Personal financial disasters - how was savings/retirement impacted long term?

[TheShadow]

Well he can't save 20% until he gets those CC's paid off.

[Submariner]

Originally Posted by Serious Conversation

... It looks like a personal financial disaster is damn near inevitable by the end of the year!

Did you ever have a personal financial disaster? If you were 30-31 and fell off the rails, how would you begin to recover? How would you allocate retirement savings these days coming from a zero basis with a thirty year or longer horizon?

How would you begin to rebuild for the immediate future and for older age?

You never know what is lurking around the bend.

On a day-to-day basis you do your best.

I worked a career field that offered a pension. We both took courses on budgeting, taxes and tax-planning, and we were both budgeting counselors and tax preparers, through the 80s and 90s. We focused a lot of effort on living frugal, investing hard and maintaining a full 100% tax-shelter over all of our income and investments. By maintaining ourselves tax-free we had more money to invest. Our portfolio was completely tax-free. As a result our ROI was spectacular.

When I retired [at age 42] we took out as much capital as we could and we bought our retirement home with cash. We expected our portfolio to re-build. My pension is enough to support us and we expected that in 10 years our portfolio would be recharged enough to allow us to begin draining it again. But the Recession hit is hard. <insert long boring story> we lost it and had to go through bankruptcy to disentangle from a lawsuit. That was a disaster for us. The last 10 years done okay on my pension, it has forced us to stay in a frugal lifestyle.

Then out of the blue and completely un-expected an in-law has passed away. The estate is large. Suddenly we are meeting with lawyers and accountants, talking about forming an LLC to buy a half-dozen apartment buildings and hiring our children to manage these assets.

You just do not know what is ahead. On a day-to-day basis you do your best.

[animalcrazy]

Dear one, what have you learned from your mistakes and do you plan on not repeating them?


I have always believed in having back up money for my back up money and that means living below your means. Want what you need, don't need what you want.

Rebuild but do so with that mentality. Always ALWAYS have a years worth of your salary within easy reach at all times. YES you can do it.

Change the way you think about money and think of it as a tool instead of a toy. You'll be fine. You have plenty of time to recover. Just learn from your mistakes.

[fluffythewondercat]

For those who are unfamiliar with the OP's history in the Personal Finance forum:

http://www.city-data.com/forum/44777303-post266.html

His biggest issue, which he refuses to acknowledge, is that he makes emotional financial decisions instead of rational ones.

And there's nothing that requires rationality quite so much as retirement planning. If you've been dodging the truth all your life, retirement is where the rubber really meets the road. If you're on Social Security, you can't run out and spend $50 going to a ball game because it makes you feel better. Or use credit cards as your emergency fund -- and keep having emergencies.

[Petunia 100]

There is no reason your credit score has to tank. Just pay minimums on everything, even if you have to borrow cash from one creditor to use to make payments to the others. (It's not a long-term solution, but a short-term strategy to avoid default.)

[N.Cal]

seven offices and five different states

This seems to be your biggest issue.

[mlb]

I don't have much advice other than my heart goes out to you.

I have been laid off twice before and landed OK in jobs that carried me through.

The only "disaster" was my spouse losing his job during the recession that effectively ended his sales career because the only thing that has come back are low salaries. And no one wants to hire a 50 something guy when they can hire 20 somethings for cheap.

Luckily for us - I remained employed all throughout this and we learned to live on much less.

You will survive. You're still young. Live BELOW your means because it can happen again - and prepare yourself to always live below your means and you will do well.