The Financially Savvy Centenarian I recently saw an article on Yahoo! Finance about a 107-year old man who was apparently still financially self sufficient. In this day and age where some people are worried about outliving their money, this centenarian has survived on his savings. What’s interesting is that article mentions that he never made more than $10,000 per year. Granted, that sum would have meant a lot more when the man was much younger, due to the time value of money. Nevertheless, he clearly wasn’t Trump-esque in his income. This was a regular guy. Given that he had obviously been smart with his money, he was asked for his advice on retirement planning. According to the article, here’s what he suggested:
- Thrift
- Real Estate Investments
- Use Debt Well
- Work even when jobs are hard to find
- Save and invest conservatively
- Stay Healthy
I totally agree with 1, 3, 4, and 6. I partially agree with 2 and 5. Let’s jump ahead to #5. Why only partially agree? Well, I TOTALLY agree with the save part. It’s the invest conservatively part that seems to perhaps not fit these days? By that I mean that the man did not invest in the stock market at all. I wonder how much more he could have made if he did invest in the market. Back to tip #2. I do agree that real estate has made people a lot of money over the years, and is better over the long-term than renting. But one has to be careful, as we have seen lately. Outside of one’s own home, I’ll give real estate investing a partially agree. It can be great in the right circumstances, but isn’t for everyone. I especially like #6 – Stay Healthy. I had this high up on my list of key success factors for financial health. Hard to make money when you can’t earn income, and hard to save when you’re spending a lot on health care costs! Of course, even though I have my thoughts above, I have to hand it to the man. And let’s be real here: who are we to argue with a guy who’s A) lived to 107 and B) is still able to live on his savings! What do you think about these tips? Do you agree with all, or just with some? Is it good to pause to consider any reservations with these tips in light of this remarkable man’s proven success? Blog Carnivals This week, Squirrelers was included in several carnivals:
- Stock Returns by Month: Interesting Historical Trends was included in the Carnival of Personal Finance, at Taking Charge
- My Best Customer Service Experience Ever was included in the Carnival of Money Stories and selected as an MVP (Editor’s Pick) at Sweating the Big Stuff
Recommended Reading Here are some articles from the personal finance blogoshphere that caught my eye :
- Knowledge is Power, and its Free Too!, at Wealth Informatics
- Book Review and Giveaway: Debt Free for Life by David Bach, at Financial Samurai
- How Important is Financial Balance to You?, at Invest It Wisely
- Watch Out for this Hidden Fee when Deciding on a Broker, at Money Cone
- Tax Savings on OTC Medications with Flexible Spending Accounts, at The Digerati Life
- Don’t Be So Concerned About Money that you Miss Life, at PF Firewall
- 10 Tips to Save Money, at Budgeting in the Fun Stuff
- When a Deal Isn’t So Great, at Personal Finance by the Book
- Trading One Vice For Another, But in a Good Way, at Everyday Tips and Thoughts
- Can Work Procrastination be a Symptom of a Larger Problem?, at Canadian Personal Finance
- TFB Monthly Income Report, at The Financial Blogger
- Career Tip#2 – Be Polite, at 101 Centavos
I agree with all of them except #5. At his age, conservatively is the only way to invest. For younger folks, it pays to invest more aggressively. Once I get older then I will definitely reduce my stock market investments.
I think rental properties is a great way to invest. As long as you can keep them rented, the checks keep coming in. It’s a great way to diversify my investment from the stock market. Real estate investment made a lot of people comfortable, can’t argue with that. I think the landlords weathered this housing downturn quite well. It’s the speculative investors that lost a lot of money.
retirebyforty – yes, I agree on conservative for his age. If he was referring to planning for retirement, I think that investing with some risk (stocks, etc) is appropriate for getting to the point of being able to retire. As for real estate, yes I too think that the speculative investors got burned this time. That’s a different proposition, really.
RE isn’t bad if your vision is long term. Sure we took a beating and I guess we deserved it! But long term it is a good investment unless we are to believe the RE market will never recover.
MoneyCone – One thing I always think about is that we can’t make more land. Well, in some places people attempt to create mini “islands”, but in reality, land is fixed. Simple, yet solid concept that supports real estate’s longer term view.
I agree with all six points. All the points can be interpreted differently. What is conservatively? It means different things to different people. Some may argue conservatively is not aggressively. True, when I was in business I took risks and applied conservative principles, however they were still risks. To some conservatively may mean a CD, to others bonds and still others IBM stock. He may not been aggressive, but I bet he started very young and routinely invested/saved. That trumps aggressive any day.
krantcents – yes, starting early and investing regularly can result in tremendous savings. The power of time and compounding is something, isn’t it? With the extreme time he had working for him, if he started early, I can see why he didn’t need to invest agressively!
I don’t want to live till 107 and not just because I might run out of money but also because I cannot really imagine myself with no teeth, bald and hardly moving around. 🙂
Aloysa – yeah, I try not to think about such conditions. I’m just hoping I live to the life expectancy and it’s a quality life!
Hmmm, I guess since he came from the around the time of the Great Depression, I can understand his mistrust of the stock market. Heck, I think there is still sneaky business doing on today to a small degree. That said, I agree with you, investments in the stock market seems to be the way to go in these days, especiall now…
I agree with all of them except real estate. I won some and lost some. Broke even, but never been very comfortable with it. Perhaps I have to give it another fair shake. More comfortable playing the stock market, but we got thumped pretty badly there, too. Maybe he did get it right, play it safe? 🙂 Thanks for the health reminder. I need to hit my gym!
I read this article too. He is amazing! I mostly agree with you, but after a certain age, I think it is best to avoid the stock market or stay with very conservative, trustworthy stocks. I have a relative whose retirement money is still in stocks, and she has lost quite a bit. Not something you want to have happen when you are in your 70s!
Hi Squirrelers, thanks for the link.
I agree that #2 for a 100+ year old guy would have been a superior investment. My great-aunt bought a small house in Mill Valley, Marin County (CA) in the 1940’s for $6,000, and sold it in the late 90’s for $600,000. Granted, a lot of that appreciation is actually *depreciation* of the currency, but still……
Good reading, gives even more for thinking about #5 point … Thanks!
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