Therefore do I say that it behooves a man to make preparation for a suitable income in the days to come, when he is no longer young, and to make preparations for his family should he be no longer with them to comfort and support them.
- The Richest Man in Babylon
In case you are just tuning in, I’ve been writing about The Seven Cures for a Lean Trading Account based on the advice from The Richest Man in Babylon. So far, we have looked at setting aside one tenth of our income, limiting our expenses, making our savings multiply, guarding against catastrophic losses, and making our homes an investment.
The sixth cure for a lean purse discussed in the book involved preparing for both retirement and the unexpected.
The unexpected part is easy. Until you become wealthy enough that money is not a concern, you need to have enough life insurance to ensure that you would be leaving your family on strong financial footing if something were to suddenly happen to you.
Dave Ramsey strongly recommends term life insurance and explains why whole life is a raw deal. As with most things in my life, I have no desire to analyze the details on my own. I’ll take Dave’s word for it.
The retirement side of this is a bit more complicated. No matter how much you have saved for retirement, you’ll probably end up wishing you had more. My boss has a goal that he wants to be able to afford a 24 hour bedside nurse should he ever need one. That shit is expensive, so he keeps saving well past the point that most people would call ridiculous.
Most of my readers here fall into two categories. Some are very successful and have well thought out plans for retirement and plenty of capital to ensure that they can live comfortably. Bravo to them. They’re an inspiration to the rest of us.
The other half of my readers are more likely to be living paycheck-to-paycheck, but working their asses off to break out of the cycle of the rat race. These are the people who need to heed the advice of the sixth cure for a lean purse.
Going on an elaborate caribbean vacation is great. Paying cash for it is even better. But what good will that vacation be when you aren’t physically able to work anymore? Will you still be able to meet your obligations without your income from your day job?
My plan is to work as hard as I can for as long as I can stand it. But I am well aware that there is only so much more restaurant management that I can physically take. The hours are demanding and it keeps me on my feet all day and all night.
In addition to saving as much as I can, I am also focused on developing an income outside of my primary income that will give me something to fall back on should my legs, knees, and ankles give out on me. What’s your backup plan?