Financial independence 'a hell of a lot easier if you target a basic lifestyle'
You know, money was a lot simpler when I was in my 40s, mainly because I had little choice.
I turned 40 in 1995 and a lot of exciting things were happening in the Clitheroe family, most of them unrelated to money.
Our third child, Ellie, had arrived in 1994, completing our family. As a result, we moved to a bigger house in Artarmon on Sydney's lower north shore and we were mightily relieved that the mortgage interest rate was on the way down from the 18.75% peak in early 1990 to around 10.5%.
Mind you, we still had a hefty mortgage and the primary challenge was to meet our monthly repayment.
Along with my four partners at ipac, I was working pretty solid hours trying to build our financial advice business. Our total assets were our stake in ipac, which at the time was not worth much, some equity in our home and a second-hand blue Ford Falcon.
This car had become a necessity in 1990 as we had to sell a small BMW to fund our mortgage as it peaked and we bought the Falcon as our only car. Two cars were just not an option.
1995 was a big year also because it was the first full year of the Money TV show, which was launched in 1994 and was amazingly popular.
Mind you, it does help a fair bit when there are no internet, no mobile phones, no Foxtel let alone Netflix and so on.
The TV show led to Money magazine, which was launched in 1999.
It was a really happy time in our lives; we loved our young family and the lack of money after paying the mortgage really did not seem like a big deal.
Holidays were not really on the agenda but we enjoyed home time, barbecues with friends at our place and theirs with loads of young kids tearing around, and taking the kids to the beach.
No wonder money was simple - we didn't have any! Apart from our home, which grew in value, we had my work's compulsory superannuation, which was 5% of my salary as 1995 started.
A credit card was still not really part of everyday life in 1995 but we did have a Bankcard, with a $500 limit, for emergencies only.
Money issues occupied about 30 minutes a month: basically, could we meet the mortgage repayment? Investment was something I did for our clients, and chatted about to Money viewers: I was building skills and knowledge.
It feels strange really.
All that was only 20 years ago, yet the focus on retirement and "how much do I need?" was never seen as much of an issue. We, along with most of our friends, figured we would pay off a house before retirement and we'd worry about anything else later.
There was always an age pension, which along with a house, was a pretty good place to be.
Crikey, it has got complicated now. The pressure is really on to live a far more expensive lifestyle than humans have ever imagined.
Adding to the pressure is the wonderful fact that we are living longer. Much longer. So, for perfectly sensible reasons (who would not want to lead a high-quality lifestyle for decades in retirement?) we now fret about the cost of life to come.
There are surveys everywhere telling us how much a "basic lifestyle", an "average lifestyle" and a "luxury lifestyle" will cost.
I guess what is good about this is that the pressure of living well now and putting money aside to fund "future luxury" is that we do have quite high, and growing, compulsory contributions to super.
As a nation we are doing really well with our mortgages - the majority of people with a mortgage are taking advantage of low rates and are well in front on their repayments. We have become avid property investors and share owners.
This is all great stuff. The $50 billion or so on our credit cards I'll leave alone for now but do me a favour and at least get a cheaper card.
Most people are still paying 18% on their card, so please change to a card with an interest rate under 10%; there are quite a few out there. You will still get mugged by interest but under 10% gives you hope for survival.
Anyway, I am all for people working hard in their careers, building businesses and aiming to create wealth for a better future. In particular I love to encourage people to aim to be financially independent. This is a hell of a lot easier if you target a "basic" lifestyle.
These days it seems a basic lifestyle still means a couple of cars, Foxtel, eating out now and again and travelling overseas (but not every year).
Good grief! This was truly luxury living just 20 years ago. "Comfortable" and "luxury" improve on this.
So one option I suspect many of us baby boomers approaching retirement may well take is a more pragmatic approach to what constitutes a "nice" lifestyle.
I am far from convinced that those living a "luxury" lifestyle are happier and more satisfied with their lives, family and friendships than those choosing "comfortable" or "basic".
In fact, I can't wait to see the "satisfaction with life" surveys in years to come. I reckon money will not be a key component.
However, I have grafted away, and enjoyed it, for many decades to build a pot of money.
And like all Money readers, I want to invest this to give Vicki and me choices about how we live. So worrying about our money is just a fact of life.
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