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In 1961, the year I was born, our national debt was $289 billion. Today, it’s $21.1 trillion. We clearly have a problem living within our means.
We also have a problem managing our public pensions and our premiere safety net program, Social Security. Consider the following:
According to Bloomberg, only two states in the union have fully-funded pension systems, South Dakota and Wisconsin. The states with the most poorly funded pension systems are as follows:
- New Jersey: 30.9% funded
- Kentucky: 31.4% funded
- Illinois: 35.6% funded
- Connecticut: 44.1% funded
- Colorado: 46.0% funded
- Pennsylvania: 52.6% funded
- Minnesota: 53.2% funded
- South Carolina: 53.8% funded
- Rhode Island: 55.3% funded
- Massachusetts: 57.5% funded
And according to the Social Security Administration (SSA), the Old-Age and Survivors Insurance (OASI) Trust Fund will be depleted by 2035. Once this occurs, the SSA will only receive enough employment taxes (FICA) to pay for seventy-five percent of promised OASI benefits.
The Fiscal Rubicon Has Been Crossed
America is in terrible fiscal shape. And I don’t see how this dismal situation ends well. We are too delicate to handle even trivial cuts in government spending, too closed-minded to abandon the status quo, and too tribal to muster the trust and resolve necessary for a great national undertaking.
My prediction is that we’ll continue as is until the debt, the dependency, and the cultural decline eventually humble our once mighty economy, and all the false wealth created by all the entitlements, all the cronyism, and all the unrealistic promises suddenly vanishes. As the economist Herbert Stein once put it, “If something cannot go on forever, it will stop.” Or as I like to put it, false wealth only lasts until Atlas shrugs or collapses.
If you’re a forward-thinking, responsible person (i.e, a personal responsibility warrior), you must prepare for the elimination of false wealth. At some point in the not-too-distant future, our politicians simply won’t be able to tax and borrow enough to subsidize the defense of Europe, Japan, Korea, and Taiwan—and ensure the profitability of our largest corporations, and keep Medicare solvent for a steadily aging society, and fix our shoddy infrastructure, and bankroll gold-plated public pensions with built-in cost of living adjustments, and underwrite $100,000 bachelor degrees, and support all the people who have drank, drugged, loafed, fornicated, or video-gamed themselves into uselessness.
Stress-Testing Your Financial Situation for False Wealth
So how does one prepare for the elimination of false wealth?
Simple. Put together a spreadsheet of all the money you get from government sources. Then estimate how much of that money will likely go away once Atlas shrugs or collapses. Finally, determine if your current financial situation can handle the elimination of false wealth. If it can, great. If it can’t, adjust.
Here’s the false wealth calculation for Mrs. Groovy and me (see Table 1 below). We currently get money from two government sources. We get a New York State pension and an Obamacare subsidy.
For public pensions and Social Security, I suggest using the unfunded portion of the various plans to determine the extent of false wealth. New York State’s pension system, for instance, is one of the healthiest in the union and is currently funded at 94.5 percent. This in turn means that 5.5 percent of New York State’s pension system is unfunded. False wealth thus equals 5.5 percent. To account for this false wealth, then, I’m assuming a 5.5 percent cut to my pension benefit. If my pension benefit were from New Jersey, I would assume a 60.1 percent cut. If we were talking about my Social Security benefit, I would assume a 25 percent cut (the cut the SSA will be forced to enact once the OASI Trust Fund is depleted).
A government awash in debt and unfunded liabilities can’t afford to give thousands of dollars a month to people who are income poor but asset rich (i.e., people who don’t need subsidies). When Atlas shrugs or collapses, our politicians will be forced to recognize this fiscal reality. One such program that currently mocks common sense and provides a subsidy to rich people is Obamacare. So at some point in the not-too-distant future, I fully expect Obamacare to be means tested on wealth as opposed to just income. How will this shift to fiscal reality shake out? I have no idea. For the purposes of this exercise, though, I’m using the following net worth levels to define “rich” and assign estimates of false wealth.
- Income poor but asset rich (net worth over $500,000): 50 percent subsidy reduction.
