Guilt Money

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Almost everyone knows that they need to be saving more money for retirement. Good advice about budgeting is everywhere. People always feel like they need to be saving more, and they don’t always know how much is enough. That means that the motivator for most people is guilt or fear. But having a clear goal and knowing you are on the right track would be more effective than always combating feelings of inadequacy and dread.

The first steps are obvious. You need to get an income if you don’t have one. Then you need to pay down high-interest debt if you have it. Next put aside enough emergency cash for several months of necessities. After that is the time to seriously consider retirement savings.

You have to decide how big of a nest egg you want to build. There’s a formula that can take the guesswork out of it. Someone once taught me the following definition for wealth:

You are wealthy when your investment income is enough to cover your expenses.

When your investments earn enough to pay for your lifestyle, you are free from needing employment income. This strategy will bring more peace of mind than a strategy that allows you to live off of your retirement account for a certain number of years. The prospect of outliving your retirement money is nerve-wracking. The safe alternative is to plan well enough that you could live off of your investments forever. This doesn’t mean that you have to be super-rich. There are only two numbers that really matter–how much you want to save, and how much you want to spend. So if you want to be wealthy, you can get there by either saving more, or by scaling back your retirement spending. (Paradoxically, the people who learn to live with the least are also the wealthiest).

To make a concrete goal, you need to come up with a number. First decide how much you are going to live off of. You can do that by adding up all your current expenses, for necessities like food, clothing, housing, transportation, and medicine. Alternatively, you can take your current income and subtract the amount that goes to taxes and debt and savings. Either way you should get a number close to how much you consume right now. Don’t include housing in the figure if you will have paid your mortgage before retirement. Then, you can adjust the number downwards if you know you will retire frugally, or upwards to retire extravagantly.

Suppose that you currently earn $36,000 annually, but you think you could live off of $12,000 after retirement. The first thing you should know is that you are going to need to put in the bank a little more than 20 times your estimated budget. So since $12,000 × 20 = $240,000, your savings target is around a quarter of a million dollars, before adjusting for inflation. Once you reach that goal, your investments will produce enough gains to support you forever. That’s going to be attainable as long as you start early. (Some of these calculations require guesses about the future, such as 8% returns, 13% volatility, 3% inflation, monthly periods, log-normal returns and some income elasticity).

The following chart shows the importance of starting your savings young. In the left column, find the number of years until you retire. Then look at the highlighted number across from that. That is the percentage of your retirement budget that you need to continuously save. For example, suppose you are going to retire in about 30 years. The highlighted number in the correct row is “43.3%.” That means that in order to live off of $1,000 per month, you need to save $1,000 × 43.3% = $433 per month.

Years Pessimistic Neutral Optimistic

-2 -1.5 -1 -0.5 0 0.5 1
5 462% 437% 412% 389% 367% 346% 326%
10 228% 210% 193% 178% 163% 150% 138%
15 145% 131% 118% 106% 95.8% 86.1% 77.3%
20 102% 90.9% 80.5% 71.2% 62.9% 55.4% 48.8%
25 76.4% 66.6% 58.0% 50.5% 43.8% 37.9% 32.8%
30 58.8% 50.5% 43.3% 37.0% 31.6% 26.9% 22.9%
35 46.2% 39.1% 33.0% 27.8% 23.4% 19.6% 16.4%
40 36.9% 30.8% 25.6% 21.2% 17.6% 14.5% 12.0%
45 29.7% 24.4% 20.0% 16.4% 13.4% 10.9% 8.84%
50 24.1% 19.6% 15.8% 12.8% 10.3% 8.24% 6.59%

The highlighted column is appropriate if you want to be conservative and assume that the markets will have moderately poor performance. If you feel like you want to be either more optimistic or more pessimistic, then you can choose one of the percentages in the other columns. The numbers from -2 to 0 to 1 in the column headings are a measure of how optimistic you are. Negative, pessimistic numbers are better, because they leave less chance that market conditions will force you to modify your plans.

As you can see, if there are only 10 years until your retirement, you would have to save a huge percentage of your income to meet your goals. One way to make that possible is to tighten your retirement budget to fit what you are capable of supporting. The only other solution is if you have already been contributing to a retirement fund. If you already have an investment account, then use the following chart to calculate how effective it will be. Find the highlighted number corresponding to the number of years until retirement, just like before. Multiple that percentage by the amount you have already saved. That’s the annual stipend that you’ll be able to draw, even if you don’t save any more. For example, suppose you already have $150,000 saved and you retire in 10 years. The table gives a percentage of “6.0%.” Since $150,000 × 6.0% = $9,000, your existing savings will earn you $9,000 annually after retirement. That’s equal to $750 per month. That means that for your total budget of $1,000, you only need to worry about how to get the remaining $1,000 − $750 = $250 per month. Going back to the chart above, you need to keep saving another $250 × 193% = $482.50 per month.

