Its the end of the world…

as we know it. – REM, Document, 1987

And I feel fine?

Many of us like to imagine the things that will end the world. Or is that just me? Perhaps I shouldn’t broadly speculate about what other people do in the bathtub. In my case its usually that, or playing with my U-boat. No, that is not a euphemism. Its an actual scale model U-boat. I thought a plastic yellow duck cast doubt on my masculinity and general Alpha male… eh, ness.

In any event, when I’m not stalking merchant ships in the North Atlantic my mind is drawn to apocalyptic scenarios… like a moth is drawn to the blue light of a bug zapper. I amuse myself with schema that will most likely cause the end times. Asteroids. Artificial intelligence. Anthrax. Which are all very cute (and alliterated) But the real threat ALREADY lives among us! They are known to us. We interact with them every day. We might even be fond of some of them. But these people are the walking, breathing embodiment of the end times. I’m talking about the greatest danger to continued human existence to ever walk the earth, I’m talking about the Baby Boomers.

And their stubborn refusal to die!

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Apparently seventy is the new fifty. My old man just turned 71. He is the walking embodiment of the problem we face. He is healthy, strong and certainly doesn’t fit the mold of the decrepit elderly person he should be by now! There is literally nothing wrong with him, besides the fact that he’s annoying… his doctor gives him a solid thumbs up once a year when he does his full medical. He’s even learnt how to use an iPhone. Which I find mind boggling. He comes from a generation of telex-machines, chalk board stock exchanges and post cards.

The old man is anomalous in so far as he did the much vaunted retirement thing ten years ago. He contributed dutifully to his retirement fund. Did the whole living annuity thing which pays him out until he’s 99. (Which he might actually reach) That’s 28 years away. His mother reached the venerable age of 99. (she was still driving at 90)

This is problematic for two reasons. Well maybe more. Lets see how we go…

REASON 1

Not all Baby Boomers planned for their retirement. Which means they have to carry on working. Which means they stubbornly occupy higher order positions in a company that should be cycling. Only they’re not. Because they’re not retiring… and they’re not dying. So they’re causing this strange bottle neck which cascades down the chain of command. Suddenly the middle manager is in his position longer than his predecessor… the bottom of the barrel guys can’t move up the chain either… because the middle managers can’t move up.

Imagine starting out at a company… instead of up cycling every couple of years, YOU occupy the bottom tier for double the amount of time. More importantly your salary stays the same. ie. LOW. You dare not quit, because there are twenty five graduates with MBA’s and a mountain of student debt waiting outside for your job.

Your twenties and early thirties are supposed to set you up financially. But now being stuck at the bottom for longer means a whole bunch of things. One, if you have student debt… that’s gonna take longer to pay off. And two… less disposable income. Why less disposable income, because old people aren’t dying, plus normal population urbanization means a lack of affordable housing. Just paying your rent in an area where it won’t take you two hours to get to work in the morning is half your salary.

Old people are also going to start putting tremendous pressure on health care. The fact that cancer is now treatable makes the insurance companies very sad. They used count on cancer culling the population. Now people carry on living. The longer they live, the more expensive they become to maintain. Old people fall… break a hip, spend five weeks in the hospital… AND RECOVER. You know how much that costs? Millions. Suddenly the money pool is getting smaller… and smaller… and either they can cut back on what they cover… Or… they can increase the monthly cost to cover the shortfall because the Baby Boomers, like the dusty vampires they are, suck it dry.

REASON 2

Pensions run on mathematical formulas that hypothesize how many people are going to die and when. Up until now its been super accurate. It helps keep the pool of money at a healthy level. In fact pension funds had so much money they didn’t know what to do with it. So they bought shopping malls. Now that people are living longer… anyways… it creates a lot of headaches. Even worse headaches for developed countries like Japan and Germany, where healthcare is free and people rely on government pensions. Those aging populations are economically not a viable anymore… but they’re going to cost a fortune to maintain. And you can’t just let them fend for themselves… because those people vote… and for the most part are politically more active than younger people.