- Income poor but asset comfortable (net worth between $100,000 and $500,000): 25 percent subsidy reduction.
- Income poor and asset poor (net worth < $100,000): 0 percent subsidy reduction.
Table 1 - False Wealth Calculation
| Entitlement | Promised Benefit | False Wealth Adjustment | Realistic Benefit | Difference |
|---|---|---|---|---|
| New York State Pension | $1,643/Month | 5.5 Percent | $1,552/Month | $91 |
| Obamacare Subsidy | $2,394/Month | 50 Percent | $1,197/Month | $1,197 |
According to my calculations, a reasonable accounting for false wealth will mean adding $1,288 to our monthly expenses. That’s the bad news. The good news is that our portfolio can handle that hit.
Check out Table 2 below. Mrs. Groovy and I currently need $16,284 annually from our portfolio to cover the portion of our annual expenses not covered by government sources (pension and Obamacare). That sum is well below four percent of our portfolio’s current value. If Atlas shrugged or collapsed, and Mrs. Groovy and I lost all of our false wealth, we would need $31,740 annually from our portfolio to cover the portion of our annual expenses not covered by government sources. And, happily, this larger sum is also less than four percent of our portfolio’s current value. In fact, if we were unfortunate enough to have a New Jersey pension rather than a New York pension, our portfolio would still be large enough to handle a loss of all that false wealth. Mrs. Groovy and I pass the false wealth stress test with flying colors.
Table 2 - False Wealth Stress Test
| Financial Status | Total Monthly Spending ($3,000 Plus The Obamacare Premium Subsidy) | Monthly Spending From Government Sources | Monthly Spending From Personal Savings | Total Annual Spending From Personal Savings | Is Total Annual Spending From Personal Savings 4% Or Less Than Portfolio Value? |
|---|---|---|---|---|---|
| With False Wealth | $5,394 | $4,037 | $1,357 | $16,284 | Yes |
| Without False Wealth | $5,394 | $2,749 | $2,645 | $31,740 | Yes |
| Without False Wealth - New Jersey Pension Edition | $5,394 | $1,705 | $3,689 | $44,268 | Yes |
Final Thoughts
The false wealth stress test presented here is surely crude. But the concept is real. Just ask the Venezuelans, Greeks, and Russians. When Atlas shrugs or collapses, things get nasty quickly. So beware false wealth. Stress test your financial situation annually. And if you fail your false wealth stress test, adjust accordingly—either spend less, earn more, or delay your retirement.
Okay, groovy freedomist, that’s all I got. I hope this post wasn’t too depressing. To end the week on a more upbeat note, then, here’s another episode of Talking Trash with Mr. Groovy. The spirited banter between me and Mrs. Groovy will surely bring a smile to your face. Peace.
“too tribal to muster the trust and resolve necessary for a great national undertaking.”
Maybe not the main point of the post, but this statement resonates. Tribalism is strong and getting stronger with the expansion of social media. We sort everything into “groups” and “lists” and start our own little echo chambers – like financial independence forums! 🙂
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I think the U.S.’ fiscal situation is going to end with high inflation. The U.S. won’t default, so instead it’ll print its way out of its debts. That’s rising inflation.
Troy Bombardia @ Bull Market recently posted…Study: a stock market rally on low volume is NOT bearish
I think a healthy dose of reality is needed sometimes. Great post. It’s easy to get a little arrogant when we are riding the wave of a stock market that keeps wanting to go higher. This will change course at some point, unfortunately. And it will test our mettle.
Scary isn’t it. Right now we have zero false wealth, but if the American government collapses we’re all in for some serious sh*t – meaning the world.
We worry more about cost of living and utilities! We have no mortgage but we pay $650 a month just for water, electricity, and natural gas.
B
Hey, look what I just saw about pensions in Illinois.
http://www.wirepoints.com/harvey-the-first-domino-data-shows-400-of-illinois-pensions-could-trigger-garnishment-by-state-wirepoints-special-report/
Wow. Mrs. G read it to me last night as we were watching Payton Place on YouTube. Very scary.
