Having just returned from a lovely holiday in St. Lucia, it was time to get down to business: catching up on Better Call Saul. The spin-off and prequel to the series Breaking Bad explores the story of Saul Goodman—from layabout to underworld lawyer.
“Hey man, I didn’t catch your name,” says his new buddy as they stumble out of a bar.
“‘saul good, man.” (Laughter)
They walk down a dark, creepy alley. There’s a wallet on the ground. The mark picks it up. It’s fat with C-notes. Nearby, there’s a man’s body laying among the trash cans. Saul relieves the man of his gold “Rolex”. His pal takes exception to the division of spoils. He gives Saul the stolen cash and tops it with his own in exchange for the timepiece and takes off. Saul and his accomplice split the cash. A garden variety scam. Small beer.
(Where am I going with this…?)
Right. So, I’m also catching up on my financial newspapers. And it comes as a shock to learn that, according to a recent article in The Globe and Mail, the average Canadian needs to save around $4.5 million in order to generate the median income of approximately $74,000 in retirement. The investment portfolio would be split 50-50, stocks and fixed income.
Well, you can imagine the uproar! But before everyone twists her knickers in knots, let’s all take a deep breath. Unless you’re Gwyneth Paltrow and need a solid-gold juicer for power cleanses and a steady supply of snake venom to keep those frownies at bay, most of us will do fine with a lot less. (Also, let’s remember there are company and government pensions.)
I believe what the writer was getting across was, in this low-yield environment, if you want to hum along like the late Dowager Duchess of Devonshire tending to your prize chickens and begonias and not to market gyrations, then, yeah, you need a lot of scratch to sleep tight.
However who says we can’t tap the capital during our lifetimes? Listen, I’m sure there are some very fine people who plan to leave substantial estates to dear family and charities. I doff my hat to them. But there’s no shame in spending your hard-earned, or easily-earned, or not-in-the-least-bit earned money while you still can.
Real-time spending could take many forms: personal spending for amusement and delight, heartfelt bequests, garden-variety charity etc. The point is many people think ‘small beer’ even when they don’t have to. They shortchange themselves of a wealth of pleasurable experiences that will never come again. Is it because they really prefer to live modestly, or in some fantasy realm of “One day I’ll…”; or is it that they mistakenly conflate frugality with moral virtue?
It ain’t that hard to live well. The key is to know how much money you’ve got and where it goes. Then do a rough estimate of your expected lifespan, throw in another 10 years for insurance. Invest conservatively. Don’t be a Nervous Nelly and constantly tweak and second-guess your investments.
Going back to the newspaper article, if you had $4.5 million at 65 and expected to live another 30 years, and if you could get a modest 5% return annually, you could spend approximately $292,731 every year. Lose the beer, order the burgundy.