REASON 3

No legacy. This sound a little cold hearted and mean, but its a real thing. Inheritance. The longer your parents live… the less you’re going to inherit. Legacy is a huge builder of inter-generational wealth. Its big part of privilege. The longer baby boomers live… the less there is at the end of the day to pass down to the next generation. Looks like you won’t be able to count on daddies death to pay off that mortgage anymore. (Obviously this might not apply to you…)

REASON 4

Burden. The other end of inheritance. Your parents never catered for their retirement. Or have run out of funds. You can abandon them on the street, which I hear some people do these days. Alternatively you can take them in. And care for them. They bring nothing with them to this particular party and they additionally burden you by eating your food, using your utilities and are continuously asking you to change the channel on ‘The Netflix’. At the same time you have to buy diapers for your insanely expensive toddler, you have to buy diapers for your insanely expensive father-in-law. Even worse if you eventually have to get a carer… or someone to help bath them…

REASON 5

Your boss is an 80 year old. He remembers the war. Which war you’re not entirely certain… but it sounds like he may have actually fought in one… and not, you know, piloting a drone. They used to do that you know… I saw it on History.

You have NOTHING in common with your boss. He doesn’t understand you newfangled marketing ideas. In fact every single idea you pitch him is met with a glazed look. Every day you think about how much you hate your boss… you often think about shooting yourself in the head. You imagine going home…. to your sanctuary. But then remember… that your two screaming children and your father in law have used up all your hot water by now. You re-evaluate why you are actually still alive…

 

The good news is. Well… I’m not sure if this is good news or not. But you too will likely live a really long time. Possibly managing to be a burden on society and your children. If the world hasn’t imploded by then I mean.

Yay us!

Perpetuating an imperfect system

My heading for this blog post was going to be, ‘Saving for retirement’, but considering how I feel about the topic, that seems disingenuous at best. Also a reader may mistakenly surmise that this is a post about personal finance (It mostly isn’t).

I should probably mention that I have nothing against the word ‘for’. As a preposition it is totally functional and relatively useful. ‘Saving’ is also fine, as a stand-alone concept. I think everyone should try it at least once. But ‘retirement’ is an awful, malignant word. Grouped together these words form (more or less) the basis for everything that is wrong with the world…. ok, I will grant you some notable exceptions. Like… warm beer and short people. Debating however, why such things should be allowed to exist is to question the divine. (which is another blog post)

Saving for retirement on the surface seems like a very reasonably exercise. But maybe it’s just an elaborate form of masochism. Emphasis on the word ‘Saving’. I have far less issue with building a flexible income generating asset base that can last into perpetuity (through something like entrepreneurship).

Having a lot of money when you choose to retire is obviously really nice. And having more cash when you retire is obviously better than having less cash. But have you really ever considered what retirement actually entails? Besides sitting around and counting down the hours before your inevitable foamy, (gurgling) demise in some palliative care facility.

Why do you want to retire anyway? Doesn’t this mean you’ve bought the programme? They sold you the kool-aid. And you drank deep. You’re on step eight of your ten-step life! Next stop… smelling like an old person and death. Some people like to imagine step nine is travel and boat cruises… but its not. It’s a weird musty smell… and having suspicious looking growths zapped off your wrinkled, sun damaged skin by a dermatologist and pencilling funerals into your diary every weekend as your friends and family kick off. Sounds awesome, I can’t wait. Basically I have to save and invest for my whole entire life in anticipation of this event? Seems like a great way to spend the time allocated to me.

How many happy retirees do you know personally that are getting after it? You know… living the dream. Count them on your fingers. I’ll wait… I’m willing to wager less than a handful and that’s only if you move in impressive circles. Would you swap your life currently for their life? They have money after all.