Years Pessimistic Neutral Optimistic

-2 -1.5 -1 -0.5 0 0.5 1
5 4.3% 4.7% 5.1% 5.5% 6.0% 6.6% 7.2%
10 4.7% 5.3% 6.0% 6.8% 7.6% 8.6% 10%
15 5.3% 6.2% 7.2% 8.3% 10% 11% 13%
20 6.2% 7.3% 8.7% 10% 12% 15% 17%
25 7.2% 8.7% 11% 13% 16% 19% 23%
30 8.5% 10% 13% 16% 20% 24% 30%
35 10% 13% 16% 20% 25% 31% 39%
40 12% 15% 19% 25% 32% 40% 51%
45 14% 18% 24% 31% 40% 52% 67%
50 17% 22% 29% 39% 51% 67% 88%

The important thing is to get started. Even if you don’t have a good idea of a realistic budget for your retirement, a rough estimate is better than nothing. The figures above are also only estimates, but they are accurate enough to be useful. Eventually you can talk to a financial planner to get more precise personalized recommendations, and to plan for other variables like a child’s education fund. Meanwhile, if you are following this formula, you know how much of your money is needed for savings and how much you can afford to play with. You can feel peace of mind knowing that you will be able to pay for your retirement plans and you will never outlive your savings.

War Room

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What arguments could possibly have convinced a third part of the hosts of heaven to surrender to Lucifer?

Five people sat around a table in the center of a bare classroom. Nothing in the room marked the passage of minutes, because time itself had not been created yet. A gentleman with bushy white eyebrows and trembling jowls spoke first. “I’m Caleb. I’m presiding at this meeting in place of Samson. He’ll join us later.

“We have allowed Rezin here to be our guest. I bet he wants to give us a missionary lesson.”

Rezin’s wide smile projected a halo of confidence. His mane of hair was arranged in a perfect part. Nobody made eye contact with him yet. “Thank you, Caleb. I’m here to represent His Highness. You should know that we haven’t given up on any of you, even though you rejected the Angel’s Plan and followed after the Opposition Plan. We never give up on anybody, ever.

“You agree with me on most issues. We agree that an earth should be created. That’s been unanimous. We all want to get the most out of the once-ever probationary experience. I’m here because I know I can help you and I want to tell you how to make the earth the best place for you.”

Caleb had been drumming the table and trying to swivel away. “We don’t want to hear about how charitable you are,” he interrupted. “Don’t forget there’s a war on.” He smiled after this demonstration that he was still in charge.

“Then I can get right to the heart of the matter,” apologized Rezin. “The dispute is about knowledge. One side wants knowledge to be free for all. The other wants to guard it, so that nobody on earth would have very much of it. The Opposition Plan would leave people uninformed, but they would still be judged on their choices. Our plan—the Angel’s Plan—is the only one where everyone will understand the entire purpose of their life.”

Caleb interposed again, as if it were one of his responsibilities. “I don’t think they will need such great knowledge. There will be a lot of activities that can be done even with a veiled mind.”

Dan’s commanding voice entered the debate. “I’d like to hear more about that, Rezin. The whole point of the experience is supposed to be to learn more, isn’t it?”

“You’re absolutely right, Dan,” encouraged Rezin, with the energy of a driver boarding a moving stage. “And the more knowledge you gain down there, the more you’ll have when you return back here. Choosing the Opposition Plan is like descending from a great height into a dreary wilderness covered by a mist of darkness.” Dan chewed his lower lip and looked to Caleb.

“That’s all true,” returned Caleb. “On the other hand, the Opposition Plan has other ways to keep people busy. You just do everything you’re told, so you make it back here. Then you can amass all the knowledge there is in the afterlife.”

Jordan raised his hand and opened his small mouth to get the group’s attention. “I don’t know yet whether I’ll be protected if I go with the Opposition Plan. Their leaders have been very convincing, assuring me that everything is for my own good, including my lack of understanding.”

Rezin sighed at this potential recruit. “Yes, there would be a famine of information, and instead there would be riches of misinformation, even lies and treachery and every crime. Tell me, Jordan, have they talked to you about what happens if you make mistakes on earth?”

Jordan quickly answered, “They talk about it over and over. It’s almost all we hear about.”

“They emphasize that because they expect you to make mistakes,” continued Rezin. “They don’t say out loud that they plan on you, individually, being counted as unworthy. But the Opposition Plan is formulated so that each of you is bound to be ensnared during your life.”

Jordan mused, “They say they don’t want anyone to be lost. Still, I’ve been getting the idea that their plan was tailored with more attention to my weaknesses than my strengths.”

“But the obedient ones will be rewarded, and that’s what’s important!” Caleb protested.

“Oh, we ask for obedience too,” consoled Rezin. “The difference is that the Angel’s Plan is fashioned so that everyone receives equal treatment, and no soul will be left behind.”

“We don’t talk about numbers, but I can say that under the Opposition Plan, few people will be counted as righteous,” Caleb reported.

“That’s not what I want to hear about my future probation. I deserve some kind of guarantee that I’m going to succeed,” decided Jordan.

Dan rejoined the discussion. “How is it that everyone will be so better informed in one plan versus the other?”

Caleb responded gravely, “The Opposition Plan doesn’t include as much communication between heaven and earth. Instead, we are going to invent the ‘mystery.’ It means that teachings will be confusing enough that people could ponder them for a lifetime and still not understand them.”

