Bankrate, Inc. (www.bankrate.com) blogger Jennie Phipps recently told us about a pretty neat guy named Leonard McCracken. Mr. McCracken is 107 years old, but it’s not merely his long life, impressive though it is, that makes him a worthwhile subject for an article. Turns out that not only is Leonard McCracken well over 100, he’s been retired since he turned 65; that was back in 1969. Again, not bad at all, but that’s not the really outstanding part. The outstanding part is that Leonard McCracken, 107 years old, retired for the last 41 years, and a man who never made more than $10,000 per year when he was a working man, has subsisted during all of his retirement years on a combination of savings, Social Security, and an annuity he purchased many, many moons ago.
Once again, we have another story about someone who was raised in a different time, with different values, with different notions about spending and saving from what more recent generations have harbored, who is able to survive just fine as a retired person for several decades after he hung up his work clothes once and for all.
The overriding theme in these tales is always the same: live within your means…but not merely within your means – you have to be willing to live so far beneath them that it often hurts. McCracken cites a lifelong devotion to thrift stores and second-hand everything as a big part of why he has been able to pull off his feat, but we also see that investing is a big part of the formula for success, as well. When you live well below your means, you will have positive cash flow, and when you have positive cash flow, the smart thing to do is to put it into asset classes that have a demonstrated record of growing over the long term.
McCracken has also touted avoidance of the stock market as a big part of his success (his investment of choice has principally been real estate), and while I don’t wholly agree with everything he suggests, including that, I don’t allow the differences to shift my focus away from the larger, very-valuable message: Work hard, save like crazy, and live in a way that allows you to save a large portion of what you earn to have available later when you can no longer work. We’ve heard the message before, but given that some consumers are starting to re-adopt some of their pre-economic collapse spending habits, it’s probably a message we cannot hear too often.
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Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc; www.investorspassport.com) and the unarmed combat training DVD Thunderstrikes – How to Develop One Shot, One Kill Striking Power (Paladin Press; www.mikereevesonline.com).