What’s The Point?

According to the CDE, the average U.S. life expectancy is 76.3 (73.5 for men and 79.3 for women), which is significantly lower than the average life expectancy of 82.2 in comparable countries.

​​What’s the point of all this?

​​So we work for 45 years to retire at age 65 or 63, as the case may be, to only live for 11 more years for men and 16 more years for women? And those years are spent during a time of diminished health and energy.

​​It’s interesting that the life expectancies of our peer countries are nearly six years longer. That tells me that in the U.S., we work our fingers to the bone only to watch our bodies break down in retirement. Maybe it has something to do with lifestyle and the amount of time Americans take off compared to the rest of the world.

​​In the European Union, every worker is guaranteed four weeks of paid vacation. No matter how long they’ve been at a company, no matter how low-paying the job is, According to a 2019 study, people in Japan get 10 paid vacation days and 15 paid holidays; in Australia, it’s 20 paid vacation days and 8 paid holidays; and in Spain, it’s 25 paid vacation days and 14 paid holidays.

​​And it’s not just the rich countries. Mexico, Afghanistan, Thailand, and Tanzania all guarantee paid vacation from work.

​​In the U.S., there are zero guaranteed paid vacation days and zero paid holidays.

​​Shouldn’t you be living your best life now?

​​Whatever we’re doing in the U.S., it’s not working. The traditional approach to investing for retirement is failing Americans, with 56% of Americans saying they’re not on track to comfortably retire. Instead of planning for a financially uncertain future retirement at an age we can no longer fully enjoy life, why not invest to live today?

​​The idea of investing to live today rather than solely for retirement is gaining traction but will require a paradigm shift. It will require a shift in investing philosophy and approach.

​​For some insight into how to invest to live for today without sacrificing the future, look at the investing habits of Ivy League endowments. These endowments are tasked not only with investing to meet the current needs of students, faculty, and the university as a whole but also with preserving assets for future generations.

How do they do this? Through cash-flowing, tangible assets.

​​Ivy League endowments like the Yale Endowment allocate a majority of their portfolios to cash-flowing tangible assets like commercial real estate and private businesses (private equity). The cash flow from these assets pays for current needs, while the underlying tangible assets appreciate to preserve wealth for future generations.

​​To experience life now to the fullest by taking more vacations and spending more family time, consider changing your investing approach. Instead of relying solely on appreciation from your 401(k)s and IRAs for retirement in the future, take a cue from university endowments and the ultra-wealthy who invest to enjoy life now without sacrificing the future. Invest in alternatives by investing in tangible assets that have cash flow.

​​Putting your money to work is the key to living the life you want to live now.

​​Cash flow from passive investments allows you to build and grow wealth while you’re asleep. Cash flow that is reinvested into additional passive income investments compounds wealth and shortens the time to achieve financial independence. You can keep working if you choose, but passive income streams will be essential for you to work as little as you want. When your passive income is enough to meet your current needs, do you really need to keep working or keep working as much?

​​Besides the cash flow, the appreciation and tax benefits of alternative assets like commercial real estate and private investments add another layer of returns unmatched by traditional assets like stocks and mutual funds.

​​From an early age, most Americans are indoctrinated with how life unfolds. You go to school, you get a job, and you work your fingers to the bone for X amount of years while putting some money away in a 401(k) for retirement. Then you retire, spend your twilight years in a retirement home, and then pass on to the great beyond.

​​The reality is that most retirees are not enjoying their retirement. They’re stressed about money, and their bodies are too frail to truly do the things they really want to do.

​​To avoid the fate of most American retirees, consider a different path. Change your investment approach and your financial and personal path.