Retiring on $1 Million is Not Enough

Why savers are losers and spenders are winners in the modern economy

When it comes to getting rich, so-called experts are full of advice on how to save your way there. There’s no shortage of articles about couples who saved their way to $1 million or “expert” tips on how to save more money.
And these articles are true. You can save more money following their advice. But you have to consider the cost. Because the saver mindset is a very different and dangerous mindset about money than how the rich think about money.

All you need is a million?

Take for instance the couple, Carl and Mindy, who saved $1 million on four years. Their instincts were right.
“I was having this horrific day at work,” 42-year-old computer programmer Carl told Farnoosh Torabi on an episode of her podcast. “I was 38 at the time, and I'm like, 'There's no way I can do this until I'mr 62 or 65 or whatever age people normally retire at.”
Many people feel trapped in their jobs but do nothing about it. Congrats to them for taking action. But in the end, it is still the action of a poor-person mindset about money.
The couple started by analyzing their spending habits. “My wife and I wrote all of our expenses in a book,” Carl explains on their blog. “Every time we returned from shopping or paid a bill, we logged it.”
Based on their logs, they determined they could live on $24,000 a year. To be safe, they added a $6,000 cushion and bumped that estimate up to $30,000 a year.
To get there, they decided they needed $1 million saved up to retire by age 42. To achieve this, they did the standard saver playbook: they downsized and cut expenses, while working side jobs and investing in their personal residence and the stock market. read more



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