You noted that means-testing may begin on SS and OC. What you haven’t considered is that the underfunded pensions may apply means testing rather than across the board cuts for everyone. If your $1,643 is above average, your decrease may be more than 5.5%. If you think, they can’t do that, well, the original pension contract will be eliminated, so who knows how much it will be changed under re-organizing.
Fortunately, my $1,643 is below average. I retired with twenty-one years of service. Those who retire with thirty years–the amount needed to receive the maximum pension–will receive roughly two and a half times that amount. So I may be okay. But your point is well taken. The hit I eventually take may be even bigger than the one I’m planning for. It should be interesting, my friend. Thanks for stopping by.
And this just in – a timely article in the New York Times about lardy pension payments to fat cat retirees (in Oregon, but this happens all over the US):
https://www.nytimes.com/2018/04/14/business/pension-finance-oregon.html?action=click&contentCollection=U.S.&module=Trending&version=Full®ion=Marginalia&pgtype=article
Haha! Another article to mess with my sangfroid. Will be reading the article today. But I’m not surprised. I contributed under $10K to my pension over the course of a twenty-one year career. Since Mrs. G will continue to collect my pension after I die, I figure my pension will bring in over $700K. And that’s not a full pension. Had I worked another nine years, my pension would have brought in close to $1.7 million. How does that math work?
Pretty thought provoking article. There is only one direction of the flow of my money as it relates to the system you describe. And that is a cash outflow. Federal income taxes, Social security taxes, State income taxes and sales taxes are by far my largest expenses. Both my state and federal income taxes are going up in 2018. My concern is when the system collapses not that I will no longer receive a subsidy, but what the collateral damage will be. How do I calculate that? Better yet, how do I prepare for it and profit from it? Tom
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“My concern is when the system collapses not that I will no longer receive a subsidy, but what the collateral damage will be. How do I calculate that? Better yet, how do I prepare for it and profit from it?”
Oh, man, those are some poignant questions. I don’t have any answers right now. But you got me thinking, my friend.
Wow, this is an awesome post. I’ve never seen an analysis like this in the FIRE community blogosphere before.
I’m glad that I’m not forced to pay for an annuity — well, except for social security. The pension system is just broken.
Eventually there will be public outrage at people who are living on $40,000 a year but utilizing high ACA subsidies. Colleges might begin to consider retirement accounts as part of FAFSA. You just never know with tax and wealth policy!
“Eventually there will be public outrage at people who are living on $40,000 a year but utilizing high ACA subsidies.”
Agreed, Olivia. Right now I’m 56. I don’t see how my ACA subsidy lasts until I’m 65. But to paraphrase H.L. Mencken, “No one has went broke underestimating the intelligence of the America’s political class.”
We should all go play disc golf! We have discs. 🙂
Cheerio!
I’m never going to live “cheerio” down. Mrs. G has been mocking me all weekend.
That’s a lot for flood insurance! You can always find a basement or some place for cheap, I agree, I’ve done it in SF. My rent was under 1000 – people go crazy at the median rent but I’m like…guys…just because it’s the median doesn’t mean you have to pay the median.
Hey, Lily. Our flood insurance was $1,000 for the year. That comes out to $83 a month. Listen to our video, I don’t think I make that clear. Damn, no one every said vlogging was going to be easy. And you are so right about median rents. With guile and housing hacking, one can do amazing things to lower one’s cost of living.
Way to end the week on a downer;)
It’s hard to picture where it all ends. On the one hand you do have default. On the other you have inflation or increase burden on everyone else. Still more interesting is the problem is not US limited, even though we’ve probably had the most prolific growth recently. It makes you wonder if all governments are equally broke what happens next.
It’s scary out there, FTF. Check out this YouTube clip. China’s total debt is now 300% of its GDP.
7 Charts Show China’s Massive Debt
Mr. Groovy,
Great out-of-the-box analysis. Like you guys, we’d also take a hit on the healthcare subsidy thanks to our assets. I’m not sure what’s going to happen to the GA TRS pension; it’s not looking good. After being touted as a model pension plan for many years, it is suddenly needed of $1.5 billion to “shore it up.” (It’s times like this I’m glad we didn’t pursue 30-year teaching careers in the hope of earning a full pension. Instead, we’ll begin taking our pension distributions at age 60.) As for S.S., we estimate that we’ll get from $0 a month to $1k a month ($500 each).
