Running Out of Time Before Running Out of Money

Last month I wrote a post about how I failed to reach a big financial goal by the time I was 30. Several days after publishing it, I got the following email from a reader:

I’ve been reading your postings for years, but your most recent impelled me to reply.

I did not even begin to invest until I was 30.

Approaching 70, I will run out of time before I run out of money.

Shoulda, coulda, woulda do not matter.

We can only make decisions based on what we know when we make them.

The email hit me like a ton of bricks. The wisdom. The self-awareness. The openness of it all. I don’t usually get emotional about finance, but this line shook me to my core:

I will run out of time before I run out of money.

I read the line again and started to wonder: How many people experienced this first hand in the past year? How many unfortunate souls ran out of time before they ran out of money?

I can only imagine. All those people who saved diligently for a retirement that never came. Decades of financial responsibility without the promised rewards. No extra family time. No nice vacations. No new hobbies. All because of a virus that ended their story too soon. A black swan. An unknown unknown that changed everything.

That’s why my biggest takeaway from 2020 is that you can lose with a winning hand. You can make all the right choices and still end up with a bad outcome. Not everything is in our control. Yet, many of us save and invest as if it is.

I don’t say this to discourage saving and investing, but to encourage balance. With the average inheritance in the U.S. being $177,000(the median is closer to $69,000), many people are accumulating far more money than they will ever spend in their lifetimes. More importantly, the average amount left to heirs doesn’t start to decline until someone reaches their 90s. As United Income reported:

The average retired adult who dies in their 60s leaves behind $296k in net wealth, $313k in their 70s, $315k in their 80s, and $238k in their 90s.

This suggests that running out of money in retirement may be less of an issue than many people realize.

This doesn’t necessarily surprise me though because wealth rarely begets the feeling of security. For example, if you ask 1,000 American adults how much money you need to be considered rich, they will say $2.3 million. But if you ask the same question to 1,000 millionaires (those households with at least $1 million in investable assets) the number increases to $7.5 million. We get richer yet still feel like we don’t have enough.

I raise this point because too many people give up too much for the sake of money. Money that they may never get to fully spend anyways! So why would you sacrifice time with your family, your physical health, or your mental health just to save a few extra bucks? Is it worth giving up your daily lattes, guacamole at Chipotle, or time with your children just so that you can bequeath an extra $10,000?

It seems so silly to me. Yet people make these kinds of sacrifices all the time only to leave behind a bigger inheritance. Don’t get me wrong, there is nothing wrong with leaving money to your heirs. But doing so at great personal expense, that’s a tragedy. There’s no honor in winning “Richest Person in the Cemetery” if you can’t enjoy the journey getting there. Of course, we shouldn’t live a “carpe diem” lifestyle and fulfill our every desire, but we also shouldn’t live so frugally that we reuse our dental floss either. Once again, balance is the key.

Finding that balance isn’t easy either. I wish I could say that I’ve always been able to balance my time and my money, but I haven’t. Looking back now, I was definitely far too frugal in my early twenties. For example, when I was 22 I used to sneak mini bottles of liquor into clubs to avoid paying $11 per drink. That decision may have had more to do with stupidity than frugality, but you get my point. It was an unnecessary waste of time and energy so that I could maybe be $100 richer today.

But that’s not even that bad. I had a coworker in San Francisco who took frugality to the extreme. He used to “game” the Uber app back in the day by dropping his current location pin into the middle of the San Francisco Bay, lock in the price, then move the pin back to his actual location to be picked up. In doing so he discovered he could avoid the dreaded surge pricing and save $5 or so. I don’t know how he figured out this early bug in Uber’s software, but I warned him that they would fix it. Surely enough, they did.

On New Year’s Eve 2015 my coworker tried the “Uber pin trick” while trying to get a ride home drunk at 2AM. The surge pricing indicated 8.9x the normal fare and he didn’t want to pay it. Well, the trick failed. The next day he got the bill for $264. I only know this because he eventually told the whole office how “Uber ripped him off” after he spent weeks fighting the charge. I don’t think I’ve ever felt more schadenfreude in my whole life.

His story illustrates how money can take control of your time and your life…if you let it. Don’t. Because you probably won’t spend all of your money, but you will spend all of your time.

Anytime I forget this truth, I remember this incredible speech from John Ortberg. I encourage you to watch it:

Thank you for reading!

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This is post 219. Any code I have related to this post can be found here with the same numbering:

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