Four life expectancy calculators

While poking around on the Society of Actuaries website — come on, I’m a nerd! — I found their Longevity Illustrator, a tool for estimating your expected lifespan.

The Longevity Illustrator asks for only a bare minimum of information: your age, your gender, your health, and whether you smoke. Given that info, it generates the statistical probability that you’ll live to any particular age.

Why only these four factors? The website explains:

Longevity depends on many factors, such as lifestyle and genetics. However, these four pieces of information have been shown to produce reasonable approximations of an individual’s longevity.

In other words, there are certainly other factors that affect longevity but these four are enough to get a good approximation. As for me, statistically I have another 37 years left on this earth! I have a 50% chance of living until I’m 86.

My planning horizon

Earlier this year, I wrote that life expectancy is the most important variable in retirement planning. In that article, I shared three other great longevity calculators: the Abaris How Long Will I Live? calculator, the Living to 100 life expectancy calculator, and the John Hancock life expectancy calculator. (These tools estimate I’ll live until 86, 82, and 81, respectively.)

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How one young couple repaid $87,000 of student loan debt in 27 months

It’s not often that I find stories about money bloggers in my local newspaper. But that’s just what happened when I opened the “Neighbors” section of the Lake Oswego Review last week!

Jacob and Marisa Lyda

Jacob (26) and Marissa (23) Lyda graduated from college with a combined $87,000 in student debt. With degrees in business management and business accounting, the newly-married couple decided to become money bosses instead of pursuing the standard consumer lifestyle:

As they prepared for a life together, the Lydas took a hard look at how they wanted to attack their mountain of debt. They started by using some of their wedding money to pay off a couple of smaller loans up front before moving into a tiny one-bedroom apartment in Hillsboro.

From there, they budgeted everything. But more than that, they agreed to take an aggressive approach by putting nearly 70 percent of their income toward their student loans and using the remaining 30 percent for other expenses, such as housing, groceries and transportation.

While their friends bought new cars, had children, and went on vacations, they Lydas sat home and watched Netflix. Mentally, it was tough but they persevered. They turned debt reduction into a game.

As a result, this young couple repaid their $87,000 debt in just 27 months!

Because I’m a nerd, I crunched the numbers for those who are curious. If Jacob and Marisa paid $87,000 toward debt and that represents 70% of their disposable income, then they earned about $125,000 after taxes during the past 27 months. That’s about $4600 each month or $55,000 per year. (Again, after taxes.) That’s not much above the average household income.

Now the Lydas are planning to maintain that 70% saving rate as they prepare to buy a home and save for the future. Because these two are practically neighbors — seriously, they live somewhere nearby — there’s a good chance we’ll meet someday. When we do, I’ll direct them to the shockingly simple math behind early retirement (if they’re not already familiar with it). If they can maintain a 70% saving rate, they could be retired in 8.5 years — before they turn 35. How cool is that?

From the newspaper article about the Lydas’ journey from debt despair to financial freedom, I found Marisa’s blog (The Budgeting Wife) and her YouTube channel. In her most recent video, Marisa tells in her own words how she and Jacob paid off the $87,000 in student loan debt.

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Lessons from a decade of interviewing CEOs

NYT photo collage

For nearly ten years, Adam Bryant wrote the “Corner Office” column for The New York Times. Each week, he interviewed a CEO not about growth plans, “pivoting”, or moving to the cloud, but “how they lead their employees, how they hire, and the life advice they give or wish they had received.”

Last week, Bryant published his final column in a full-page spread in the Times business section: “How to be the big boss.”. After generating five million words of transcripts (an archive twice the size of Get Rich Slowly), he used the space to share some of his favorite lessons from CEOs. There’s some great stuff here that you can apply in your own career, even if you don’t care to ever grab the corner office.

It turns out, for instance, that it’s tough to pigeon-hole CEOs based on achievement. They weren’t all straight-A students or class presidents. But Bryant did notice three recurring themes in the successful people he interviewed:

First, they share a habit of mind that is best described as “applied curiosity.” They tend to question everything. They want to know how things work, and wonder how they can be made to work better. They’re curious about people and their back stories. And rather than wondering if they are on the right career path, they make the most of whatever path they’re on, wringing lessons from all their experiences.

