058 Steve’s Retirement Journey

Sound Retirement Radio

Steve shares his retirement journey.  Steve is a fan of Sound Retirement Radio and agreed to be a guest so that we can learn more about his vision and planning for retirement.

Below is the full transcript:

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Speaker 1: Welcome back, America, to Sound Retirement Radio where we bring you concepts, ideas and strategies designed to help you achieve clarity, confidence and freedom as you prepare for and transition through retirement. And now, here is your host,  Jason Parker.

 Jason Parker: Seattle, Tacoma, Olympia, Gig Harbor, America, welcome back to another round of Sound Retirement Radio. What a blessing it is to be the guest of this incredible radio show, podcast now that’s being broadcast all around the country. I just want to thank our listeners for making us one of the top internet resources, top podcast when you do a search for retirement in Itunes, Sound Retirement Radio is one of the top six or seven, I think now. I really appreciate that. Today’s message, today’s program is actually coming from one of our listeners. I am excited to bring you this. This is Episode 058, if you are driving down the road this morning and you are not going to be able to catch the entire program. Please visit us at soundretirementradio.com or soundretirementplanning.com where we archive all of this content. It is all available for you anytime that’s most convenient.

As you know I like to get the morning started right and I have a verse that I would like to share with all of our listeners before we get going. This comes from Proverbs, Chapter 3, Verse 9. “Honor the Lord with your wealth and with the best part of everything that you produce.” Now, that’s awesome.

I know how much you like our jokes on Saturday mornings, this is one for you to share with the grandkids.  One of the next door neighbor kids came by the other day and shared this one with me and I thought it was pretty great. Why do fish swim in salt water? Because pepper makes them sneeze. (Laughs) My daughter still doesn’t get that, salt water, pepper makes them sneeze. All right.

Episode 058, today this is Steve‘s retirement journey. The way that this came about, this particular program, is I, several weeks ago, I made a comment. I just said, “Hey, one of the things we want to do more of as we are creating this community of people who are retired and getting ready to retire, is we want to bring real people onto the show and just share their story.” Steve is one of our listeners. He contacted us through email and he said, “Hey Jason, I’d be willing to do this.” What an honor it is for me to bring him onto the program. Steve, welcome to Sound Retirement Radio.

Steve: Thank you Jason. I am a big fan of the podcast and it’s a privilege to be here.

 Jason Parker: Boy, I really appreciate you taking time out of your busy schedule to be a guest, to share your story here, Steve, and really hoping to add value to our listener’s lives today. Before we do, I know that you had this over arching, kind of condensed message that you really wanted to convey the the listeners of Sound Retirement Radio, so I thought we could just start if you would just take a minute and share your thoughts on retirement.

Steve: Certainly. Over the last few months, I guess, or few weeks, I’ve been seeing blogs, news articles, op ed pieces that all had a pretty common theme that the American dream is dead. Particularly a lot of millennials, I can’t repay my student loans, I just won’t try. Or, 401(k)’s are a hoax, that’s a set up by the government or by the man and if you try to participate in a 401(k), you are just throwing your money away. The whole idea of two cars, two kids, and a house and you’ll have a good retirement, that’s just totally out of reach for average people. I’m sitting here, an average person, who has done only a few, basic, common sense things that seem logical to me for anyone to do and I’m in great shape to retire. I was in great shape to retire from my early fifties on. I just think that message is wrong and it’s very dangerous for people in their twenties being told basically that they don’t need to try. If they will do just a few common sense things now, then they will have plenty of money to retire and even retire early. You know, this system works and I think I am living proof. If you just do a few basic things, you’re going to be fine. You indeed will be a millionaire and you never will feel the sacrifice it took to get there.

 Jason Parker: You know one of the things, I think that happens sometimes, in my industry and the world that I live and work and breath, is financial advisors, we’re always talking from our perspective but I think it is important that our listeners understand you’re not a financial advisor. You’re just a guy out there who’s prepared to retire, you could retire right now, as I understand it if you’d like to and you’re just processing this through your own lenses. One of the things you kept saying there was a couple of common sense principles, if you will. I don’t know that common sense is alive and well today, Steve, maybe you could take a minute and share with us what some of those common sense ideas are that have served you so well.

