY if you’re a true rebelIf you’re part of the Conformist Masses, you’re out of luck. (Read that post to see what I’m talking about.)

Retirement is not a God-given right. With Social Security in question, pensions disappearing, and your own life expectancy growing, you cannot expect retirement on a silver platter. If you wait even to age 30 before you start planning for it, you’re behind the game.

You can’t depend on Social Security to be there for you. Hope for the best; plan for the worst.

Want to ditch the cubicle and live in financial freedom? Join the revolution.