The Number One Mistake Financial Planners Make

Updated insider information by Chellie Campbell, author of “The Wealthy Spirit: Daily Affirmations for Financial Stress Reduction”

141-May 21

“Everyone must row with the oars that he has.”—English Proverb

Years ago, when I was first starting to earn good money, I thought I would go to see a financial planner to get started saving and investing for my retirement. We talked about my goals, and what amount of money I would like to live on when I was retired.

Then she made The Mistake. She calculated how much money I would have to have saved by age 65 in order to have enough to retire, adjusted by inflation. I remember the amount, because it seemed enormous and totally unreachable: $1.2 million. She told me that I would have to start saving $800 every month in order to reach my goal. Well, I was only making $2,000 per month at the time! There was no way that I could save $800 a month. It was a totally unreachable number to me. I thanked her very much for her time and left the office, thinking that I was never going to be able to retire, so I might as well not bother saving anything. And so, for years, I didn’t save a dime.

(Continued on page 141 of The Wealthy Spirit)

Today’s Affirmation: “My assets grow easily and effortlessly every day!”

Here’s how to calculate the amount of money you’ll need at retirement: 1) Whatever you have now; plus 2) Ten million dollars.

That sounds like enough to make you feel safe, right? Financial advisors estimate that the percentage of Americans who can actually save enough money to afford a reasonable lifestyle for 25 years without working is about 3%.

Here’s the problem: over time, the retirement game has warped beyond any reasonable shape. It was invented in the 1930s along with Social Security, which set the retirement age at 65—because most people died at 63. It was only supposed to support the few people who lived beyond the average life expectancy for a few years. Now life expectance has risen to 78, so retirement should start at 80. Most people can save enough to last 5-10 years.

I spoke with a 50-something man the other day. He was burned out at his job and wanted to retire. But he was afraid. “I have enough money to last twenty years,” he said. “But if I live longer than that, it’s a problem.”

Living too long is a problem? No—the problem is working too hard and burning out. The problem is too much work and not enough vacation. The problem is not having work you love.

When was the last time you heard a movie star say, ‘I can’t wait until I have my pension funded so I can retire and stop making all these movies’? You never hear that. Because actors love their work. At ninety years old, they’re trying to convince insurance companies how healthy they are so that they can make a movie. They die onstage. They want to die working because they love their job.

The game of richest man in the world has been won already. Bill Gates is still working. The number two richest guy, Warren Buffet, just gave the number one guy all his money. He’s still going to work every day. The number thirteen guy, Sheldon Adelson, is still working, too – he has a five-year plan in place to become the number one guy. He’s 77 years old! Why bother? you might ask.

Just for fun is the answer.

Find work that you love doing and you won’t want to retire from it. Retire to do what? Lie on the beach? For how many days would that be interesting? You only think you want to lie on the beach because you haven’t had a good vacation. So go to Hawaii or Cabo or the Caribbean or someone’s backyard in Malibu now.

Beach at Santorini

And enjoy a latte on the beach while you’re at it.