Here's where a focus on finances gets brutally honest. In This Is Not Your Parents' Retirement, Patrick P. Astre asks readers to do a realistic evaluation of assets (those things we own that have value) versus current liabilities, both good debt (a mortgage) and bad debt (of the credit card variety), and all things we "owe." Subtracting liabilities from assets comes up with our net assets, what we're truly "worth." This was a shocking exercise. Here are the sobering results:
Our assets: $373,750 (take into consideration with this figure a home's total worth, not just what I have invested in it), 401(k) and IRAs, savings, car values, valuables, etc. Seems like a lot, but now look at the liabilities: $354,213 (mortgages, a couple's student loan debts, final year of a car payment, etc.). Our net worth comes only to $19,537. The good news here is that we are worth something, that we own property, and that I'm maxing an IRA and 401(k), and planning to build our savings. The bad news is that I have a few years yet to work my way out of those student loans, and I'll probably need more before I'm done my terminal degree.
In one way, I haven't yet gotten to how much to invest, and when to do it. I'm still laying out my financial realities. Astre is right in that knowing where you are is a good start to taking you toward a satisfying end goal: those beautiful 30-plus years in retirement (I know I'm going to live a long existence) when I can live off investments and portfolios while drinking mimosas and reading tawdry paperbacks in my chaise lounge.
One caveat: The book itself is written more for my parents' generation (the baby boomers). This hearkens back to my last entry, when I was complaining about the lack of volume of investment tomes written by women. Now the focus seems to be that those who really need to worry about this stuff are at least 20 years closer to retirement than I am. Hopefully more of us will get interested in our financial futures.
References Cited
Astre, P. (2005). This is not your parents' retirement: A revolutionary guide for a revolutionary generation. No City: Entrepreneur Press.
1 comment:
I like how you are intertwining personal and real world. Since you are going to the library anyway, check out the reference section. There is a subscription called Valu-Line, which describes the business, discusses stock-market trends, and provides a rating for you to decide if you would like to invest. Also, something to think about since you are a teacher and younger – why does our school system still offer Home Economics (only under fancier titles) but does not offer basic budgeting/investing classes?
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