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A Lot of Money “Answers” Are Subjective

by J. Money on Tuesday, July 23, 2013

what do you see inkblot

The more I read and respond to readers’ questions, the more I’m realizing that all of this money stuff is pretty subjective. Especially when the questions revolve around “numbers you need” to do X, Y, or Z like during retirement.

WE’RE ALL SO DIFFERENT! And we all require different amounts depending on our own wants and desires and habits too – especially depending on the type of lifestyle we hope to have by then (will it be the same as now? BETTER? Simpler?)

Here’s a few questions (along with my answers) I pulled out from my last email convo with a reader of this site – not the same one who was freaking out about money last week :) This guy’s looking to semi-retire in 4 years once his eldest has graduated, and he’s thinking of starting a new business at that point too. You’ll see what I mean about things being very subjective, at least to me…

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What is the target home pricing for someone in our income range ($62,000)?

I have no idea :( But luckily it should be an easy Google search! :) To me the “target” is always whatever I’m comfortable with and want/need, which of course will always be subjective. But that’s what I go on as I don’t really care for “averages” or what others are doing as much (though I’ll admit it’s interesting to read and blog about). To me, any house under $100k is a miracle as places around here can go for $300k-$3 Million! It’s pretty scary.

So is 8% of savings per year to live on a safe assumption?

Another one I don’t really know, though I have seen some pretty good retirement calculators out there that help with this (check out Bankrate.com). Again this is something that will vary on your personal expenses and how healthy you are/how long you think you’ll live, and what type of “retirement” living you think you’ll want to do by then.

Luckily it looks like you won’t be sitting still and that you’ll be getting into something (aka a side hustle) which will add income, but the only time you’ll REALLY know is when you’re there smack in the middle of it ;) So in the meantime you just have to guestimate and play around w/ the numbers like you’re doing. I doubt you can do much hardcore savings in just 4 years and get it where it needs to be, but combined with working longer or a new biz taking off you never really know. I’d def. run some calculators and play around more and go from there.

I have said over and over that we would need a minimum of 18 mo’s business cash reserve and 12-18 mo’s personal savings in order to do any venture, as my “security (cash flow) nerve” is very sensitive. LOL… Whats your opinion on the numbers here?

My opinion is completely the opposite actually ;) I always say I need $0 money and $0 savings in order to do a business venture – but that’s only because a) I do all business ventures online (so I need like $100 or less to get a domain name and hosting and stuff like that), and b) I do all my ventures on the side where money doesn’t matter yet.

Now if I were doing a brick and mortar place and/or quitting my job an going into business, then yeah – totally different story. And those numbers I don’t know, but if 18 and 12-18 sound security enough for your nerves, then let’s say that’s accurate :) Again it all comes down to your personality and what you’re going to be comfortable with.

I will say, however, that maybe a new industry for you to think about and learn about is the online world. I’m not sure what your current one is, but seems like you’re leaning towards a “real” business as people like to say vs an online one. And/or selling products/etc that cost money to build up an inventory and what not. You’d be amazed at how much wealth is being passed around online by people who live and breathe their biz online. It can be quite sickening (for ex. I know a handful of personal finance blogs like mine (but NOT mine, haha) that have sold in the MILLIONS. Because of biz savviness online).

So if you haven’t thought about it yet, I’d strongly consider it as a starting point. It would also make moving places in the future easier too since you can do it anywhere (though it does require a lot of sitting and behind behind a computer screen which turns some people off).

What do you see at the next election? Have you seen or heard anything that would give us, America, any pause or do you see the govt going full steam ahead etc.

I see and think/care about nothing :) Don’t mean to be flippant, but I genuinely don’t pay attention to it much ‘cuz at the end of the day I feel like it all starts with what I’M doing vs them. Whatever the future brings, whatever the changes good or bad, at the end of the day we have to adapt so I just do that first and worry about the rest when/if it happens.

I should clarify though and say I’m this way because I don’t care strongly one way or the other on hot topics to know I’m not going to make it my mission to enact any change in politics myself. Some people DO want to do that and I admire/encourage it, but I feel like a lot of people talk and bitch and moan and at the end of the day don’t do anything to change it.

So rather than think or worry, I just act now and do what’s best for my business and/or family/life and adapt when needed. And then keep a somewhat ear on general news in case something crazy’s about to happen sooner than later, if that makes sense? Hopefully that all came out right and is not offensive to you :) Just talking straight from the heart.

Advice on entrepreneurship?

Oh man, that’s a really broad question. Honestly I think the best thing you can do is figure out what you really enjoy doing/making/building (and what you’re GOOD at) and then brainstorm ways to make money from it. Then after that, TEST test test! Go out and pitch clients or sell these things and just gain as much real-life experience and knowledge as you can while it won’t make or break you.

Almost everyone I know who successfully runs a business started it on the side while working a 9-5, and then eventually made it their full-time profession once they *knew* it worked. The last thing you want to do is retire and THEN start a business from scratch and have it fail :( Better to make all the mistakes now and start learning to set yourself up for a huge win later in 4+ years when you go for it.