Predicting the future is hard and frustrating work. If the whole system implodes, we’ll at least have our early retirement memories. Until then, we’ll continue to live our awesome frugal lifestyle in our new right-priced home. If healthcare costs go to the next level of crazy, you’ll find us in Mexico (or beyond). Gotta have contingency plans, right?
I couldn’t agree more, Ed. I don’t trust my fellow Americans (they’ve been coddled too long to stomach the wrenching change needed), and I certainly don’t trust our political class. Money, no debt, resourcefulness, and the moxie to leave is the best way to prepare for what’s coming. Mrs. G have already put Mexico, Costa Rica, and Panama on our radar. Love the way your mind works, my friend. Keep some Coronas chilled for me in Merida. Mrs. G and I may be down there sooner than we expected. Cheers.
Great post, Mr. G. The ultimate pessimist in me didn’t include any false wealth in our calculations. My wife and I also aren’t in any of the governmental pension systems. Heck, I’m only contributing the minimum to my partnership’s defined benefits plan. I figure if SS is around when we retire or my group’s pension doesn’t run out of money, that extra cash flow will be a pleasant surprise.
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“I figure if SS is around when we retire or my group’s pension doesn’t run out of money, that extra cash flow will be a pleasant surprise.”
Very wise, my friend. I shudder to think what’s going to happen to those drowning in debt and living paycheck to paycheck. It’s not going to be pretty.
I love how you presented the idea of considering false wealth in future plans for retirement. My husband and I are unfortunately in the NJ pension system and we don’t even consider that money in our future planning. As well, we don’t consider the money we’ve paid into the system as a part of our net worth either. It just disappears, because who knows what they’ll do with it! We currently plan to save enough to live on outside of any government options (pension, SS, etc) and hope that those options may still exist and provide some cushioning for things like travel or what not. I’ve not come across a way to calculate the concept of not having these additions, so the ‘false wealth’ idea works well.
“We currently plan to save enough to live on outside of any government options (pension, SS, etc) and hope that those options may still exist and provide some cushioning for things like travel or what not.”
Sadly, this is the only rational course one can take.
This post was totally depressing 😉 But a good exercise – why I won’t consider SS in our calculations until we are MUCH older.
You can take some comfort in the fact that the most powerful lobbying group in history promises (now) to support SS. The lobbying group? AARP
Like the qualification, Steve. AARP supports SS now. There’s no guarantee it will be supporting it twenty years from now.
I hear ya, Angela. That’s how Mrs. G and I based our retirement. We asked ourselves, “Can we have the retirement we want with nothing to count on but our portfolio?” Once the answer was “yes,” we retired. We look at my pension and our Social Security as bonuses.
Absolutely brilliant! If we were to remove our false wealth, we’d be OK at 4%, but our desired conservative 3% could be a stretch. Good reason to keep spending low in the first few years!
Crooked Creek Park is beautiful and sounds like there are some lovely birds there. Also great to hear you and Mrs. G expound on the awesomeness of geoarbitrage. Making sure the new home has low stress is definitely a must.
Cheerio!
Love your strategy, Mrs. G. Live simply and relish the free stuff (like bicycling), especially during the first few years of retirement. There’s no better way to ensure the the long-term survival of one’s portfolio.
Whoa – I love this! Gonna do my spreadsheet right now. But there’s another thing looming for some states, and that’s huge natural disasters that could wipe out the state economy.
I’m in Oregon (80.5% public pension funded as per the article cited) and have a pension coming (I’m the same age as Mr. Groovy).
But we are due for a giant earthquake (read this totally scary and beautifully written article in the New Yorker: https://www.newyorker.com/magazine/2015/07/20/the-really-big-one)
And if that happens then the economy of the state will take a catastrophic hit. What happens to the pension funds then?
And while I’m on this cheery note – climate change will have a slower (but relentless) effect on many other states as their public funds will be increasingly diverted to fighting natural disasters (fires in CA for instance) while trying to manage disappearing coast lines and drought and other problems.
