Are You Blind To Your Financial Fire?

While commenting on a recent post and telling a personal story on a fellow blogger’s site, Rich @ Sport Of Money, it dawned on me to blog about this subject and expand on this story a bit more.

My Mother-In-Law’s Financial Life Is On Fire

My mother-in-law’s (MIL) financial life is on fire… and it’s not the good kind (as in FIRE – Financial Independence Retire Early). You see, she is in her mid 60’s, still working, and has only $35,000 invested in savings.

No, not $35,000 cash plus something else.

No, not $350,000 invested.

No, definitely not $3.5M invested.

And no, not $35,000 and a paid for house.

She has a total life savings of $35,000 at age 66. And she wouldn’t have that had we (my wife and I) not pushed her to start saving something a few of years ago (and to get out of debt). A few years ago she was in credit card debt and still carrying new car notes.

How Did She Get To 66 With Only $35K In Savings?

While she’s had more than her share of hardships (she has been a widow for around 20 years), but that’s not exactly why she has saved so very little. We all experience hardships over a lifetime, and that’s not the reason she doesn’t have much saved. The bottom line is she hasn’t made it a priority.

We’ve discussed on this blog the math to saving even a million dollars, and if you do it over a lifetime, there is no reason not to have a nice nest egg once you get to retirement:

FIRE (Wealth) Is All About Math And Choices

Wealth, Not FIRE

Find Your Why For FI

This post is not about HOW my MIL got here, though. It’s about BEING HERE and NOT SEEING IT. My MIL is blind to her current financial state.

What Do I Mean By “Blind”?

I mean my MIL is at retirement age and simply does not realize she doesn’t have enough money to live out the rest of her life. She is planning on working until 70, but that’s a plan we helped her put into place with the hope of making it to about 100K in savings by then. With her being a widow, she recently began being able to take my deceased father-in-law’s social security, so she’s able to save around $1000/month with just that. She’s going to do this until 70 when her own social security will be maxed out, so she will begin drawing that then whether she is still working or not.

And how do I know she’s “blind” to her current financial fire status? Because she recently asked if she could take some money out of her savings to go on vacation. [Sigh]

And even my sister-in-law said we need to let her “live a little”. Unfortunately she’s been “living a little” for a little too long. Don’t you just love family dynamics?! [sarcasm]

Pushing Someone To Save Is Tiring

You’ve heard the saying “You can lead a horse to water but you can’t make him drink”. Well, you can lead a person to FIRE, but you can’t make them SAVE.

It’s tiring trying to constantly teach someone to save who doesn’t see the need for it. We’ve had sit-down talks on a Sunday afternoon a number of times over the past few years. We’ve tried to explain you (my MIL), you’re living on 5K a month still. Your social security at 70 will be around 2K a month. We hope for you to have 100K saved by then. At a 4% withdrawal rate, that’s about $350/month you can supplement the 2K. Even if we push the withdrawal rate to 6%, that’s only $500/month. So $2500/month vs 5K/month currently. Yes, we can tweak a few things on spending, but it’s still on $2500 month, and housing is $1500 all-in already. Oh, and this doesn’t even consider the later-in-life costs of assisted living at 5K-10K per month. What is her plan to supplement? How will she make it? She doesn’t have an answer and doesn’t want to talk about it.

Yes, my wife and I, with our wealth will be helping out. But here’s the thing… she doesn’t know that! We practice stealth-wealth, and while my MIL knows we’re “doing good”, she has no idea we are worth millions. She doesn’t know her son-in-law is Mr. Hobo Millionaire. Her life is on fire, and she doesn’t seem to get it.

I’ve Been Blind To My Own Financial Fire In The Past

Look, while I don’t believe I’ve ever been as blind as my MIL (at least in these retirement, later in life terms), I… for sure… would be dishonest if I didn’t recognize my own financial blindness in my past. If you’re reading my blog, you know it’s been a long road to get where I’m at now. I’ve been been discussing it on other sites and podcasts, too:

MHM “Finding FI” Interview #16 On FinanciallyAlert.Com

MHM Interviewed on Millionaires Unveiled Podcast #90

For many years I teetered on the edge of financial collapse. Where my blindness was worse than my MIL’s is I had a young son that was dependent on me during these years. He was between the ages of 10 to 20. I was making wreckless movie investments, behind on my taxes, not keeping good business books/records, and not having enough life insurance to care for my son if I died. While I was working very hard to make my life better, it doesn’t negate the fact that my financial life was on fire and I didn’t live in a way that acknowledged it. I even took one or two vacations that I shouldn’t have based on where I was financially.

I know most people who read this blog and other FIRE blogs are pretty good with money, if not great, but I encourage you to share this post with others who may be blind to their current financial status.

Now go do the work.