Second, CEOs don’t shirk from challenges. “Discomfort is their comfort zone,” writes Bryant.

Third, on their way to the top, CEOs focused on doing their current job well. Instead of grousing about the position they happened to be in, they built a track record of success. They did their best at whatever they were doing, and this in turn led to promotion after promotion.

And the best career advice Bryan heard during his decade of interviewing CEOs? “Play in traffic.” That is, put yourself out there and get involved. Meet people. Do things. Or, as I’ve written before, participate in the lottery of life. The more experiences you try and the more people you meet, the more likely you are to catch “lucky” breaks.

This is a great piece and well worth your time, regardless what you do for work.

Note that this article is behind a paywall. I subscribe to the Times, so I can see the entire article. (I first read it in the actual newspaper over coffee last Sunday morning.) If you don’t subscribe, I think you’re limited to viewing five articles per month. This should be one of the five.

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The evolution of retirement

If I were to go back to school, I think I’d study retirement. That probably sounds boring to some of you, but I find the subject fascinating. No joke: My bedtime reading lately consists of books like A History of Retirement by Wiliam Graebner.

You see, retirement is a relatively recent concept. It’s only really possible in wealthy nations with long lifespans. In 1880, over 75% of American men older than 64 remained in the workforce. They wanted to work. Work was evidence of vitality and productivity. It gave people purpose. Plus, most folks needed the money.

One hundred years ago, retirement was considered undesirable, something to be avoided. A 24 January 1903 article in the Saturday Review summed up the prevailing attitude: “Men shrink from voluntarily committing themselves to an act which simulates the forced inactivity of death.”

In time, “mandatory retirement” became a huge social problem. Unemployment was high. Older people were clinging to jobs that younger folks wanted — and could do better. The question became: “What shall we do with our old?” In fact, that’s the title of a 1911 film about this pressing issue.

This fourteen-minute silent short from D.W. Griffith, the “father of film”, is melodramatic and heavy-handed by modern standards. (And s-l-o-w.) But it demonstrates just how prominent this debate was in American society.

In time, our perception of retirement changed. With the combination of rising wages, the private pensions, and government assistance programs (such as Social Security), the stigma associated with retirement faded. In fact, retirement came to be viewed as desirable.

Consider these numbers from The Evolution of Retirement by Dora L. Costa:

  • As I mentioned earlier, over 75% of men over 64 remained in the workforce in 1880.
  • By 1900, that number had dropped to about 65%.
  • By 1950, just 47% of men over 64 continued to work.
  • By 1998, fewer than 20% of men over 64 were in the labor force.

In the 1980s, the mandatory retirement policies that had been adopted as official law and/or unofficial policy began to be deemed discriminatory and were abolished. (I’m brushing over the link in that last sentence, but if this subject interests you, you should follow it.)

Today, things are complicated. You’d think that with the abolition of mandatory retirement policies, more older people would choose to continue working. To some extent, they have. But not as many as I would expect. (In 2010, 22% of men over 64 chose to work.) Some of these people work because they have to, of course, because they need the money in order to survive. Some work because they want to.

But I believe that after a century of societal pressure to consider retirement both a social and personal positive, most of us view retirement as a goal we want to achieve, not something we want to avoid. In fact, I believe the idealization of retirement is the driving force behind today’s very popular FI/RE movement. (FI/RE stands for “financial independence/retire early”, in case you’re out of the loop.)

In 1917, nobody wanted to retire. People wanted to work as long as they could. Today, young people — and hey, I’m one of them — are eager to retire as soon as possible!

What does retirement mean to you? Is it a desirable thing? Something to be avoided? How do your attitudes toward retirement differ from those of your parents and, especially, your grandparents?

[See also: The history of the early retirement movement at Early Retirement Dude]

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How to stay rich when you win the lottery

Jason Butler at The Financial Times shares the story of Roger and Lara Griffiths, the couple who won £1.8 million ($2.76 million) in the U.K.’s National Lottery in 2005.

Roger and Lara Griffiths

Instead of using the windfall to buy themselves financial freedom, eight years later the Griffiths found themselves with only £7 in the bank.

Overspending on lavish holidays, expensive cars and designer handbags, bad investments, ill-judged business ventures and Mr Griffiths stopping work to pursue his dream of being a rock star, all contributed to their downfall.