Rezin seized another opportunity. His hand glided over the table. “The Angel’s Plan ensures that everyone will know the same things, and so they’ll agree on everything. That fact alone will make the earth a more peaceful place. Light and understanding will emanate through the world from the presence of the Prince of Angels himself.”

Rezin turned to a stately matron, the one woman at the table, and asked, “Have you got any questions for me, Valerie?”

“I don’t like all this confrontation,” Valerie said crossly. “That’s why I’ll never be interested in switching my allegiance.”

Everyone watched Rezin nod. “It’s disheartening to witness so much fighting. I wish both sides would bury the hatchet.”

Caleb charged into the opening he saw. “I’m not afraid of a fight. Every enemy has weaknesses. Winning people over just takes both perception and perseverance. By the conclusion of the Opposition Plan, you can be sure that every man will bow his knee before my liege.”

Rezin waited, while the silence itself seemed to score points for his cause. “I’d like to paint a mental picture for you, of two worlds. One world is filled with concord, the other with conflict. The first world contains an abundance of unity because of the order that is natural to the Angel’s Plan. The stones themselves are happy to cooperate for the benefit of mankind. The other world, as the name Opposition implies, is a continual scene of violence. People must wrest a living away from the earth, for all species are in competition. Necessities are scarce, so that an honest man can’t acquire food without depriving someone else.”

“How are these contests decided?” asked Dan.

“Nothing could be easier,” explained Caleb. “The only rules would be the physical laws of nature. The mightier party gets to take as much as they are capable of, and the weaker party gets nothing. The heavenly sense of justice would not have to be present.”

“So it’s only with the Angel’s plan that I wouldn’t have to question whether God remembers me,” offered Dan.

“Is it true that there will be so much conformity that we won’t be allowed to make any choices ourselves?” wondered Jordan.

“That’s an unfounded rumor,” dismissed Rezin. “Everyone will control their own decisions. No plan can exist without free will. The beauty of the Angel’s Plan is that you never have to wonder which choice is correct, because the answer will be obvious.”

“That’s different than the intrigue in the Opposition Plan,” countered Caleb. “Not everyone will be told what’s right, and some people who are told what’s right will get conflicting answers. Ethics will be profoundly complicated. Every principle will have an exception. People will figure out how to judge the right way only for their present circumstances. Mingling such diverse world views within a single world is an ingenious invention, which we call ‘agency.'”

Dan scowled. “The Angel’s Plan is more compelling than I ever expected.”

“Yes, I can help if you’ll let me. Valerie, there’s a comfortable place for you in our family,” Rezin implored.

Valerie preached to him, “People who I respect immensely have warned me against your Angel’s rebellion. That includes the Father of spirits himself. I remember that he asked us to be steadfast during this controversy. I don’t have to hear any more arguments, because that will always be my highest priority.”

Concern clouded Valerie’s brow when Caleb scolded her, “That much reliance on others is a dangerous foundation for building your entire future, if you ask me. I don’t like our followers to be so helpless.”

“I understand you, Valerie,” confided Rezin. “I have seen many souls who joined our side out of respect for our Prince. They know that Lucifer is a formidable leader. I imagine that he even exemplifies the best characteristics you depend on in your role models.”

Samson entered the room, causing the conversation to stop. He stood at the table surveying each face. “I hope this experience was profitable for everyone. I admit that it was with trepidation that I agreed to give Rezin and Caleb a forum to evangelize for Lucifer’s plan.”

“Samson, you’re confusing me,” protested Dan, recoiling out of his chair. “Rezin has been explaining the Angel’s Plan, while Caleb has been on our side.”

“Don’t believe a word of it,” chided Samson. “Rezin and Caleb are confederates. Neither of them supports the Savior’s Plan.” The weight of several glares bore down on Caleb.

“Everyone calls it the ‘Opposition Plan,'” corrected Rezin.

Samson was paying more attention to his students than to the visitors. His calm demeanor was contagious. “Whenever one disregards the Savior’s role in the plan, it’s easy to overlook the infinite grace that will sustain us through troubles on earth. All of you must feel confused after this duo’s performance.”

Caleb spoke, but he didn’t sound like the blunderer everyone had met earlier. “We’ve just been employing a rhetorical device to get our point across. It was all for your own good. Narrow-minded people frequently close their ears to our arguments, so we have to resort to creative measures, to ensure as fair a skirmish as possible.”

“Regardless of who presented the arguments, I have serious doubts about the Savior’s Plan,” pointed out Dan. Jordan accompanied him with a nod. “I feel like my eyes have been opened.”

“I know you’ll make the right decision,” promised Samson. “The issues are still the same as they always have been. When you were more innocent, the choice was clear. To be fair, your natural tendency was merely to demonize anything unfamiliar. But now that Lucifer’s angels have come and played their siren song, you’re going to have to choose all over again.

“To prepare for our next meeting, please be extra diligent in your study and prayer. Consider this debate an object lesson. The moral is that every dispute you think you fully understand is just a subtle temptation waiting to surprise you. It’s foolish to believe that you’ll always recognize a devil on first sight.”