Outliving your money …

We sometimes hear the idea of outliving your money in financial planning commercials.

We’ve heard the phrase “Outliving Y0ur Money” and give it very little thought. In most cases, we’re much too young to even think about that because it’s to far down the road. Unfortunately I know someone that has outlived their money. They have outlived what they’ve earned over their entire lifetime and are now scraping by to make ends meet. It’s been a very valuable lesson in understanding the true meaning of being fiscally responsible and the power of beliefs. It’s the unfortunate end result of a lifetime of poor financial decisions. One never thinks that each decision they’ve made over a lifetime would result in outliving their money and retirement savings.

Sewing a lifetime of poor choices will yield a life of scarcity.

Morty Lefkoe’s Natural Self Confidence

I’ve known this person my entire life and it should have been obvious that this would be the end result. This potential outcome was discussed many times, however it appeared to always be too far down the road. It was as if couldn’t be possible. The only way to sum it all up would be denial.

Denial.

We deny facing the truth, facing the facts, we delude ourselves and postpone finding a solution. Many times it’s painful to realize what may happen if we retire and have very little if any money to live on. This denial although it provides a temporary comfort, has devastating consequences.

What would life be like?

What would life be like if you retire with no nest egg or investments to provide you income?

As I witnessed someone go down this path I can tell you this. As one gets closer and closer until that date when the bank account balance reads zero the level of stress becomes exponential. The level of fear is heightened. The level of uncertainty and doubt skyrockets. Even though that reality is rapidly approaching, this person was still in a state of denial. It had become a hopeless situation. Any recommendations I had made over the years to prevent this inevitable certainty were discarded. They were violently opposed.

Over time I threw my hands up and surrendered as well. I accepted the fact that this person was going to be broke. In a very strange way it was almost a relief when the money ran out.. There were no more discussions about withdrawing more funds because there was no more funds left to withdrawal. There were no discussions about how much to take and how much to keep the accounts. It was all gone.

The reason I share this with you is because I would never wish this to happen to anyone and I want to share some insights as to what that outcome looks like. Hopefully I can paint the picture clear enough that it terrifies you to such an extent that you begin making some different choices.

When the last withdrawl was finally made and all the accounts were closed I remember there was a lot of crying. The crying was a daily occurrence. Each day I would witness this crying and despair it was at a loss for words. It was too late. Nothing I can do or say could change the current situation.

Over the years when I would provide suggestions and recommendations, I would be met with “I’m going to change, I’m going to start saving money!”

I had heard this for years and years, over and over again and I knew that nothing was going to change until it’s too late. In the back of my mind I knew the day a change would come would only be when there was no more left to spend.

Morty Lefkoe’s Natural Self Confidence

We tend to live our lives by allowing our lifestyles to expand and contract to meet our income. Seeing someone live on less than 50% of their original income often made me wonder where did the money go before? If somebody could manage to live on 50% had the only done this sooner they would’ve never exhausted their financial nest egg. Unfortunately we only make better choices when our backs are against the wall.

As I mentioned there was initially a lot of crying in hopelessness. This crying never really ended it was just a little less frequent. The harsh reality of living life with less money led to having to say no. Having to say no to vacations. No to gift giving. No to shopping. The sad thing is saying no to all of these expenses earlier in life would have saved tens of thousands of dollars over a lifetime. In hindsight it’s obvious that this person could say no unfortunately they chose not to.

If you are in the position or know someone who is, I belief it’s important to understand that this behavior goes far beyond knowing how to manage money. It’s a serious emotional and psychological problem that is going to require professional help. More money in the bank account won’t help. Telling someone they need to make wiser choices won’t help.

That is where I dropped the ball. I thought this person would change on their own and they didn’t. It never occurred to me that this was something a trained professional needed to solve until it was too late. Now it’s obvious that’s what was required.

I kept thinking there is no way an adult with past tough financial problems wouldn’t be able to learn from those experiences and get on the right track once finally getting out of debt. Well, I was wrong.

If you are going down this path or no someone who is, is important to find out why all the spending is taking place. It may stem from a need for attention, or acceptance or scarcity thinking.

Whatever it may be, get it figured out. Ask for help. Ask for someone to point you in the right direction before it’s too late and all your accounts are overdrawn.

As with all outcomes in life, everything comes down to our beliefs. Many times it comes down to our beliefs about what we deserve and the life we think we should have. It even came down to my beliefs that things would work out or that we could figure it out on our own, or denial this person would be be broke.

Morty Lefkoe’s Natural Self Confidence addresses many of these limiting beliefs and is a great starting point for eliminating what’s holding us back.

Wish you the best,

Robert