Wall Street WARZONE

The “Incredible” Family Retirement Formula: Proof You Don’t Need a Million Bucks to Live Like a Millionaire! Grandparents & Movie Heroes Taught Me How!

by Paul B Farrell, JD, PhD
| | 5/8/2010

You’ll never hear this from Wall Street. They don’t want you to think for yourself. Certainly not this way, ignoring their relentless quest to accumulate more assets. But here I am revealing our super-secret “Incredible Millionaires Family Retirement Formula.” It builds on something Ralph Warner said in his bestseller, Get a Life, You Don’t Need a Million to Retire Well: “Instead of focusing almost exclusively on our finances, we should be thinking about the things that truly make a difference in our later years, our health, spiritual life, relationships with family and friends, and having a plate full of interesting things to do.”

I didn’t learn all this during my years with Morgan Stanley, nor in law school, nor working on my doctorate in psychology. My grandparents taught me, by example. It’s the kind of wisdom you don’t appreciate until you grow up. They raised me in a small town. Both retired. They learned a lot through the Great Depression and WWII. We lived off Grampa’s garden in summer, Gramma’s canning in cold winter. Their world was right out of the movie, “It’s a Wonderful Life.” We always had more than enough. Being rich or poor never crossed my mind. I ushered at the movies, set pins at the bowling alley, clerked at the newsstand, was in the boy scouts, played football, wrestled, ran track, went to church, then off to the Marines, Hollywood and Wall Street. Then left to do what I love, write. Bottom line: You don’t need a million bucks to “live like a millionaire!”

Movies always get me thinking. They help us to see answers to today’s challenges in yesterday’s lessons, so we can make sense out of tomorrow. Remember that delightfully entertaining Pixar animated movie, “The Incredibles!” Wow, did it ever get me thinking—about what being “rich” really meant to my grandparents, and probably to most Americans. In the dark theater, my brain made some interesting connections, and suddenly, out popped the “Incredible Millionaires Retirement Formula!”

But like I said, you won’t hear this from most Wall Street’s brokers and hustlers.

Why? Because they’re not superheroes, they’re super-myopic. They make their living selling and managing assets, by siphoning your profits as fees, right off the top, even when they under-perform. You get the leftovers. Their formula is very narrow: They say you need a million bucks in the bank to retire like a millionaire. That’s a million invested at five percent generates $50,000 annually. Wrong!! Shift your focus: What you really need are monthly cash flows, not a million bucks in assets sitting idly in a Wall Street account paying unnecessary fees.

Moreover, this simple formula proves retirement is more a matter of “attitude than assets.” My grandparents left me with the belief that you can live rich and retire like millionaire, without ever having a million bucks worth of assets, which he didn’t, far from it. Most Americans live like this. Happiness and success are more in your head, your heart, your soul. And whatever that feeling is, I got a big-time reminder from “The Incredibles” movie! An incredible secret—”attitude not assets!”

The Incredibles are a “typical” America family of four: Mr. Incredible is a retired superhero working for Corporate America in a typical boring job, in insurance. His wife, Elasti-Girl, another retired superhero, is a typical loving (not desperate!) housewife. They have two “typical” teenagers. Sweet, shy Violet feels invisible, and in the movie, she often is! And hyper-energetic Dash can run the 100-yards in the blink of an eye.

This family’s loaded with super-powers. But their true identities have been suppressed. They’re trying hard to be a typical American family, what society expects. Not super, not even above average. Just normal folks fitting in a society that encourages people to be mediocre rather than exceptional. Then suddenly—the challenge! Destiny calls! They’re forced to reclaim their powers, become superheroes once again and save the world! Okay, so it’s a movie, but in a way, at least once in life, don’t we all get a call to be all that we can be—to fulfill our destiny!

Yes, you can have incredible superpowers

So yes, I’m doctoring the script for you. Listen closely: I’ll show you how you can capture the spirit of these four superheroes, get rich, retire and live like a millionaire. And do it without all the assets the Wall Street brainwashing machine wants you to think you need. Wall Street is obsessed about its asset-based formula. Forget it! The “Incredible Millionaires Retirement Formula” focuses on cash flow, not assets. For example, let’s say you need $5,000 a month. The American Association of Retired Persons (AARP) says most retirees live on less and yet are happy with their lives. So here’s your new script. Here’s how you can retire a millionaire and be happy in spirit and in fact.

Mr. Incredible’s savings power
If you max out your IRA and your 401k every month starting at age thirty, with as little as $150 a month, compounding does the rest. Guaranteed millionaire. Okay, so yours is low? Stop beating yourself. Start where you are now. Save what you can. So you never get a million bucks? No big deal!

Violet’s “invisible assets” power
Fixed pensions and Social Security benefits are better than hard assets in a volatile market. Step into Violet’s secret world. See your “invisible assets.” Suppose you and your spouse are getting a total of $2,500 monthly from Social Security. If you also get another $1,500 from pensions, you have the $4,000 you want. And please note—you get to this point with no savings and no other assets! Just the small pension and Social Security checks.

Dash’s high-energy work power
Have fun dashing around, working part-time. Do what you always wanted, something you love. Seventy percent of retirees work. Most do it to keep busy, not because they have to. Everything from eBay auctions to Wal-Mart greeters, artists to entrepreneurs. In today’s wonderful world of opportunities Dash is a cheerleader nudging you can make fast money every month, then relax!

Elasti-Mom’s home ownership power
Home is where most families build their wealth quietly, even in the wake of the recent recession. Lotsa opportunities to streeeetch your dollars (and your thinking) says Elasti-Mom. Just don’t waste this valuable asset on home equity loans. Keep your equity building. Later, you can pay down the mortgage, live debt-free. Or cash out and move to a smaller home, in a lower-cost area when the nest empties.

Big secret—add it all up and you’ll be living like a millionaire!

Now here’s the big secret in the “Incredible Millionaires Retirement Formula.” Add up all four components—Mr. Incredibles savings power, plus Violet’s “invisible assets,” plus Dash’s new career in retirement income, plus Elasti-Mom’s home ownership power—everything from savings, pensions, Social Security, lower home costs, and a new career, and I’ll bet you’ll have the $50,000 cashflow you need annually in retirement.

Now, look closely: That cashflow is the same as having a million invested at five percent. That’s the secret! So stop focusing on assets. That’s why all of Wall Street’s methods are misleading! They want to get their hands on your assets. Fuggetaboutit! Instead, focus on monthly cashflow from all sources, not just assets. Add them all up, and I’ll bet you’ll discover that you can live like a millionaire, without having a million bucks cash sitting in some Wall Streeter‘s bank, paying extra management fees every year, for nothing. … Amazing isn’t it, the kind of lessons you can pick up from super-heroes, animated movies … and some wonderful grandparents.

FirstPubDate: Jan’05

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