Younger and faster

The most conventional retirement advice is to start early and save slowly. Articles like this one show you how you can become a millionaire with as little as $100 a month if you start when you're 25 and save for 40 years. Great, except who wants to wait 40 years?

Not to be morbid, but the so called "Golden Years" are the time we're most likely to experience failing physical health, death of a spouse and friends in our age group, and eventually....well, you know the rest. Happy Monday.

I'm of the view that as a society we need to start saving younger. But it's tough. Look at the cost of getting an education. If higher education were free - like it is in the Netherlands, for example - we wouldn't have students graduating $20,000 in the hole. If you were working part-time during school, and tuition was free, you could even save money while completing your studies.

Setting the retirement bar at 65 is such a dismally low target. Why do you think it's been set there? I hate to sound cynical, but it probably has something to do with declining productivity after a certain age. Your value as a worker bee starts to decrease. My point is, retiring at 65 isn’t designed to be in our best interests. It's in the best interests of corporations and shareholders.

If you could save enough money for retirement in 10 or even five years, would you? Would it be worth the discomfort? Or does the saying, "slow and steady wins the race" apply?

The attitude I commonly encounter among people my age is "I want to enjoy nice things while I'm young." But are you really enjoying them when you're standing on the edge of the precipice of debt? Wouldn't it be better to enjoy these things a little later in life - when you're grounded and have your head on straight, but you still have all your teeth?

$1,000 goal: I made it - now what?

Today is pay day and I have good news to report: Not only did I manage to save $1,000 last month, but I actually ended up with $95.45 left over – after all bills and expenses!

Was it stressful? A bit. I'm not used to watching my money so closely. Can I repeat next month? Sure.

The bigger question is whether I can keep it up long-term.

The budget I’ve outlined doesn’t leave much for extras. I realize I’ve neglected both dry-cleaning and clothing purchases. And you can only go for so long without either of those.

Why is my savings plan so aggressive? Simple: I don’t want to work until I’m 65.

My goal is to retire by my mid-40s. Unfortunately, that means my plan isn’t quite aggressive enough. I believe it’s possible to retire or at least semi-retire on as little as $500,000 (at a rate of 6% it would generate about $30,000 annually).

Saving $12,000 a year for the next 13 years at a return of 6% would net me around $240,000 by the time I’m 45. By that time, if I keep working full-time, my pension would be worth about $150,000.

What I would really like to do is ramp up my savings to $2,000 a month, which would put me over $500,000 (taking into account the current value of my pension) by the time I’m 45. I don’t want to plan much around future pension income, as my overall goal is to gradually move away from 9-5 work in order to pursue other ventures.

Do you think it’s achievable? To do this immediately I’d have to get a higher-paying job, and then work on building my freelance income in my spare time.

Do you have a monthly savings goal? How does it fit into your long-term plan?

Dresses make me spendy

The dress in question (on someone who is not me.)

I'll come right out with it: I spent $448 dollars on a dress last night.

I've been hunting for an outfit for an orchestra performance this Sunday. Dress code for women is a long black dress or skirt, or black dress pants/top. I had my heart set on a dress (maybe a wee bit of princess syndrome, but I love any excuse to wear one). The most economical option would have definitely been black pants and a jacket of some sort - something I could mix and match with other pieces I own and potentially wear to work. Yawn.

Instead I started hunting for a cheap floor-length dress. I saw some horrible stuff: A $118 piece of stretchy t-shirt fabric with no lining. Polyester prom dresses. $700 gowns covered in cruddy fake sparkles. I knew precisely what I wanted: elegant and non-fussy - almost austere - substantial fabric, ease of movement while playing. And sleeves.

Good luck with that.

Finally I just gave it up, hung my head and went into Holt Renfrew, where a Shelli Segal dress called to me from the rack. I had that "aha" moment - ladies you'll know what I mean - before I'd even looked in the mirror. With tax and alterations to shorten the hem, it ended up being twice what I wanted to spend. Note: This won't affect my $1,000 monthly savings goal. I will be receiving some overtime pay, plus a pretty substantial tax refund.

The big question: Will it be worth it?

Youngandthrifty recently wrote about the logic of purchasing quality everyday clothing, like jeans. I'm definitely on board with that. This is far from an everyday item. However, I will be wearing it for all upcoming concerts in the foreseeable future.  Because it’s so classic, I could actually wear it for years to come. I also plan to start playing weddings and will need something for those occasions, too.

In a way, it does seem essential to have well-tailored, quality clothing for performances. I cringe at the thought of going up on stage in front of hundreds of people wearing something that looks cheap. There’s also something to be said for having a black-tie worthy gown in your closet. You know, for all those last-minute invites I get from handsome young astronauts. Hey, a girl can dream....