Meaning those public pension funds will have even less chance of moving towards full funding going forward.
Yes folks, Susie Sunshine here just chiming in…(sorry!)
Hey, Marcia. Great point. Natural disasters are never fun. But imagine how quickly we could recover if our national debt were zero! Natural disaster plus a national debt of twenty-one trillion equals a lot of pain.
Great article! So few people are aware of this and unfortunatly it isn’t covered well in the mainstream media. Creating awareness around this is important on so many levels. I recently wrote a post on this at http://bit.ly/2Gw0KKL. Would love to hear your opinion
Hey, Roma. Thank you. I’ll check out your post today.
Just read the article. I weep for my country. Great analysis, and I think your suggestion to downsize and pay off debt is spot on. Things are going to get rough. Those with no debt and small housing costs will be in the best position.
If (or I guess when) that happens, the stock and bond market will take a huge hit too. Can we really count on our portfolio at that point?
Where can we hide our money? Overseas? That might not work so well because it’s a global market now.
i figure both markets will suffer short-term disruption then resume secular growth trends. i figure bonds are prone to inflation risk & government manipulation. that’s why i avoid them. equities are shares in companies holding tangible assets whose values rise with inflation, thus I see stocks as inflation-safe, despite their volatility. i just have to make sure I’ve got cash, side-hustles, and rent income to weather bear markets and have some extra to snap up bargains during the disruption.
I like it. Cash, side-hustles, and rent should ease the pain.
Good question, Joe. I don’t know. The stock and bond markets should take a big hit. My only hope is that the hit is temporary.
The thing is, you Mr. Groovy, you are Atlas. If (whoops, I mean when) the shortfalls need shoring up, I don’t think that everybody will get the same exact 25% haircut. It will come mostly from those of us that do have more to “give”. And that’s you. Me too.
We have about 70% of our assets in IRA money. I suspect it will look very enticing to those taxing authorities when the time comes. When things start to fall apart, all of our income sources will be up for grabs.
yup, those of us who are more like the ant than the grasshopper are Atlas and our IRA accounts are going to be targeted. we want our stuff in accounts that cannot be stolen. taxation and inflation is theft.
“Taxation and inflation is theft.”
Couldn’t agree more, my friend. Sadly, anyone under 40 has been educated to believe otherwise. And now most of them want to be slaves to the compassion-industrial complex.
You are so right, Susan. You, me, and a lot of the FI community are Atlas (i.e., big juicy targets for “spreading the wealth”). Now I’m even more depressed.
“If something cannot go on forever, it will stop.”
Great line. I agree with you that it will stop, and it will stop Hard. Can’t tell you when, but best to be prepared.
The other potential: we crank up the printing presses and print out way out of the mess. Inflation would go hyper, and those on fixed pensions would starve.
Concerning times. Can we go back to the Fight-O-Meter and 10-gallon hats, please? It’s SOOO much more entertaining.
Whoa! Good point about the printing press. I didn’t consider that. Hello 70s! And, yes, 10-gallon hats and the Fight-O-Meter are SOOO much more entertaining. Ruminating on our terrible fiscal condition is no way to start the weekend.
This is an excellent idea, thanks. We often take many “safe, solid” things for granted. My disabled wife currently has a budget from the state that allows her to pay someone (me) to caregive for her. They announced recently that will likely go away for people in her situation – disabled with assets. It’s not final yet, but that’s a substantial chunk of money we may no longer receive. I’ve run the numbers and we’ll be OK, but it’s a bit of a shock to our system when you’ve forgotten it might happen!
I’m sorry to hear that, Ron. I understand the logic behind the state’s move. But really? The state wants to begin its crusade against fiscal irresponsibility by screwing with disabled people?
Interesting exercise. Love the data on the state pension plans. I haven’t seen it before. I wonder if those states, having success like NY share information with those like NJ that are not. Stress testing your situation is important. Its one of the reasons I like tracking my net worth, a big picture snapshot of our finances to make sure we are on course. Crooked Creek park was jumping in the latest episode. 🙂
Brian recently posted…How to Teach Your Kids Good Money Management Skills When Yours Suck
Can’t say enough about tracking one’s expense and one’s net worth. I’m with you, Brian. In these times, flying blind is beyond reckless. It’s criminal! And, yes, Mrs. G and I caught Crooked Creek at a very active time. Spring has finally broke through and mornings are starting to heat up. It brings out a lot more nature lovers in the morning. Thanks for stopping by, my friend. Have a great weekend.