Let’s segue into something else and ramble on about science for a bit, because science is awesome. And finance is just okay. When it comes to retirement we are using outdated models and concepts that were struck in the fifties. Expected life span. You see we all have just one lap. Lets say its four hundred meters… only half way through the race someone in a white lab-coat has changed it to 800 meters.

My expected death is age 78. Statistically speaking. I’ve just turned 39. Which feels ancient. Some days I wonder how people who are 49 get out of bed in the morning without painkillers.

Only my life expectancy is probably not 78. It’s probably closer to 100. Mind you for the proletariat its still 78. In fact probably less. I’ll probably be in a position to afford the miracles of science that are coming. The nano-machines. The new organs (with modifications). The rejuvenation clinics. The implants that tell me three days in advance that I’m going to have a heart attack (just enough time to pop down to the clinic and have flawless robotic surgery and a flat white). My two year old daughter will likely live to be 120… maybe longer. And for her children death maybe something that only happens to poor or unlucky people. Death is unlikely to be egalitarian forever.

Imagine at age 60 you’re going to have live another… 40 years off your retirement funds. That’s a really long time to be running down your assets. Sure, you might have a metric-fuck-tonne of money, or be an adherent of Mustachianism (the 4% rule) or even on the flipside just conjuring up a dystopian future where we trade cigarettes and blowjobs for dirty brown water and blighted potatoes, so really, what’s the point?

Round about now you might imagine this rant is against investing and pro-Epicurism. Let’s work forever and blow our money on whiskey, cigars and the experience economy. Let’s consume to the point where we need a self-storage unit to contain our ever burgeoning collection of stuff.

Its not.

My issue is more about how we look at our lives. We get these social norms and this corporate nonsense pumped down our throats as soon as we’re born. This is your life!

  1. Get born. 2. Go to school. 3. Get a degree (get into debt). 4. Get a job. 5. Work nine am to five pm 6. Buy a house (you can’t afford) 7. Buy a car (you don’t need) 8. Breed. 9. Retire. 10. Die.

Instead of retirement shouldn’t we be punting a concept of designing our lives better? At the moment the way we use our money doesn’t make any sense. We kill ourselves to hoard our money away for a period in our lives where we can’t really make full use of it anymore. Or we blow it all and use whatever we earn to finance our debt. Perhaps I am decrying the lack of some middle ground alternative.

Is this just some terrible burden we’ve all taken on where we actively try (and very often succeed) to defer our lives. Money (and by association our investments) should be the scaffolding we use to build our lives around, not some weird end game strategy.

I used to believe in the whole retirement fairy tale. I mean it’s worked for my old man. (hasn’t it?) He sits around, reading, pottering around in his workshop, annoying his offspring, bickering with my mother and watching hours of network news. Slowly he is trickling down his funds to zero or close to that…  a fuse burning down towards the great white light and the acrid burning smell of litigation (when his children will murder each other for the scraps of his estate)

We imagine free-form days as the ultimate reward after a long hard trek through life. But in reality nothing is more frightening (and potentially dull). When did being old and rich somehow morph into something to aspire to?

Young and rich would obviously be better. And middle aged and rich would be the compromise position between the two extremes. In reality none of those outcomes are very likely, although we are constantly told that outliers in this field can be studied and emulated (just buy our book). In our post-industrial revolution lives we are more like cogs in a very big machine, all grinding on in the same direction on some predetermined path unable to alter our destiny.

This is not a blog post about solutions. Besides, who am I to make any form of judgement call about anyone else’s life and how they plan on spending it? For the most part I’m just wondering out loud about my own unique circumstances and a system that I’ve decided is stupid. Or maybe this is just long form justification for a (mostly theoretical) lifestyle decision that I a trying embrace.

In any event I do think it’s something worth thinking about. Broadly this post is about future proofing yourself. (you know for when the robots come). And not being complacent in our assumption that the status quo will simply continue ad infinitum.

What is your reducency plan?