So, what do you think? Am I out of my mind?

In an upcoming post, I'll give some tips for how to spot a quality garment, regardless of the price tag or brand name label.

Additional income: my strategy

A while back, Krystal of Give Me Back My Five Bucks wrote for Moneyville about how to earn extra money in your spare time. It got me thinking about ways I can supplement my own income. Other than freelance writing (which I've done in past and plan to start again) I was coming up short on inspiration. So, I sat down and wrote a list of things I really like to do, noting any money-making potential for each activity, as well as potential downsides.

My list looked like this:

Gluten-free baking: Since I'm allergic to wheat, I've developed a talent for baking without it. There's definitely a growing market for this. However, this would likely result in a low dollar rate per hour due to the effort required. Cakes might be more profitable, but I am actually terrible at decorating them (though I know someone who is excellent at it). I made a note to contact this friend about potentially joining forces.                      

Playing violin: Teach violin, start a quartet/ensemble to play weddings and other gigs. I could make $30-40 an hour teaching, given my experience, and I really love it, too – especially working with beginner students. I’ve done it in past so I know what’s involved. With a quartet, you can make $50 or more for a one-hour gig, although there’s a fair deal of preparation involved. But, once you have your “sets” down, you can slash that prep time considerably. I sent a note to a fellow orchestra member to see if we can get something going.

Fooling around with words: I actually quite enjoy crafting bad writing into readable prose. I might be able to make $20 an hour editing, to start, though it would take some to ramp up to decent contracts. Corporate jobs would pay more, but would likely be *really* boring. I’m more interested in narrative writing (fiction / non-fiction) and wouldn't necessarily mind working for a lower rate to do this. I am going to look into this further.

Working out: I could actually do a great job of personal training, judging by some of the trainers I've seen at the gym (I see some really bad stuff, geez!). I’d need certification though, which would take time and cost some money. I’m not sure I’d enjoy it, either. There’s something about other people’s sweat…

From this list, I determined that I could immediately start teaching violin lessons. I put some ads on Craigslist and Kijiji. Good news: I just got my first student! She will be starting March 2^nd. I'm charging $20 for a half-hour lesson, once a week, which adds up to an extra $80 of income at the end of the month. If I can work my way up to five students, that amount will grow to $400 a month!

If you’re stuck for ideas, try the format above. What do you really like to do, and how much could you make doing it, just starting small? Could it evolve into a full-time business? Might you like it even better than your current job?

I'm learning that with many things in life, if you start small, you can achieve big results over time. Freelance work is a great example of this principle. Finally, really do try to choose something you love. You'll definitely be more motivated to succeed!

I was wrongish

So it appears I ticked off more than one person earlier today with my post about the cost of being female. Including one close friend. Yikes!

First off, let me say this: My argument was definitely flawed. Tragically so. Shout out to Dan @ How to be Aweso.me for pointing out some of the additional expenses men have, and helping me figure out what I was really trying to say.

It turns out what I was getting at is more social commentary, and less about finances, so I'll keep it brief: I feel that a man who really likes a woman will offer to pick up the cheque - especially when they are in the early stages of a relationship. The kind of man I tend to like, anyway.

One of the things I love about the Internet (and I do have a love-hate relationship with it) is that you can get an honest appraisal out of people (rare in "real life"). They will tell you what they really think – why not? It's fodder not only for debate, which is fun, but also for personal reflection: How did I arrive at a certain conclusion? What does that say about me as a person? Are my values in the right place? (Yes, I really think about all of this – I'm just nerdy like that).

For instance, as I ate my dinner, I wondered the following:

-Am I an entitled brat? Or some kind of snob?
-Am I anti-feminist?
-Are my expectations out of line with reality?

No, no, no and … no – I hope. It would have behooved me to consider that men incur additional expenses as a result of their gender. However, my original argument (the part about chivalry) still stands – for me. The problem is, it's not really an argument so much as a feeling. One thing I've learned is that you have to trust your instincts - at least really clearly consider them. Thinking that a man should pay for a date isn't entitlement or snobbery; it's simply a personal preference. It's kind of along the same lines as when someone I've just met shortens my name – calls me “Mel” when I've introduced myself as Melissa. Could it be that such fickle likes and dislikes keep you away from certain “flavours” of people that are no good for you? (By the way, that one's not a deal-breaker, unless a guy leans and coolly smokes a cigarette, while typing on his blackberry, *while* slangifying my name. And is wearing shoes that curl up at the ends like elves'.) Hey, I know what I don't like. But I'm only looking for one person.

And with that, I now take you back to our regularly-scheduled programming. Tomorrow I blog all about additional income: what I'm doing and how to make it work for you.