Well this is depressing, well at least it is for those of us who don’t have the “extra wealth” to cover a shortfall yet.
My big fear is that the stock market crashes along with these government benefits being reduced. That’s a double whammy that would crush many of us.
With that said , I’m off to earn a couple of greenbacks and do my part to fund Social Security.
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a market crash is an opportunity to snap up bargains. if you have short term needs for money, never put that money into a volatile or non-liquid investing vehicle. that’s a good reason to keep a lot of cash and have income generating real estate.
despite its volatility the stock market may be the only inflation-safe productive asset. vtsax for the win.
If you’re retired and living on your assets they are already going to be invested. Even if some are in more conservative investments like bonds. A crash would help those still building savings. It would not be good for a retiree.
Jason@WinningPersonalFinance recently posted…How I Used Travel Rewards to Save $2,809 on My Dream Ski Vacation
Fair point, my friend.
Keep the powder dry. Right now I have about twelve percent of my portfolio in cash. The market’s incredible rise since the election made me lament that amount of cash. But when I think of our national debt, I shudder and wonder if I should increase my cash holdings to twenty percent of my portfolio. Damn! Being a sound investor is hard. Who knew?
“With that said , I’m off to earn a couple of greenbacks and do my part to fund Social Security.”
In my more cynical moments, I can’t help but look at Social Security and view it as inter-generational slavery. Current beneficiaries live off the sweat of current workers, and current workers don’t revolt against this bondage because their turn to join the master class will come.
It sucks being cynical.
Those statistics for those 10 states is absolutely terrifying…
In addition to adding personal finances classes to our youth in high schools, maybe we should add a “preparing for the inevitable” class that teaches kids to build their financial impendence without assuming getting ANY subsidy from federal/state/local governments.
It’s truly scary that more people aren’t that concerned with our continuously rising debt level. Sooner or later the bill is going to come, and the citizens will be the first entity the government will look at to pay it!
Love the way you think, Sean. For years now I’ve been advocating for our education system to start teaching wealth studies and freedom studies. We got to teach our young people how to create value and how to defend their liberties. But right now our schools are teaching children how to be debt-laden consumerists and how to be completely dependent on the government for physical and economic security. Sigh.
Hey Groovies,
My day job is at a bank in the stress testing department… maybe it’s time for me to build a robust personal stress testing calculator 🙂
I’m scared about what is going to happen in the next 10 years with regards to debt. $21 trillion is 21,000,000,000,000. That’s a lot of zeros.
Right now I’m looking at silver, as well as other alternative investments to help hedge a little bit.
Thanks for the post
Erik @ The Mastermind Within recently posted…Think Critically. Personal Finance is Personal. Do What’s Right for You.
crypto may be a better commodities play than metals. real estate is a good bet and working in the bank gives you a window into foreclosed properties that may be bargains.
Hey, Steve. I’m invested in lithium. With the EV revolution just around the corner, that should make me rich, right?
Hey, Erik. I like your thinking. As the dollar becomes increasingly worthless, other things will surely retain their value. Historically, that has been gold and silver. So I don’t think you could go wrong there. I’m also thinking farmland and real estate. I guess the key to weather the coming fiscal crisis is to diversified beyond stocks, bonds, and cash. The next couple of decades should be very interesting, my friend. Thanks for stopping by, Erik. Always a pleasure hearing from you.
Feeling a bit pessimistic today? 🙂
Interesting thoughts for sure. The number of people depending (or receiving at all) pensions is continuing to shrink so hopefully a meltdown in that space won’t have nearly the impact that it would have a couple dozen years ago.
If (when?) it does happen, it would be interesting to see how the public markets respond.