Steve: I can do that. I’ve scratched out a little list of do’s and don’ts that seem like common sense to me. Don’t live beyond your means. Don’t go out and lease a BMW if you are twenty-three years old. Do go buy a used Toyota or a Honda and drive it until the wheels fall off. Do buy a house that you can actually afford. Do marry somebody that agrees with you on money and do stay married, that’s a novel idea. Divorce is very expensive not to mention the emotional turmoil. Do get an education or training that will let you earn a good living. Don’t major in Italian poetry or medieval history.

 Jason Parker: Sounds like you’ve had this conversation.

Steve: Don’t go to a very expensive school unless you are getting a scholarship to pay for it. When you are in school, work while you are in school, cash flow your education. I only have two more. Don’t impulse buy to try to find joy. Joy is not going to be found in impulse purchases. The last two and the one I think is most important is find joy in relationships not things, find it in giving and not spending. That’s pretty much the philosophy that, that’s how I grew up. I think that’s just common sense stuff.

 Jason Parker: You know, that is awesome. I’m going to have to go through and make sure that we write all of those down for people who are visiting the website. One of the things, you and I had a chance to talk briefly before this interview …

Steve: I know you talked about a retirement journey. I never felt like I was on a retirement journey, I just felt like we were living our lives using common sense and Biblical principles. I am certainly proud to admit that I am a Christian and much, most all maybe of Christianity is also just regular common sense, Golden Rule type principles. We just thought we were living our lives. We didn’t really think much about retirement. We knew we were going to be fine because we were saving a good bit of money.

 Jason Parker: Now you and I, because we had a chance to talk beforehand, you shared with me that you had an upbringing that really supported these types of common sense principles. As you have been going through your life and you guys have lived modestly and bought used cars and stayed married, I’m sure you probably experienced a lot of people that didn’t do those types of things. How do you suppose that is that two people living in the same community can grow up and make such different decisions as they are wandering through life.

Steve: Well, I would not take credit for being particularly smart or particularly prudent. I had great parents, as did my wife. We pretty much continued on living the way we had seen our parents live. They didn’t borrow money for things, they waited until they had the money to pay for it whether that was a car or something for my wife’s parents farm or something for my dad’s business. They just put money in envelopes and waited until they had enough to buy it so they never had any consumer debt. They paid their house off early and made a big party when the note was retired. They celebrated victories in life.

When they got a new car, they were thrilled to have it, but they never took a loan out to pay for it. I think if you were raised that way, and if you were also raised in a family that was stable and you didn’t know anyone in your family that had ever gotten divorced, you grew up feeling like that’s not really an option. Whereas, if you grow up in a family where many, many people have gone through divorce and many, many people are in deep debt, those seem like natural options and sometimes seem like the easiest way out when life’s problems come along. I’m not giving myself any credit. I just had good examples and so I was never really tempted to do the kind of thing that would result in financial distress later.

Jason Parker: Hey, so as you think, and this isn’t something we talked about and this is kind of a hard question. As you think back to your childhood, what’s your earliest memory of money?

Steve: My earliest memory, my dad was a big believer in work so before I even got out of elementary school, I had a paper route. Actually, I was a slave laborer for my brother who had the paper route and I threw newspapers at 5:30 in the morning when I was like a third grader for a dollar a day, thinking I was the richest guy on earth, not realizing my brother was probably pocketing about ten dollars today. Anyway, it taught me a lot about the world of business, too. It was earning my own money and if we wanted a really nice Christmas gift, like a bicycle, my parents would set up, okay, that a hundred dollar bicycle, we’ll pay fifty, if you’ll pay fifty. We would participate in that kind of a matching deal. I really learned how hard it was to make money and how quickly it was gone if you didn’t spend it carefully, it was a great lesson. It’s much harder for people to do that at a young age now, that would have violated every child labor law known, but it didn’t hurt me to grow up with jobs. My wife, who grew up on a farm, they worked from the time they could walk on, there’s always chores.

 Jason Parker: Yeah, wow, that’s great. So, you are, I think our listeners need to get to know you a little bit better because your story is really incredible. You could be retired, from what I understand, right now. Maybe help our listeners understand where you are at in your life, you aren’t retired yet, but you are looking at retirement on the horizon. Paint a picture for us.

Steve: Sure, I am an engineer, went to a state school, an inexpensive state school, met my future wife there, we were friends for years, met through the church and then got married when we graduated. We came to a small town here in the southern state I live in and went to work at a plant, a chemical plant. I’ve had the same job, basically or worked for the same company for thirty-seven years now, which is unusual. We bought a house the second year we were here with a low income loan. I started out at low wages and have never been what anyone would consider rich and we bought the house, which we still live in, thirty-seven years later. I’ve been very successful at work. I turned out to be a pretty good engineer and worked very hard because I recognized that a really big part of the equation for saving and generating wealth is your income. You can only cut back on your spending to a certain point and so it is important that you get more compensation if you are going to save more money.