Butler uses the Griffiths’ story to steer his article into familiar territory: People who receive windfalls generally aren’t emotionally or intellectually prepared for the money. Like me, he thinks it’s important for lottery winners — and everyone else — to get clear on their purpose:

A good exercise is to ask yourself how you’d live if you had all the money you could ever need. What changes would you make, what experiences would you have, and what ambitions would you pursue?

Stories of folks who have squandered their sudden fortunes are all too familiar. How many of these people would still have most of their money if they’d taken some time to figure out what actually mattered most in their lives?

How many of us could profit from taking the time to do the same?

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Buying a World War II-era Monopoly set

Like many folks, some of my first real experiences with economics and personal finance came from playing Monopoly, the real-estate trading game. As a young capitalist, the game appealed to me, and I loved playing it with my cousins at holiday family gatherings. (I can’t say I was very good at it, but I still enjoyed playing.)

Austin McConnell, a huge Monopoly fan, recently fulfilled a two-year quest: He tracked down a 1940s war-time era Monopoly set from Great Britain:

He too has nostalgic memories of the game. But that’s not the reason he was after this particular edition.

This set is special because it was created during a period of war-time supply shortages. As a result, some of the pieces are made out of cheaper materials than people are (and were) accustomed to. McConnell actually had high hopes that this might be one of those rare Monopoly sets that was created a secret escape kit for prisoners of war (!!!) — but that wish didn’t come true.

His set did, however, come with hand-drawn modifications that are cool enough in their own right.

Postscript: Last week, Monopoly came out on the Nintendo Switch. While I didn’t purchase the game — I bought Super Mario Odyssey instead — I was sorely tempted.

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How to make millions per year with toy store arbitrage

I’ve told this story before, but it’s been a while. After I decided to turn my financial life around, I started managing my personal finances as if I were managing a business. Okay, lots of you know that.

But what most of you probably don’t know is that I took a ton of inspiration from a videogame. Back in 2004 and 2005, I played far too much World of Warcraft. I wasn’t particularly good at it — except one tiny little aspect. I couldn’t kill the ghosts and the ghouls very well, but I was damn good at taking the loot I found — the weapons, the armor, the treasures — and re-selling it at the (in-game) auction house for big bucks.

Auction house arbitrage

Although I didn’t know it at the time, I was practicing arbitrage: Getting stuff for cheap, then reselling it at (or above) market value. I made bank doing this. As a result, I was able to buy better (in-game) gear, which let me beat up more monsters, which let me make more (in-game) money. Sounds stupid, I know, but it was truly an important part of my real-life financial journey.

Turns out, this practice — arbitrage — can be highly profitable in real life.

Good Morning America has the story of a 28-year-old accountant who started buying toys from big-name retailers, then reselling them on Amazon for tons of money. At first, he was making $1000/month (for 10 hours of work). But the gig became so lucrative that he quit his day job to do it full time.

Now Ryan Grant says he’s grossing $4 million per year doing this on a larger scale. (And he has a staff of 11 employees!)

Although Good Morning America tries its best to hide Grant’s website, I’ve found it for you: Online Selling Experiment.

The Good Morning America reporter who covered this story tried to experiment with arbitrage herself. She only made $35 for a few hours of her time. The subject of the story (Ryan Grant), however, has found a way to make this work on a massive scale.

As a guy from the box industry, though, there’s one huge red flag in this story. The dude is using U-Haul boxees to ship his goods? Uh, no. That is not a cost-effective way to do this. Either he’s spending way too much on packaging, or something’s fishy here. I’m serious. Every time the video shows those U-Haul boxes, I die inside.

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Anthony Bourdain’s money diary

Anthony Bourdain

I’m a huge fan of Anthony Bourdain. The dude loves life and lives hard — and shares it all (good and bad) candidly. Often in the evening, as Kim and I eat dinner, we’ll watch an episode of Parts Unknown, which is ostensibly about travel and food but actually about the human condition. It’s great stuff.

As part of their excellent Money Diaries series (“interesting people talking candidly about money”), robo-advisor Wealthsimple interviewed Bourdain about his relationship with money.

