At 59, I never feel old.
I exercise, eat well, try to stay connected socially – all the “must do’s” the experts recommend for staying healthy later in life. If I manage to get a good night’s sleep, my energy level stays pretty high. Luckily, no major aches or pains limit my life (yet).
But sometimes I think I’m just too old.
Too old to start a new venture. Too old to master technology. Too old to reach my financial goals.
I listen with awe to Financial Independence podcasts featuring people in their twenties who have paid down their student loans, saved more than half their incomes, and invested with an eye to retiring by the time they’re thirty.
The FI community attracts a young crowd and they’re killing it.
Me, though? When I was in my 20’s, (and 30’s, and 40’s), I paid scant attention to my financial future. The “Cinderella Syndrome” had a huge and ultimately negative impact on my life. A child of the 60’s and 70’s, I grew up assuming my Prince Charming would save me from having to worry about money.
Well, Prince Charming must have missed my house when he went looking for the girl in the glass slippers.
I ended up driving my own financial life, often blindly. I made some good decisions, mostly by dumb luck, like buying my two-family house and renting out half of it. I adopted my kids alone (not a good financial decision, but the best thing I ever did by far), and started my preschool.
But I didn’t make much, or focus on increasing income, or invest nearly anything. And while I didn’t usually spend stupidly, I did spend blindly, without much of an idea of why I had little left at the end of the month.
So is it too late now? Can people starting late – really late – catch up?
Mindset of FI for Older People
More than anything, mindset gets in the way.
People my age just starting on the FI journey have reached a point in life where we don’t want – and don’t have time – to sacrifice for the next 15 years to reach financial independence. I don’t want to eat ramen or sell my car or give up occasional dinners out or trips to New York City. Life is short, and I want to live it well, now.
Mostly, I won’t stop spending money on my kids, who are not quite grown up and independent yet. That’s where the bulk of my discretionary spending goes: dance lessons and pointe shoes and summer dance intensives across the country for one; college tuition and camping gear and plane fare to New Zealand for a semester abroad for the other.
So what to do? I’m focusing on three areas:
– Making more money;
– Cutting expenses in a way that doesn’t make me live like a hermit; and,
– Investing for the long run, even at my age.
Make More Money
Since I’m not going to move into a tiny house or stop traveling or never go to restaurants – or stop paying for my kids’ tuition and activities – I have to make more money. I just have to.
And this is where the biggest mindset issue interferes.
I’m too old.
Who do I think I am to start a new business?
I’ve never made a lot of money, what makes me think I can make more now?
No one will take me seriously – I’m just too old.
Older People Have More Success – Really
Did you know that researchers from Northwestern, MIT, and the US Census Bureau, who study startups in the U.S., found that most successful entrepreneurs are middle-aged, not young?
And that a 50-year-old entrepreneur is almost twice as likely to start an extremely successful company as a 30-year-old? (Or, for that matter, a successful side hustle.)
You don’t have to be the CEO of a Fortune 500 company for 25 years to start a successful business in retirement or close to it. You get to decide the meaning of “success.”
Success for me means something that matters to others as well as myself. I’ll be successful if I can make some extra money, pay down debt and save, breathe a little easier. If I’m not bored or think, “Ugh, I have to work.”
So what have I done to increase my income? I’ve started a couple of side hustles, and you can, too.
Start a Business – A “Side Hustle” – Even a Tiny One
I love words, the nitty gritty of grammar and word usage and how writing sounds. For years, I’ve edited my friends’ resumes and cover letters, my extended family’s college essays, and made suggestions to my kids on their writing for school (with mixed results on that one).
I love to write, but I really love to edit.
So I threw an ad on craigslist looking for people who need help editing college papers (making it clear that I wouldn’t write the paper for them, just help with organization, word usage, grammar, etc).
Almost immediately, I got a job.
Someone wanted editing done on the final stages of a Ph.D. dissertation. Problem? It was due the next day. Since it was my first paid job, I took it, and stayed up most of the night (won’t do that again).
But I made $250 for a $5 ad. Not bad!
My client was happy with my work – all of the other stages of her dissertation hadn’t passed the first round and had needed to be reworked, but this time she passed on the first submission. Win! She contacted me a month or two later for help with a cover letter.
I’ve also done some parent coaching, but I don’t love that. I feel like I need a relationship with the families to make any kind of difference, so I coach (for free) parents of kids in my preschool, but have stopped looking for outside clients.
I’m hoping to make some money from this blog if it finds an audience that thinks it’s helpful.
As I’m just starting out, I don’t have any affiliate links, but eventually I hope to make affiliate relationships with a few companies. If I write about and link to certain products (only those I would use myself!), I will get a small commission when people click through from my site and buy that product, at no extra cost.
That’s later in the game, though.
What can you do?
Help others plan and implement their gardens?
Become a personal shopper?
Start a blog?
Cook for a few busy families a couple of nights a week?
The possibilities are endless. The beautiful thing is you don’t have to spend a lot of money. You don’t have to invent a product and get it manufactured (although you can do that, for sure, if you want).
All you need is an idea, a way to help people solve some problem. Put an ad on craigslist or on your local community’s Facebook group, and get started.
You’re not too old!
You’re actually at the ideal age to start something and succeed.