I was very successful in my career. I was never rich, never like MD wages, but I made good, solid, white collar wages. We were able to max out the 401(k) every year we were in it, and that’s not a huge percentage of your income. The limits used to be very slow on 401(k) and they are still not extremely high, so we would save outside of that as well. We had Roth’s and we had regular IRA’s and we had non tax sheltered savings accounts. We probably saved about twenty percent of our income every year, probably more than that now.

We didn’t live badly. We had a nice house. We expanded it five times. We started having kids. My wife retired from work and became a stay at home mom for the last twenty-eight years, so we’ve done that on one income. We’ve always tithed from year one and given above that to United Way and to individuals that we found that we could help. We strongly believe that if you have a faith that encourages you to give, that really helps you keep money in perspective because ten percent of your gross income is a lot of money. It just helps teach me that it’s not really my money, it’s just money that I am here to take care of for a short period of time. I think it’s kept me from being greedy to know that I need to give a significant amount of money and then to give more on top of that. We are looking forward to after I retire to giving a lot more. Really if you think about it, when you spend money, what’s more fun buying yourself a toy or buying some child who doesn’t have a toy, a toy. It’s just no question, giving is way bigger a thrill than buying yourself an impulse item.

Jason Parker: Boy, that is awesome. I love how you explain and describe stewardship. Something that doesn’t belong to you, you are overseeing it for somebody else and just doing with it what you are supposed to do. I really, really appreciate that. I want to ask you some more questions about tithing and stewardship and some of those things. Before I do, one of the things that caught me that I think kind of interesting. You’re in your fifties and you could retire right now, today, if you wanted to. As I understand it, you’re not retired yet, Steve. Why is that?  If financially if you could retire, why haven’t you retired?

Steve: I probably could have. I’m fifty-nine. I probably could have retired at fifty-three, I’m sure I could have. I’m not sure I did the math back then. I like what I do. I’ve always enjoyed getting up in the morning and going to work. It’s mentally, extremely challenging, it’s a job where I have a whole lot of contact with the public, and the government, and with … There’s a lot of workers that work here now and they are my friends. We enjoy taking on challenges together and winning. I’m sure there’s going to be a point in time when it gets just a little too much and too intense and then I’ll need to back off just because I may not be young enough to meet the challenge and job, because it’s very demanding. Right now, it’s more fun on a forty hour basis or a fifty hour basis than my hobbies are. I have a lot of hobbies. My wife and I are extremely active and we have tons of hobbies, but I still love the mental challenge and I think it is good for me to keep that going.

 Jason Parker: I love that. I really love that you love your work, too. I know some people, they just hate what they do and they can’t wait to retire. When you love what you do, like the work that I do, I really enjoy what I do. It’s hard for me to envision retiring from this just because when you wake up and you do what you want to do everyday, that to me is kind of retirement. You obviously, this is a topic that you research, you study, you think about, are there other resources that you would want to point listeners to, books that you’ve read on personal finance and retirement, podcasts or radio shows that you listened to. What are some of your favorite resources out there?

Steve: I do listen to a number of podcasts now and read blogs. I have not read as many books on retirement. I do listen to Sound Retirement Radio, which is yours of course. I listen to the Retirement Answer Man which is a gentleman named Roger Whitney. I just kind of for fun listen to one called Stacking Benjamin’s which is extremely entertaining. I read a lot of those RSS feeds, those blogs. I have one of those news reader apps on my phone and if I’m stuck for a few minutes with nothing to do, it probably has 150 different financial and retirement and investment sites on it, so I’ll just scan through there and look at those. In my career and my charitable work, I’ve been privileged to be on a financial committee for a charity that has about 65 million dollars that it invests as its endowment. For the past fifteen years, that’s a sizable amount of money, so we would have investment professionals come in and guide us on that. I did get a lot of free education from those advisors on how they thought it was prudent to invest that endowment for that charity. A lot of what I know, and I don’t claim to be an expert at all, is what I’ve heard has been from some of those experts that were advising us on those funds.