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Yeah, this definitely wasn’t one of my more uplifting posts. I think you might be right. I wouldn’t be surprised if sometime soon new government employees will only given the option of a 403(b) defined contribution retirement plan. Your grandchildren will find defined benefit retirement plans as alien as rotary telephones.
The situation when Atlas Shrugs will be one of great economic and monetary upheaval. Thus we should expect our dollar-denominated assets to take a haircut. Probably in the form of inflation. Read “The Black Obelisk” by Erich Maria Remarque. In particular, he speaks of pensioners committing suicide as their annuities and cash accounts become worthless. Conversely, those with foreign monetary assets find they can snap up bargains for tangible goods.
Most of us in our age consort recall inflation thanks to failed monetary policies of the ’70s. However, this memory does not take into account the Argentine’s lessons in hiding the theft of inflationary monetary policy.
Don’t expect spiking gas prices and lines. It’ll be different because of the secular deflationary trends of better technology and more efficient manufacturing. Expect health care costs. And expect insurers to either go bankrupt or raise health insurance premiums drastically while limiting inflation adjustments to less-than the real rates.
We’ll want to have in your possession assets that cannot be taxed or stolen. A wise man once spoke of the value of learning SQL. Learning is both a protection against Alzheimers and an asset you can trade for goods and services–provided it’s something useful.
A second asset to acquire and carefully guard is good health. I’m writing this from my treadmill. I’m on a Low-Carb Healthy Fat (LCHF) diet. I fasted for two 24+ hour times in the last week and only eat one-meal-per-day otherwise. I have a set bedtime for the first time since I was a kid.
Insulin resistance is a huge dragon to fight. It can occur in the muscles, liver, and brain. Feeling brain-fogged lately? Blame the doughnuts. The same enzymes overloaded by insulin resistance in the brain clear amyloid-betas in the brain, too. Using the little gray cells burns glucose, reduces insulin, and leaves those enzymes free to clear (during sleep) the stuff from which Alzheimers’ plaques are built.
What to do I do about financial stress? Fasting and prayer: It reduces insulin and chronic stress. If I lose my health, I’m screwed.
“What to do I do about financial stress? Fasting and prayer: It reduces insulin and chronic stress. If I lose my health, I’m screwed.”
I was hoping you’d chime in, my friend. Awesome comment as usual. Couldn’t agree more. Mrs. G and I bought three acres in the country. Our game plan is to grow more of own food and avoid refined sugar and carbs. Being healthy and somewhat food independent should come in handy when the fiscal apocalypse arrives. Never heard of “The Black Obelisk.” I’ll check it out.
GREAT post Groovester! I thought about this before and I will (might?) get two sources of income from the gubment one day. Social Security (cough.. cough) and a gubment pension.
But I’ve calculated my FI situation both with them and without. I’m still financially independent without them, but I’d obviously like to have them.
I honestly don’t expect any SS, I think the realities of that system are too stark. By the time I’m 62 it could well be gone, or by then they’ll just have moved the qualifying age to 72 to keep it alive.
As for my pension, I think my chances of getting that are good. I’m going to try to stay a glass-half full guy 😉
Love your strategy, AF. It’s the exact same strategy that Mrs. G and I are following. If it’s any consolation, I firmly believe Social Security and government pensions aren’t going way. They just won’t be able to pay out the benefits being promised. How much of a haircut will people get? Good question. I think somewhere between 25% and 50%. But only time will tell, of course. Stay vigilant, my friend. The future belongs to those whose income is least dependent on government coercion.
As if the forecast wasn’t enough to send my weekend into a tailspin, you had to go and write THIS piece? Thanks man. Really. Thank you. Take a bow. 🙂
I LOVE IT and couldn’t agree more (swallowing my grief) but we often tend to put it conveniently out of our minds because we want our spreadsheets to be sound. I’m not sure if this will “save” us, be our focus is creating half our wealth via cash flow vs. equities. Hopefully prepared ENOUGH?
I’m sorry, Cubert. I didn’t mean to end the week by being a Danny Downer. But I see a massive fiscal tsunami heading our way, and I just felt compelled to issue a futile call to seek higher ground. Oh, geez. Now I’m even more depressed. I think this is why God gave as alcohol. Peace, my friend.