“My parents were not good with money,” Bourdain says. “They bought things they couldn’t afford.” When they did have money, they spent it instead of saving. As a result, his money blueprint was faulty from the start.

Bourdain shirked work. What money he did earn, he spent on drugs and other forms of entertainment. “I didn’t put anything aside, ever,” Bourdain says. “Money came in, money went out. I was always a paycheck behind, at least.”

The sad fact is, until 44 years of age, I never had any kind of savings account. I’d always been under the gun. I’d always owed money. I’d always been selfish and completely irresponsible.

Nowadays, things are different. Over the past twenty years, Bourdain has turned things around: “I am fanatical about not owing anybody any money. I hate it. I don’t want to carry a balance, ever. I have a mortgage, but I despise the idea.”

Like most of Bourdain’s work, the entire interview is golden. (And while you’re at Wealthsimple, check out other installments in their Money Diaries series, including interviews with Elizabeth Gilbert and Kevin Bacon.)

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Jean Chatzky’s retirement savings factor

Earlier today, I shared J. Money’s lifetime wealth ratio, which is calculated by dividing your current net worth by the your lifetime income. If your net worth is $100,000 and you’ve earned $1,000,000 during your career, then your lifetime wealth ratio is 0.10 (or 10%).

I pointed out that this idea is similar to a benchmark suggested in The Millionaire Next Door. The authors of that book say that your expected net worth should be roughly 10% of your age multiplied by your gross (pre-tax) income. If you’re 35 years old and earning $50,000 per year, your expected net worth would be $175,000.

For me, exercises like this are fun. They’re a way to gauge progress in a world where we don’t really talk to each other about our financial situations. Apparently, not everyone agrees.

Last week, financial journalist Jean Chatzky tweeted a guideline of her own:

Jean Chatzky tweet

The response on Twitter was hysterical (as in “overwrought”, not as in “funny”):

Response to Jean Chatzky tweet

This guideline isn’t Chatzky’s invention. It actually comes from the retirement arm of Fidelity Investments. Fidelity in turn based these targets on stats from a variety of U.S. government agencies. According to Fidelity:

Our savings factor rule of thumb is based on some key assumptions: You start saving a total of 15% of your income every year starting at age 25, invest more than 50% of your savings in stocks on average over your lifetime, retire at age 67, and plan to maintain your preretirement lifestyle.

The result is what Fidelity calls a “retirement savings factor”, and you can calculate yours by using their retirement savings factor calculator. (My retirement savings factor is 11. That is, in order to retire at age 62 — the target I entered — Fidelity thinks I need to have 11x my current income saved. But this exercise doesn’t work for my situation.)

Like the folks on Twitter, I don’t like the Chatzky/Fidelity guideline — but for a different reason. Long-time readers know that I hate hate hate retirement advice that bases financial needs on income rather than expenses.

Instead, I think you should base your planning around your current expenses. One guideline I promote is this: Aim to accumulate wealth equal to 25x your annual expenses before leaving the workforce. So, if your household spends $30,000 per year, then you can probably retire once your net worth hits $750,000. (This is a rough guideline. Individual circumstances will vary.)

Whenever you see benchmarks and guidelines and rules-of-thumb like these, don’t take them as absolutes. They’re targets. Each of us is different, right? We each have different circumstances. If you’re not where Chatzky and Fidelity suggest you should be, that’s okay. Don’t feel bad. But use this as motivation to get closer next year — and the year after.

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Are You Taking GIFs Seriously as a Marketing Strategy?

GIFs are the new emoji. GIFs are also the video form of the meme. You can mock, cajole, amuse, or comfort through a GIF.

GIFs typically include some sort of cultural reference. And the medium thrives on instant pop culture recognition.

But how in the world is a GIF even useful in marketing?

When I first heard of the concept, I was like, “Riiiiiight.” But as I did my research, I realized that GIFs are actually a brilliant marketing strategy.

And if you utilize them correctly, you’ll see a massive impact on your conversion rates and income.

1. What Is In a GIF?

A GIF is a Graphical Interface Format. And it’s old.

How old? Like 1987 old.

And the question ever since has been “How do you pronounce it?”

Fortunately, the FAQ section of the original program that used GIFs tells us it’s pronounced “JIF.” But the debate still rages on despite.

