Maintaining a low profile life as a pre requisite for a happy Retirement-Odunze Reginald C

Image credited to Telegraph.

According to research, people tend to adhere to the good things of life, psychology calls it hedonistic tendency.  But adhering to the good things of life has its positive and negative implications; there is always an opportunity cost.

In financial and retirement planning, maintaining a lower life style is the key to survival. People tend to look for the good things of life, a big car, a big house, designers cloths, gold and diamond accessories etc, the list could be endless but they do not they are buying liabilities instead of assets.

That is contrary to the mindsets of rich and wealth people in our society , wherever they are ,  we discovered that  a lower percentages of the  rich are more likely to spend less on frivolities than the percentage of poor, may be they understood the value of money, or they do not want go back to that poverty state. As the late MKO Abiola said that he was so poor that when he finally became rich, he has to be working so hard so as not go back to the former state.

In The Millionaire Next Door, authors Thomas J. Stanley and William D. Danko find that millionaires were more likely to drive a Ford than a Lexus or Mercedes.
“Many affluent respondents take joy in driving vehicles that do not denote so-called high status. They are more interested in objective measures of value. Some millionaires do spend considerable dollars for top-of-the-line luxury automobiles. But they are in the minority.”

But is it wise to embark on frivolous spending especially during retirement, from the little experience and my encounters with retirees spanning a period of seven years, I discovered that those retirees on frivolous spending usually end up miserable.

According to Emily Brandon in an article captioned   “8 tips for people who will retire in 2015-Emily Brandon”  “What you decide to do in retirement will have a big impact on your costs and quality of life.  "Certainly you will spend less on gas and don't have to spend as much on work clothes, but some people are also going to spend more money now because they have the time and don't just want to sit around the house," says Craig Schmith, a certified financial planner in Durham, North Carolina. "If you've got pent-up demand to travel, especially internationally, and you haven't had time to do that, you need to think about budgeting that in."

In Africa and especially Nigeria, majority of the retirees may also likely spend their money in election related expenditures, like sponsoring candidates, that is good development especially if the candidate wins but what about the disaster of failing election, the psychological effect  of loosing election, and the money involved , therefore  it will be wise for the retiree to check fully well before embarking on it as it will have a big impact in your budget. Some will also go ahead in spending their hard money to contest elections that is a good development because Abraham Lincoln once said that “Politics is too good a vocation to be left entirely to politicians” but what we are saying is that you need to think about budgeting that is involved and the impact it will have on your standard of life.

What you decide to do in retirement will have a big impact on your costs and quality of life and the earlier you realized that the better for you.

Odunze Reginald C is the Lead Consultant, Chareg consulting.