Why do professional athletes go bankrupt? Why do so many Americans struggle to retire? As it turns out, the answer to all three of these questions is the same. Over-focusing on assets and completely ignoring financial dependency created by our habits leads to dark places.
With lottery winners and professional athletes their problem existed before their large influx of cash. Their poor financial habits and behaviors are simply magnified by the cash dump. It comes down to resourcefulness. More resources don't make you more resourceful. Which helps explain why you and I are different. Sure, the odds are we aren't lottery winners or professional athletes, but we also don't often get the chance to be un-resourceful with large sums of money. That's not to say we aren't un-resourceful. Our un-resourcefulness comes in a more every day package. By not being resourceful with what we are given, we simply make our everyday lives kinda miserable. This then makes it seem like we are doing a four decade long trudge to a *potential* retirement. No good.
So let's turn it on it's head.
You may ask, "what's better than a bunch of money?" and I would answer, "not needing a bunch of money." Accumulation has been the focus of retirement planning industry for a long time. It makes sense, it's hard to retire with $0 in your retirement account. Yet, it also ignores the other side. If you live on 100% of your income your entire working life, of course you'll feel like you need to have a ton of money accumulated to survive retirement. But what if you didn't need 100% of your income? This is breaking your dependency on your income. If you save 10% of your income you now only need 90% of your income to live. If you save 20% of your income you now only need 80% of your income to live. And so on. Imagine if you resolved to decrease your dependence on your income each year so that by the time you reach age 65 you are only living on 65% of your income. How much more attainable would retirement seem to you then?
The beauty of this is that it has a double benefit. Not only do you need less income to survive retirement, but all the while you are breaking your dependence on your income you've been accumulating money through saving in a retirement account.
Focus less on accumulation and more on cutting back your lifestyle. Accumulation is a natural product of a decreased dependence on income.