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Anyone want to add to any of this? Am I off in saying this stuff is subjective? Do you follow/reach for certain guidelines based on what others are doing or other models out there?

Help shed some more light on this stuff for our dear reader/future retiree :)

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[Photo by cfourcalvin]


{ 17 comments… read them below or add one }

1 Free Money Minute July 23, 2013 at 6:33 am

I agree completely with ignoring the politics. You may not like what the government is doing, but you have to adapt or you will be done. You might as well focus on your business and not worry about what Washington is doing.

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2 J. Money July 23, 2013 at 11:45 am

Yep. OR go out there and DO SOMETHING about it over bitching and moaning all the time…

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3 jestjack July 23, 2013 at 7:47 am

I agree, money matters especially retirement calculators are very subjective. A good example is…. while vacationing a year or two ago I met a neat guy at the beach fishing. Can’t remember the guy’s name but he was retired, active, fit and was loving life. The guy used to live in Philly and when he retired sold the place there and moved to the Beach. As he explained it to me, ya don’t need a lot of money …”it’s all about perspective”….so he retires…sells the place in Philly…buys a modest trailer at the Beach in a park….banks the difference and lives well on his modest retirement and savings. Soon after moving there he took up fishing and riding his bike…everywhere…so much so that he has no need for a car,,,so he sells it. His wife has a car and won’t give it up. He stays engaged with fishing and doing things in and around the Beach. In the winter they head south and visit friends in Florida. He lives simply…stays active…loves what he does AND most importantly doesn’t let money dictate if he will be happy or not. As my fisherman friend pointed out…”its all about perspective”….a wise man….IMHO.

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4 J. Money July 23, 2013 at 11:48 am

I want to be like your fisherman friend!! Love that!

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5 No Waste July 23, 2013 at 9:48 am

I would even go so far as to say ALL money decisions are subjective, heck, I recently wrote about owning WHOLE LIFE insurance *gasp*.

Also, good businesses thrive under any and all kinds of political “leadership”

My personal opinion is that if a business has a high start-up capital threshold, you may want to reconsider because those barriers to entry will make it very difficult to compete with the already established businesses that have figured out how to squeeze profit out of everything already.

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6 J. Money July 23, 2013 at 11:49 am

Whole life insurance?? Haha… haven’t heard that one in a while ;)

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7 SavvyFinancialLatina July 23, 2013 at 9:57 am

Really cool read this morning! As always.

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8 J. Money July 23, 2013 at 11:50 am

Glad you liked :) Thanks for always stopping by and saying hi!

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9 Martin July 23, 2013 at 10:06 am

Advice is subjective in the sense that one size does NOT fit all. There are folks that would rather make as much money as possible and not worry about savings. A friend of mine works hard so that he can blow money like crazy. From the outside, it sounds silly. For him, it’s his way of life.

As for entrepreneurship — the best thing to do I have found is to make a dollar! Make you first buck. Until you make a dollar, you have a hobby, not a business.

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10 J. Money July 23, 2013 at 11:52 am

Amen, brotha! Quote of the day, right there.

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11 Leona@allmydollarsandcents.com July 23, 2013 at 10:15 am

I completely agree with financial advice is completely subjective for each individual. I’ve also noticed that it’s subjective for different time periods in my life. Where I am now and what I need is very different than it was 10 years ago.

Good post!!

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12 J. Money July 23, 2013 at 12:01 pm

Totally! Very good insight. And 10 years from now it’ll be different too.

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13 Cat Alford (@BudgetBlonde) July 23, 2013 at 10:45 am

Yep! It’s totally subjective! However, after listening to a few videos from some financial planners, they always say that people feel so good when they know THE NUMBER, i.e. what they have to save every month to retire. So, perhaps your readers will want to go talk to someone if they are looking for those hard and fast numbers. Same with their business. It might be a good idea to approach someone with a similar business to see if they have advice and start up cost, bc. my advice is the same as yours —- what business loan? Start a biz online. Cheap!

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14 J. Money July 23, 2013 at 12:03 pm

For sure, having a number could def. be good. I need them all the time to motivate me and get me going on the right track. It’s just *what* that number is that’s always hard to come up with since we’re all different :) Never hurts to talk it over w/ a professional though as you mentioned!

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15 whiskeytrail July 23, 2013 at 6:52 pm

Good info with things to consider.

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16 Christine @ ThePursuitofGreen July 24, 2013 at 3:12 pm

Everything is subjective! I know this especially since I’m in the design industry. Everyone always has their own opinions and thoughts on everything. There is no one right way to achieve your goals. The important thing is striving to get there!

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17 J. Money July 24, 2013 at 8:31 pm

Oh man, the design stuff is a PERFECT example. But always with the *right* answer: The client’s! Haha… I don’t miss that a bit (was a former designer back in the day)

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