Cut Expenses Without Affecting Your Lifestyle
While I’m at a place in life where I’m not going to whittle my expenses to the bone, there are lots of easy cuts to make. Every penny I save I’ll apply to debt reduction, and once I pay down my home equity line of credit, I’ll apply those savings to … saving. And investing.
Here are six ideas for getting started cutting expenses, in ways that will not negatively affect your life (or will have only a minor impact):
1. Cut the cable bill
Most of what I want to watch I can see on my computer through Amazon Prime or Netflix (at $9 to $16/month, a lot cheaper than the average $85/month cable bill). I don’t watch much TV, so this one’s easy for me, but might be more difficult if you’re a sports fanatic who needs ESPN.
2. Reduce your Internet bill
Your first step in reducing the cost of Internet service is finding a promo from a different company, then calling your current provider and asking for a matching price reduction. If they don’t meet your request, switch.
Check this article out for a good overview of different plans, and the trade off between speed and price for each one.
Stay tuned – I’m going to do some research on this and will share my findings (and comparison spread sheet) in a later post.
3. Reduce your cell phone bill
Go prepaid and you can slash your cell phone bill. How does $35/month sound? Or less than half of that if you don’t use much data. Here’s a good overview to get you started.
4. Switch out your bulbs to LED
LED lightbulbs use 75% less energy than incandescent ones, and they last 15 times longer.
I’ve seen a package of 24 LED bulbs at Home Depot for as low as $1.00/bulb. The ones I plan to switch to might cost more, because I want the same warmth of light I get with incandescent, and I want dimmable bulbs, but I’ll still reap long-term savings.
5. Cut Out Unnecessary Subscriptions
I looked at every subscription I pay monthly – some that I’d forgotten about, but they kept deducting money every month from my bank account! – and got rid of those that don’t add to my life.
One example: my subscription to my city’s newspaper cost me $26/month. I found out I could read any article I want, for free, on my local library’s website.
It was kind of a pain – I had to log in to the library site each time, click through to the paper, and could read articles in text only, with no photographs. I also couldn’t do my beloved crossword puzzle. But I lived with it for a few months.
Then the paper sent me a notice about a $4/month special for 6 months, and I grabbed it. When the special expires, I’ll go back to reading on the library’s site for a while until another special pops up.
6. And Travel Hacking, Of Course
If you haven’t already, go to the ChooseFI travel rewards free online course. Only do this if you will absolutely, positively pay your entire credit card bill every month so you don’t incur interest!
Travel hacking – getting credit cards that give you big sign-up bonuses in points redeemable for airfare, hotel rooms, and more – allows you to travel for free, or close to it.
So far, I’ve paid for my daughter’s flight when I flubbed up and booked her from Boston to Indianapolis instead of the other way around, and noticed this two days before she was supposed to come home for Thanksgiving. Ouch!
It cost me 50,000 Ultimate Reward points – not how I intended to spend them – but I got her home for an extra $11 in fees (I didn’t get the original flight refunded, unfortunately), instead of close to $500 for a last-minute booking.
Lesson? First – don’t make stupid mistakes. Check and re-check when you’re booking a flight. Lesson two? Build up a store of those reward points. Even if you don’t have immediate travel plans, they will come in handy!
These are just a few of many ways to save money without living like a hermit. More in future posts …
Invest for the Long Run, Even at Your Age
The problem is time.
We all know that if you start investing in low-fee index funds when you’re 20, and contribute regularly over many years, you’ll be sitting pretty at age 60.
When you’re 50, though? Or 60?
If – and this is a big “if” – you have any other income to support you, investing can still be a long-term project.
Living Longer and Healthier
If you’re lucky – and privileged – you’ll live longer and healthier than any previous generation. Researchers have found that people with a college degree or more have the best health and live the longest.
We have a lot of work to do in this country to even the playing field. I recognize my privilege and realize that I’m very, very lucky. If I can keep myself healthy, I’m hoping to live for a long time yet.
I’m not counting on my investments to retire at 65 or even 70 (I don’t have enough!).
Once I pay down my debt, including my mortgage, and I retire from my preschool, I plan to live on the income I receive from my rental unit, plus Social Security, plus Airbnb-ing my basement – and hopefully, money from my side hustle.
So my investment plan, even at my age, includes long-term growth.
If you invest aggressively now, and contribute money regularly to your index funds, or more diversified low (or no!) expense funds like these from Fidelity, you still have the ability to ride out any downturn in the economy. With some luck, in another 10 years, or even 15, or (if you’re only 50) 20, you should have a nice pile of dough.
If you’re counting on your investment income for living expenses in the next few years, though, you’ll of course want to take a much more conservative approach, and might want to check out Vanguard’s Target Retirement Funds.
More on investing for people over 50 in future posts …
You Can Achieve Your Goals – Even Late in the Game
When I started this blog, I knew nothing about WordPress. Having abandoned WP on a previous blog because it just seemed so darned hard to learn, I had another go at it this time around.
“You’re too old to learn this,” that little voice in my head kept saying. “Leave it to the next generation. You’ll never get this blog up and running.”
For two weeks, I repeatedly cursed at my computer, walked away in frustration, and felt defeated – but I kept at it. I diligently watched the videos on a really, really good blogging course I’m taking. I Googled my questions.
I kept going.
And here I am. I’m no WordPress expert – not by far! – but I get the basic concepts. I plan to keep at it, keep learning, and keep posting.
If I can do it, you can, too. You’re not too old.