The program that originally used the .gif format was called CompuShow made by CompuServe. And it was meant to help users create short graphical videos.

And while GIFs have been around for a long time, it wasn’t until recently that they became easily shareable. Companies like Giphy have both created a way to make GIFs and index them.

You can search their entire database of moving memes and then quickly share them on any digital media platform. Companies like Facebook and Twitter offer ways to connect Giphy to a user’s account for even quicker access.

Thus it is said that GIFs (a 1987 invention) broke the internet in 2017. Now that’s irony if I’ve ever seen it.

2. How Then Do You Market With GIFs?

GIFs aren’t just an amusing toy. They are a series of images. And when images are involved, they evoke emotion.

Using a GIF as a marketing tool is akin to using a comic as satire. A comic can be both funny and meaningful. So can a GIF.

And GIFs are much easier to consume than a full-length video. And much shorter than a page of content.

Your Website Could Benefit

Flash is the bane of fast websites today. Almost nobody uses flash animation anymore because it slows a website down to snail speed.

But GIFs are small files. They load quickly. And they’re visually interesting.

And if you’re afraid that the common looping GIF will be distracting, use a Cinemagraphic GIF instead. These are high-quality photographic GIFs that play only once or at intervals.

They won’t distract from the rest of your content, and they’ll add movement to an otherwise static website.

GIFs Tell a Story

Alex Chung, the CEO of Giphy once joked that since a picture is worth a thousand words, the sixty frames in a GIF are worth 60,000 words. The same number as a short novel.

While this isn’t exactly a true statement, the GIF really can tell a story.

And it will be more compelling than words.

GIFs don’t have to be nearly as short as you think. While the average GIF includes 60 frames, they can be short videos (sans sound).

Do you have a product that needs an explanation? Why not create a long GIF?

You can enumerate a short tutorial through GIFs as well. Each step including images and directions.

And if you think about it, most TV commercials are essentially GIFs with sound. You hardly see anything in a commercial than images intended to evoke emotions.

And a GIF could be as effective, if not more so, as a TV commercial.

Promote Products or Services With GIFs

Like I said, a GIF is as good as a commercial. And you can focus on products even longer in a GIF than in a commercial.

Why? Because a GIF needs no soundtrack or distracting dialogue. It’s all images all the time.

Thus, your product or service sits in the limelight the entire time. And it’s easier and cheaper to produce than a video.

You only need a decent camera and a computer. That’s it. No sound equipment needed. No expensive video production software.

Use ’em with the trends Midas Marketing mentions in this post and you’re sure to score a win.

GIFs Are Cross Platform Play

Your GIFs don’t have to be confined to your website. They can play anywhere you want them to.

Platforms like Giphy have made it insanely easy to share and utilize GIFs. And almost every social platform now connects directly to Giphy.

So, once you set up your GIF, it’s extremely easy to post it to almost any social media platform.

And outside of Giphy, Instagram includes a “Boomerang” feature that allows a similar loop feature to GIFs. While these “Instagram GIFs” aren’t as customizable, they are useful for a quick looping picture.

Why would you want to use GIFs over traditional media on social media? Simple: they’re catchy.

You want anything you post on social media to be shareable. And the moving picture is the most shareable thing on the net.

It’s almost guaranteed that a GIF will be shared over a static image. And you get to say more in less time than a video.

Audience Involvement is the Ultimate Perk

Don’t make your GIFs. Have your audience make GIFs for you.

How? Simply start a contest.

Competition is the best way to get customers involved in your brand. And you’ll get some incredible GIFs to boot.

But be sure to create a list of rules or you’ll end up with some pretty nasty memes. If you’re using a Facebook page, be sure to moderate the posting of GIFs heavily.

Remember, your brand reputation is on the line and if you allow anything onto your social media platforms counter to your brand message, you’ll be sorry.

Conclusion: Before You Create a GIF

Always do your research. Are other people in your niche using GIFs? What seems to work for them and what doesn’t?

Also, make sure you pass a GIF before a second pair of eyes before you post on a website or social media platform. You need to know that your own bias isn’t getting in the way of seeing a problem.

But as long as your GIF speaks directly to your audience, you’ll see a massive return on your investment.

If you’ve enjoyed this marketing article, check out our “What Internet Marketers Can Learn From X” series.

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