America - the land of the poor!

Rich country... Poor people

The US is among the world's "richest" countries when defined by a Gross Domestic Product per capita of $51,248. Only 6 countries are considered wealthier. However, for such a wealthy country we seem to have some pretty poor people.

Consider the following statistics for the "average American family" (source: Statistic Brain - Poor Americans)

• Average amount saved for retirement - $35,000
• % of Americans not saving for retirement - 40%
• % of Americans with no retirement savings - 25%
• % of Americans "very confident" about having enough money for retirement - 18%

Without a doubt then we are the world's superpower, right?!?!?

$5,179,358.03

The above? That is the estimated, minimum liquid net worth (liquid assets less all liabilities; in other words not factoring equity from my home or rental properties) I would need to see in order to quit my job tomorrow. Suffice to say I am going into the office on Friday! 

What’s your magic, early retirement number? (Please participate in the poll below and check back for how much people think they need for retirement)

Forget my actual number for a moment (I am sure it is wrong). Have you ever sat down and asked yourself what it would take to retire tomorrow? It is a daunting task. Technically I am more than 25 yrs away from retirement which seems like a long time to amass $5,000,000. Thankfully I am not starting from zero. However:

a)     we are a single income family (my wife is a kick-ass stay-at-home mother of one),

b)     college tuition estimates for 2030 are offensive (up to $350k for just 4 years of Ivy, ~$100k for state school) - something has to give here!

c)     while healthy today, healthcare costs are a tad out of control (I can’t be too critical since my income is directly tied to the industry)

d)     the odds of Social Security being around when I am expected to retire are laughably low, and

e)     although genetics aren’t on my side, my ultimate demise is very much unknown

Although I am fairly financially literate (I keep a quarterly spreadsheet tracking my family’s net worth), have a fairly detailed budget,  and manage my own stock portfolio (I worked on Wall Street for 5 years for whatever that is worth), I have not thought much about an early retirement until recently. I’ve always said I’d quit my job tomorrow if I could. Until now, I didn’t have any real clue on what that would take.

$100,000 per year isn’t too tough to spend during retirement

Using my current situation as a guide, in 25 years time our annual expenses could be (assumes 2% annual inflation):

• ~$29k for real estate taxes
• ~$30-35k for groceries (assuming my wonderful wife continues to cook as much as she does)
• ~$10k for utilities, maintenance, etc
• >$10k for health insurance

So that’s conservatively $85k in largely fixed costs and I’ve yet to buy my wife anything for her birthday, an anniversary, or just a “your wonderful” gift. Nor have we travelled, dined out, bought any new clothes or donated to charity. Sure we’ll probably downsize our house some day and can do other things to reduce the burden but blowing $80-100k/yr in retirement doesn’t seem too challenging.

We only need $2.1m once I turn 65, but…

So I retire at 65 and for arguments sake let’s say my wife and I live to 86 (to experience our golden anniversary). So: $100k/yr x 21 yrs in retirement = $2,100,000

So why do I need $5,100,000? Well I just turned 39 so to retire tomorrow we would need at least another $1,950,000 to get us through the 26 years of “early retirement”. This figure doesn’t include paying for college tuition and other niceties.

Thankfully my wife and I discuss these things and we are working together to get to an early retirement. So I ask you - what is your magic number?

The Narrowing Airline Seat Epidemic (Obesity)

Look around… it’s everywhere (unfortunately)…

I’m on a plane and in front of me are 3 seats. Closest to the window is a woman – 5’6” tall and at least 235lbs. Next to her is a guy, 5’8” and every bit of 260lbs. Adjacent to him is the unfortunate, 5’6”, 140lb guy who is unhappily sharing his seat with his neighbor and as a consequence is forced to hang into the aisle. Relative to this trio the guy next to me, who could easily drop 40lbs, seems to be doing quite well. Only 5 more hours to go on this flight from San Francisco to Newark!

You may know where this is going already… I disdain obesity. It’s sad, disgusting, and largely unnecessary and one of only two things I potentially dislike about people (the other is smoking). I know it’s wrong to judge but I am human. I know it’s considered politically incorrect to some to have an opinion on this subject but I do.

Let’s be clear on my perspective

Granted, I have family and friends who are overweight and in certain cases obese. I love many of them deeply. Being overweight doesn’t define a person, nor should it in my view. However, when 1 in 3 people are obese (BMI>30) and 2 in 3 are overweight, we have a HUGE problem.

Perhaps most depressingly nearly 20% of kids (ages 2-19) are obese. I get sick when I type that statistical fact. My son just turned two yesterday and I can’t imagine him having a weight problem.

And the #1 reason these statistics bother me so much is that being overweight/obese is among the leading causes of preventable death.

It’s nurture, not nature

So is this issue Nature (genetic) or Nurture (behavioral)? My view – largely nurture. Yes we are all not created equal (although ~ 99.5% of our DNA is identical), and yes a minority of people have issues largely outside of their direct control. But do all of the staggering 67% of overweight and 35.7% obese adults in this country have these challenges?

Got a bad back? Get into a pool and eat better. Don’t have enough time? Watch less TV, go for a walk and eat better. Drink diet Coke to be healthy? Drop that (sweeteners often give people cravings for real sugar-containing foods) and drop the supersized big Mac and fries that accompany that soda.

I don’t have all or many of the answers to any individual’s challenges with weight. Nor am I perfect (far from it). However, one of the great things about being human and living in the US is that we have a choice. Unfortunately many people choose poorly.

Have a weight problem? Change! Easy to say but tough to do! Don’t just “want” something – choose it! Prioritize it. Don’t think it’s possible? Read on…

Neuroplasticity

Neuroplasticity refers to changes in neural pathways, which occur from alterations in behavior, environment, and neural processes. In other words your brain isn’t a static organ - it can change. All you need to know is that you can rewire your brain with physical activity.

The science around brain anatomy and function is extensive and evolving. Fortunately, a friend of mine, Chris Bergland – world record holder (triple ironman, most miles run on a treadmill in 24 hrs) and author – The Athlete's Way - Sweat and the Biology of Bliss - introduced me to neuroplasticity and other physiological/psychological hypotheses related to sports (and life). These have been tremendously helpful in my own athletic endeavors and I'd venture to say helpful in any of yours. Chris also writes a top-rated blog for Psychology Today - The Athlete's Way - which provides a quicker introduction to many important psychological phenomena associated with sport/life. 

So it’s never really too late to play piano, learn a language or play a sport. Of course this takes commitment, persistence, and patience. Do it for yourself, your partner, your family, your friends, your dog, whomever! Pretend there is no tomorrow – do it today!

What’s in it for me?

My beautiful boy turned two yesterday and fortunately everything is as it should be. He is 35 inches tall, weighs 28 lbs and easily has his 50 words and handful of sentences to speak. But like many parents I worry about his future – influence of social media and the Internet, schooling (see my previous post re: Montessori), activity level, etc. 

In terms of physical activity/fitness I plan on doing a few things for both his and my own benefit:

• Continue to support physical activities he enjoys (currently in swimming, sports and Gymboree classes)
• Provide a nutritious diet
• Moderate tv/i-pad time (currently 30 mins daily on average)
• Set a solid example for nutrition and excercise (I recently signed up for a Half Ironman)

Lastly, and most challengingly I plan to have a couple of delicate discussions with those I love who struggle with their weight. I am passionate (not fanatical though) about physical fitness and overall well being. If I can make a difference with just one of these special people in my life then it will be worth the effort.

Have a view on any of this? Please share it with a comment below!