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Jan 2014 Newsletter: Insights on Retirement and the American Culture
January 02, 2014
Hello to all my frugal friends:

Happy New Year to everyone.

Do you see that Great White Turkey in the photo above? Well, the other turkey is me, and I've been kicked in the butt again by a subscriber. She was wondering, very politely, when the newsletter was coming her way. My bad. I've been up to my neck in foreign travel and office work and that has caused me to let the newsletters slide.

No more sliding. No more foreign travel. One more New Year's resolution...the newsletter will go out each month.

I'm changing the format so it will be easy to keep this going as a monthly activity. It's simple, each newsletter will contain an article (or two) that I've written on the topic of personal finance, but doesn't appear on Frugal Living Freedom.

This month I want to look at two issues by providing two separate articles. The first issue is that of retirement and how one couple did this with great success. What is most striking about this couple is their deliberate focus on the end game. I think there are lessons to be learned here for all of us.

The second issue is how our government in general is simply a reflection of American culture, and how we're clearly headed in the wrong direction. We couldn't operate our households like we do our national checkbook and credit card account. Of course we could, but not for long.

Let's dive in.

Financial Planning for Retirement

Financial Planning for Retirement – Be Conservative, Responsible, Realistic, and be Successful

by Clair A. Schwan

Not long ago I had the good fortune to gain insight with respect to one family’s financial planning that was centered around retirement. This had been a young couple with children, with both the husband and wife having lived through the Great Depression and bleak economic times surrounding World War II. Talk about a life lesson in stretching a dollar!

What struck me as unusual was the constant focus, from the very beginning, on retirement and taking care of their children. It was unusual in a very good way. This couple knew that the future was coming. They knew that they had to take care of themselves. They knew that their children were their own obligation. How very different from many attitudes today. How very refreshing to learn of this and their approach to successful personal finance and comfortable retirement.

How very depressing to think that this level of personal responsibility and integrity is on the endangered species list today.

So, what were the keys to success for this retired couple? There were several that I could spot. I’ll share them with you.

  • Frugality in everything they did.
  • Never having any consumer debt – ever!
  • Taking the long view of work and family life – being financially prepared to live a comfortable retirement – all the while dealing with immediate and pressing matters like feeding the family and changing diapers.
  • Living a good life that was created through effort and know-how and determination, rather than simply purchasing it.
  • Insurance poor – having sufficient coverage to make certain that unforeseen circumstances didn’t consume income or erode accumulated wealth.
  • Steady savings and conservative investments.
  • Constantly working towards paying off the mortgage – in advance of retirement.
  • Having a company pension, but never counting on it as a source of income for retirement – instead, creating a separate retirement savings account.
  • Preparing for the family’s financial future through life insurance and savings.

To the average Joe, this could sound like a goofy and challenging way to live. It doesn’t sound that way to me. It sounds like a conservative approach to personal finance and a formula for successful retirement.

Think about it. You’re either getting a financial foothold, or you really don’t have much of a grip to speak of. And, that “grip” is important. Money doesn’t buy love, respect, satisfaction or happiness, but it can and does buy just about everything else. So, it’s clear that good money management is essential for comfort, security and peace of mind – just what you’ll be looking for as you head into retirement.

I am reminded of an old gent back in California who was from “the old country.” He used to drive around in a beat up International pickup truck. An associate of mine said, “I don’t know why he drives around in that clunker. He’s a millionaire. He owns a lot of property in town. You should see the nice house he lives in.” Pointing to the man’s old pickup truck, I said, “That’s one of the reasons the guy is a millionaire.”

Congress, American Culture, and Personal Finance

Congress, American Culture, and Personal Financial Responsibility; Our Cultural Reflection, Going in the Wrong Direction

by Clair A. Schwan

With all the talk recently about deficit spending, the national debt, the need for a balanced budget amendment, and the western world operating largely on borrowed money, two things come to mind. This might be a good time to share my thoughts because there are lots of lessons for all of us who have concern about our financial condition – at home and on a broader scale.


My first thought is that those in the U.S. Congress are largely a reflection of the “buy on credit and have debt around our neck” culture we have in America. And, we’ve had this culture for generations. So, this whole deficit spending, debt ceiling and national debt mess shouldn’t be a big surprise.

I am reminded of an episode of You Bet Your Life, a black and white television program from the 1950′s hosted by an aging Groucho Marx. During one episode, when he was engaging in small talk with the contestants, the audience learned that they were recent immigrants from Europe. More importantly, they learned that the man wanted to wait until the couple had enough money to buy a dishwasher for their home, while his wife insisted (repeatedly) that since they were now in America, they were going to do things the American way and buy on credit.