 Jason Parker: All right. Boy, I’m loving this interview and I know that we are going to run out of time for the people that are driving down the street, for the folks that are radio listeners. I want to encourage our listeners that if we do run out of time here at the end of the program, Steve has agreed to continue to carry on this conversation for a couple minutes longer so that I can ask him some more of these questions. This will be archived at soundretirementradio.com. If you would like to listen to the entire podcast, I’d like to encourage you to do that. What about investments, Steve? As you think about the investments that you’ve had success with and maybe ones that have not done well for you, what’s your comfort level there? What do you prefer to invest in? How do you prefer to invest your money?

Steve: I’ve been pretty aggressive. I do not buy individual stocks. I had bought mutual funds and up until my early to mid fifties, basically, 100% of my retirement investment and long term savings have all been in stocks and they’ve all been in mutual funds. I had emergency fund money, probably a year’s pay or something like that in CD’s and liquid assets that I could get in case of emergency. I really firmly felt that for a long time horizon that nothing could beat the stock market, that I was capable of investing in and confident. I usually had about 50% of it in large US cap and maybe 25% in foreign and 25% in mid-cap and small-cap, emerging market, and things like that. I felt like I had enough diversity that way.

I rode out the 2000, the 2007, 2009, the big crashes that occurred in the stock market, I really didn’t notice them. I didn’t check my balance every day. I didn’t ever sell anything that had gone down. I just bought and held. You know, two or three years later it would be back up again, better than it was before the crash. My philosophy is that if you have enough cash to ride through the down times, that you just don’t panic and sell when something crashes. The market will go down again. You can look at the charts for sixty years and you can see that it goes up a lot and then it goes down a little and then it goes up a lot and that’s bound to happen again. Just don’t panic, just leave your stuff in those good stocks and they will come back.

 Jason Parker: I saw an article just recently quoting Jack Vogel who said, “If you are young, one of the keys to your retirement success is not opening your statements on your 401(k) balance.” I thought that was pretty funny.

Steve: Definitely. It hurts your feelings when you see that you’ve lost hundreds of thousands of dollars, but if you just let it go, it will come back.

 Jason Parker: What kind of investments have you intentionally tried to avoid? Is there anything that you’ve been intentional about not investing in?

Steve: Well, about the only thing, actually I live in a small rural southern state. When we first came to town, I did, I lived in a trailer. I’ve got to admit it. I bought a used trailer because I would rather own a used trailer than pay rent to somebody else. We bought a little mobile home for $5,000 and we lived in it for about a year before we found the house. I kept it and decided I would be a landlord. What I found out is that I don’t have what it takes to be a landlord. My tenants just took advantage of me. Single moms that couldn’t feed their kids, and I just couldn’t throw people out into the street even if I knew they were feeding me a line. We did get the trailer paid for by renters and then we sold it. I decided I’m not going to do real estate anymore unless I somehow got to the level I could hire a manager because it just didn’t fit my personality.

 Jason Parker: Boy, that’s good to know. What are your feelings about insurance?

Steve: I am a huge believer in insurance because my dad was an insurance agent and it fed me, it clothed me and paid my way through college, so naturally I’m very biased towards it. I have opinions on it. Term life, I think, is something everybody should have if you have kids at home or if your spouse needs your income replaced if something should happen. I think you need probably fifteen times your annual pay. Ten to fifteen, maybe even more if you can afford it because life happens and you might not be there. You don’t want your family decimated. Actually, one of my best friends in his thirties died in a plane crash and he did have terrific life insurance and his wife was able to raise the kids and not work while she did it. It’s a real legacy for him.

 Jason Parker: Steve, I hate to interrupt your train of thought, especially on that story, but we are out of time for the radio. We are going to finish this up. When we come back, I want to ask you about your biggest financial mistake. Again, if you are listening out there I just want to encourage you to visit us at soundretirementradio.com to hear the rest of Steve‘s retirement journey. Steve, thank you so much for being a guest on soundretirementradio and we’ll be right back.

Speaker 1: Information and opinions expressed here are believed to be accurate and complete, for general information only and should not be construed as specific acts, legal or financial advice for any individual and does not constitute a solicitation for any securities or insurance products. Please consult with your financial professional before taking any action on anything discussed in this program. Parker Financial, it’s representatives, or its affiliates have no liability for investment decisions or other actions taken or made by you based on the information provided in this program. All insurance related discussion are subject to the claims paying ability of the company. Investing involves risk.  Jason Parker is the President of Parker Financial, an independent, fee based, wealth management firm, located at 9057 Washington Avenue Northwest, Silverdale, Washington. For additional information, call 1-800-514-5046 or visit us online at soundretirementplanning.com.

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