What An Old Van Can Teach Young Millennials
A year ago, my brother and his wife purchased a 1985 Volkswagen Westfalia van which they fondly refer to as Walter. Their lives have become consumed by this van and it is not uncommon to stop by their house to find them in the garage, covered in grease, working on their beloved Walter.
Chances are, if you have seen a brown Westy being pushed through one of the many roundabouts in town, it was likely them. Over time, Walter has received significant upgrades and repairs—all at the hands of my brother and his wife without the help of a mechanic, saving them a lot of money—and it went from being a saggy, unreliable old van to a mountain capable, mostly reliable vehicle. These upgrades however have not come without sacrifice.
Zig Ziglar once said “The chief cause of failure and unhappiness is trading what you want most for what you want now.” Some people have questioned my brother as to why so much time, money and elbow grease has been put into an aging, Volkswagen van.
Their response, which has never faltered—even at the height of frustration when Walter left them nearly stranded with a broken axle at the beach—has always been to take a year-long road trip together to discover North and South America and ultimately themselves. A goal that they have jointly held for many years and one that has been a long time in the making.
In order to achieve this long term goal, they have given up many luxuries and forgone expensive weekend activities, living way below their means to smartly plan and save for their year-long adventure. They have taken on a roommate in their small rental house, they have stopped accepting invitations to happy hour, as avid skiers they begrudgingly refrained from getting season passes to the mountain and even stubbornly refuse to turn the heater on, all to work toward a goal that they want most in life, to be financially free to live out their simple Vanlife as they see fit.
Additionally, they have insisted on doing all of the work themselves and have a no-tow/no-mechanic policy. While some of these self-imposed sacrifices are big, such as saving almost $1,700 by not getting season passes, others such as skipping the $4 happy hour after work are small, but it all adds up to the same goal.
I tell you this story about my brother and his wife because it mirrors the same message I tell my peer group when the mundane subject of retirement comes into conversation; make the sacrifices today to achieve financial freedom tomorrow. Setting long term goals and seeing them through is difficult and takes commitment. It is easy to get derailed by things enticing to us right now, but the payoff of sticking with the long term goal will far outweigh any temporary pleasure achieved in the present moment. This means doing ordinary things extraordinarily well such as contributing a portion of every paycheck to your 401(k) or other employer sponsored plan.
Many Millennials do not take advantage of retirement plans available through their employer, stating that they still have many years left until retirement and do not have cause to worry yet. While it is true that they still have many working years ahead of them to save, many do not truly understand how expensive it is to live for 30 to 40 years in retirement without a salary. We may be the first generation that will not have Social Security to fall back on, making it even more imperative to begin making wise spending and saving decisions now.
The sooner you begin saving for retirement the faster your retirement savings will grow due to compound interest. Compound interest is the interest calculated not only on the initial principle, but also the interest previously earned. Simply put, compounding causes a snowball effect and grows at an increasing rate every year. In my opinion, this is the most powerful concept in finance and I urge you to do your due diligence to understand how this can be put to work for you.
As a millennial I find myself continuously reiterating to my peers the importance of the financials lessons I shared above as I have observed firsthand how powerful they are. On a daily basis I see what those concepts have done for the clients I work with; people who have successfully navigated their way to retirement and financial independence.
You do not have to make millions to retire a millionaire. Unfortunately most people never learn this as we are rarely taught basic concepts like the power of compound interest and the Rule of 72.* We are taught how to earn money but not what to do with that money once we get it. At the end of the day, the more devotion you put toward meeting your most-desired goals the more attainable they will become.
When the time comes and my brother and sister-in-law drive off into the sunset on their big adventure, they can go knowing their choices leading up to this were wise and undoubtedly earned. So I leave you with this final thought. When the day arrives and you punch the time clock for the last time, what will your proverbial Walter the Westfalia journey look like? Will the things you wanted most in life be there to greet you as you ride off into the sunset?
*Rule of 72 states that to find the number of years required to double your money at a given interest rate, you divide the compound return into 72. The result is the approximate number of years that it will take for your investment to double.
Brenna Hasty is a Retirement Investment Counselor and Director of Operations at Rosell Wealth Management in Bend. She also manages Rosell Wealth Management’s office located in the Touchmark Retirement Community.
Investment advisory services offered through Rosell Wealth Management, a State Registered Investment Advisor. Securities offered through ValMark Securities, Inc. Member FINRA, SIPC 130 Springside Drive, Ste 300 Akron, Ohio 44333-2431. 800-765-5201. Rosell Wealth Management is a separate entity from ValMark Securities.
(Photo above: Tim, Liz & Lewis Hasty with Walter | Photo by Tim Hasty)