About fifty years later, the late George Carlin reminded us that politicians don’t come from another reality, they come from American homes and schools and communities, so whatever faults we see in government are just reflections of the kind of people we’ve raised in our communities. It’s an over-simplification, because there are other factors that come into play, but there’s a kernel of truth in his observation to be sure.


My second thought is to imagine an American family behaving much like Congress. Wouldn’t that be odd? If we could peer in on such a family, what might we see?

I think we’d see that the wife is worried sick about her irresponsible husband who just can’t stop spending beyond their means, despite being many tens of thousands of dollars in debt and having no cash reserves. On top of it all, we’d see that family income has been reduced as a result of the failing economy and yet he continues to spend like a drunken sailor. She would likely complain that he’s taking out personal loans at private lending establishments to pay for lines of credit he’s already maxed out at the bank. Her complaints would also point out that he’s getting cash advances from one credit card to pay the minimum on another, and he has mounting fees at the bank because of being regularly overdrawn on the checking account.

All the while, he would explain to his wife that the only answer to their financial crisis is to have the credit card companies raise the limits on their card, and to borrow more money from various sources, otherwise the family won’t be able to pay rent, buy groceries, stay current on their telephone and utility bills, or meet other financial obligations.

From where I sit, that’s about the size of it. Some in Congress have already warned us against not being able to make good on payments for Social Security, Medicare and military personnel unless they can rack up more debt. I always thought that the first thing to do when you find yourself in a hole is to stop digging.


To be sure, we’ll all have our own “take away” from this, and here's mine.

  • The behavior of our government is to some extent a reflection of our culture. Change our culture, and we change leadership qualities of those whom we elect to represent us.
  • It wouldn’t hurt to learn more about who we are as a culture from others outside of our country. After all, it can be difficult to see the forest because of the trees.
  • We certainly don’t have the luxury of behaving like some members of Congress, but we most certainly should be doing what we can to insulate ourselves from the backlash that will come our way as a result of their irresponsible decision-making over these many years.
  • Perhaps we ought to get a bit more involved as citizen lobbyists. Let’s be that protesting wife who has good reason to protest. Indeed, we have a grievance that needs to be redressed. Our responsible members of Congress need our encouragement and support too, so let them hear from us. Many of us have given those in government our tacit approval for their irresponsible ways, and as a result, we’re getting what we deserve.
  • Let’s become more visible as a counter culture in America. To live without debt, to have sound finances, to be financially prepared, to be free to choose how we spend our money, to live with peace of mind about our pocketbooks; all of these things require some level of fiscal conservatism, so let’s show others what kinds of beliefs, attitudes and actions can lead to success in this arena. Let our good examples of personal responsibility and financial sanity help create future elected officials who understand what a hole looks like before they start digging, and who appreciate that the top priority, when deep in a hole, is to stop digging.
It’s my hope that each year there will be an increasing number of people who realize that personal financial responsibility can and must come about through wise decision-making, not because we find ourselves in a deep financial hole one day. There are plenty of lessons out there for us to learn from, so we’re not necessarily doomed to replicate the sad affairs of others. And, we certainly don’t want to imitate the behavior of our “leaders” in government.

Up Next

What I'd like to do in the upcoming newsletters is provide a couple of lengthy articles from a series I'm writing on economic and financial preparedness. It's a series of about 40 articles, and again, this series won't be found on the website.

The reason I'm offering this series is because I think being prepared from an economic and financial perspective is of the utmost importance in light of our current state of affairs: the economy isn't recovering; our piggy banks are feeling the pinch; and, our fiscal and monetary policy in Washington D.C. is doing nothing to help matters, instead it's accelerating our troubles.

My personal view is we're in for big trouble in the not too distant future. I'll bound the problem by saying we can screw around like this for perhaps the next 15 years, but we might see the chickens come home to roost in as little as 5 years (and we're seeing plenty already). No matter when this economic and financial rotten egg gets laid, we're going to get splashed with it. The only reasonable thing we can do is be prepared. Those who are prepared will fare much better than those who can't (or refuse to) see the writing on the wall.

In this series, I'll lay out some essential groundwork, a general plan for being better prepared, then spell out specific approaches one can take to ride along better in our changing economy and fare better as a consumer as well.

Thanks for being along for the ride here at Frugal Living Freedom, and I hope your adventures in frugal living lead you to the kind of lifestyle you would like to have for yourself and those you care about.

I wish you all the best,


P.S. If you are receiving this in text format, the links to the new pages might not be complete. You'll have to copy and paste the link into your browser in order for it to take you to the correct page.

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