Retirement Planning – Nev Kraguljevic
7 Things I Learned The Hard Way
I heard him finally ask:
How much money will you need when you retire?
I stood there confused, thinking:
How the heck am I suppose to know that?! What am I? An all-seeing raven?!
He started laughing!
Well, most people are not! But how about we plan on $1M?!
I turned red! I realized, I blurted my thoughts out loud. I quickly apologized and agreed with the amount. I signed the papers and left!
On my way to the office, I started thinking:
Well million sounds good… Ha, Nev the millionaire! It has a ring to it!
Day went on and I was busy meeting new people and getting settled into my first office and my first job!
Life is good!
I went home that evening and celebrated! Millionaire Nev was a lovely thought and was exciting.
A few weeks went by and my first paycheck arrived!
I hadn’t realized until that point that I would!’t get the full amount I earned.
There were all these taxes and payments taken out, most of which I didn’t even know where they actually went.
Staring at my first check, I quickly calculated that my $20,000 a-year-job was only paying me $15,000! YIKES!
A thought hit me like a ton of bricks:
How the heck am I going to get to that million?! I am only getting $15,000 per year and to reach that million I would need to multiply this 67 times!
I was concerned, but I figured guy working in HR and the lady from 401K training knew better.
They wouldn’t have suggested that amount if it wasn’t possible… right?!
Months went by and my first retirement statement came in.
I ripped open the envelope excited to see how close I was.
Total balance: $1,576.37!
Oh boy! I’m in trouble! At this rate, I don’t think I’ll ever reach $100,000 none the less that million!
I decided I needed help. A financial adviser to help me reach my goal.
He was crunching numbers and telling me about the compounding effect and how continuing to maximize my retirement fund will very likely get me to $1M right around the good age to retire: 75!
And if I can increase my salary and contributions, I’d be ready to leave my job, sell my investments along the way and enjoy retirement right around the ripe age of 68.
What?! But I’m only 21! That’s… that’s… that’s almost 50 years from now! That’s half a century!!!
Then he talked about diversifying my funds and how I could be in every sector of the market and benefit from it all.
I went home depressed. I didn’t mind working and I loved what I did. But 50 years?!
I was young, vibrant, excited to explore the world… to travel and try new things…
I didn’t want to live to work. I wanted to work to live!
But I couldn’t afford to live. Based on the conversation with the financial adviser, I could maybe afford a week at a beach motel, in a good year. Other than that, it’s work, work, work!
That is when I started falling into a depression. I started to feel trapped and I had no clue how to fix it!
Well, the guy said to increase my income… hmm, maybe if I work harder they’ll pay me more?! And if I can get an MBA, I will surely get a better paying job.
I went to work, yet again!
I worked hard, trading even more hours for dollars in the hopes of a promotion.
I enrolled into an MBA program.
I spent my days working and my nights attending classes. The weekends went by in studying and writing papers… so many papers.