Tuesday, April 20, 2010

You Can't Serve Both God and Mammon

When I try to come up with how many years it’s been since I moved to Miami, or how many months I’ve lived in the Treehouse, I realize I’ve measured my days and years by my relationship with Andi. Those sixteen years are frozen in time, and I'm constantly surprised that life has gone on.

Tax-time. Married, filing jointly? Married, filing separately? The question carries an emotional weight it never has in the past.

Like good little troopers who will never see the kinds of salaries some take for granted, Andi and I planned for our retirement early. The money you save in your twenties is worth exponentially more than the money you save in your thirties, etc. etc.

What a scam.

We diversified, we took expert advice, and our retirement funds were only worth 64% of what we paid into them. Planning to retire at age 55, we lost 46% of what we could have saved just stuffing the money into a mattress.

Only we didn’t lose 46% percent. Because we dissolved our retirement funds early, we were penalized by losing almost half of what our account was worth. Andi and I were left just 38% of the money we gave our broker. We split it 50-50.

What else would you do in a divorce with money you’d been saving together for a mutual retirement? Say, let’s not touch that money and hope we can tighten our belts for the next few months getting set up on our own. See you in twenty years and we’ll split the proceeds. I’m sure financial advisors do the math on divorce rates and salivate rather than advise separate retirement accounts.

Ameriprise Financial made everything look so good on paper. Ultimately, we lost 62 cents of every dollar we gave them. This doesn’t include interest we would have made with the money in a plain old savings account.

If I’m less up in arms than perhaps I should be, there are two reasons. First of all, there’s a measure of guilt. We swam in deep waters, waters beyond our scope. We should have left investment portfolios to the six-figure folks who understand them.

Whether this is true or not doesn’t matter; the feeling of foolishness is real.

Secondly, I used percentages because the actual amounts involved are less than impressive. A percentage allows you to view my frustration with investments which didn’t pan out through the lens of your own financial strata. In truth, after first-and-last-month’s rent, a security deposit, and filling the Treehouse with Ikea, I had a thousand-dollar cushion in the bank.

I worked my way into middle-management, basically all you can get with on-the-job experience that doesn’t require a college degree. I stepped out of it to devote more time to writing, and I became much happier. Poorer, but much happier.

I just sometimes wish I had a little bit more greed in my makeup.

4 comments:

  1. This one echoes strongly with me.

    Losing my job last year cost me £173,000 over ten years just in basic payments to my final salary pernsion, never mind lost income and potential return from a 'save as you earn' share options scheme. The net result for me will be a maximum pension less than 45% of what it would have been, causing a major adjustment and rethink to our future plans and the reality of applying for jobs at more than 30% less income than I was previously on. We won't be able to do what we always dreamed of doing and buying a small second home abroad to move to in our retirement without severing all our ties with home.

    regards....Al.

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  2. Man oh man. That's really rough, Al.

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  3. It's a pain in the arse when your fifty and can't get an inteview even for any of the shitty jobs on offer......

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  4. That is one of the WORST feelings, interviewing for a job you don't even want.

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