How Much Money Is Enough for Retirement?

WESTCHESTER COUNTY, NEW YORK – “Tom, you haven’t got enough money to retire,” says Grandpa…

Uh oh.

(More below.)

Our Last Night With Grandpa

Greetings from Westchester County, New York…

I’m writing to you today from the White Plains cancer hospital. I’m in the waiting room. I’ve got my notepad in front of me. I’ve got a pen in my hand. Nearby, I’ve got a coffee. And I’m sitting in a comfy armchair. Grandpa is downstairs getting blasted by radiation…

Tonight is our last night with Grandpa. Tomorrow we fly to the Idaho Falls airport and attempt to get our car out of long-term parking there. (A dear reader of these Postcards from Idaho Falls is going to help us.)

Then we’re going to sleep in cheap motels, eat in diners, and take back roads until we get to Florida. We should be there by Christmas. 

While we’re on the road, I’ve got a lot to think about (and Grandpa has 25 more days of radiation to endure by himself)… 

We opened our Christmas presents early because we’re leaving tomorrow, and we won’t see Grandpa again for a while. Here we are…

Three Priceless Things Our Nest Egg Buys Us

Back to our early retirement…

Through some hard work, some thrift, and a recent inheritance from my mother, Kate and I have managed to save up a nice little nest egg.

We’re debt-free. We’re both in our mid-40s. And we make a little income (from writing these Postcards).

We have no home and few possessions. And our kids don’t go to school. 

In other words, we have almost complete control and freedom over how we spend our time…

But are we in a position to never have to work for money again? 

I don’t think so. Our nest egg isn’t enough (although I think it’s close). Instead, what that nest egg buys us is three things you can’t put a price on: space, control, and perspective. What do I mean?

It buys us the space to think and act without the immediate worry of paying bills. It buys us total control over our time. And it buys us the perspective to see the world how it really is, not how we want to see it.

(Charlie Munger says you cannot truly understand the world until you’ve achieved financial independence. He’s superinvestor Warren Buffett’s partner at Berkshire Hathaway and one of my favorite teachers about life. “Whose bread I eat, his song I sing,” Munger cautions…)

In other words, our nest egg is not enough for us to give up active income, but it is enough for us to be discerning and thoughtful with how we use our time. And that’s an extremely valuable benefit.

So how will I use the time I’ve got left?

That’s what a long trip across America is good for… for clearing the head and thinking about the important things in life…

– Tom Dyson

P.S. We’ll send you our reports and pictures from the road.

P.P.S. The investment strategy we’re using for our savings remains the same. We aspire to buy as many shares as possible in great companies like Coca-Cola, McDonald’s, Hershey, Disney, and Berkshire Hathaway. Then, we’ll reinvest the dividends and hold these investments forever (or until the next bubble).

But right now, as regular readers know, the stock market is the most overvalued it’s ever been in history, thanks to years of government intervention.

The U.S. government is now bankrupt (although no one says it that way), and it’s preparing to “soft default” on its debts. That means it’ll keep interest rates below inflation, and water down the real value of its debt. They call this maneuver “inflating away the debt.” It’s one of the oldest tactics in the broke-government playbook.

So, while I don’t have a crystal ball… it seems probable that the opportunity for an epic big trade is coming. So we’re sitting on the sidelines in gold, waiting for that big opportunity, and we don’t own any shares in these great dividend-compounders for now.

Like what you’re reading? Send your thoughts to [email protected].

Readers thank Dusty for his second Postcard, “Travel Tales by Dusty Dyson, Part II” …

Reader comment: Loved your letter, Dusty! You have seen a lot of the world for a young man and have learned so much. Your description of experiences in India and Japan were so descriptive and wonderful. I’m in my eighties now and I traveled all over the world when I was employed. Memories that I will never forget, and I feel so fortunate that I had the opportunity to see and experience so much. You will also treasure your travel memories with your family for a lifetime.

Reader comment: Thanks for filling in for your Dad on this week’s Postcard. I really enjoyed it. You and your family live a very exciting life and reading your perspective on it was really nice. I don’t think I would enjoy the food in India, either! I hope you’ll write again soon!

Meanwhile, others support the Dyson family’s contrarian education…

Reader comment: The way you are teaching your kids is a lot better than what they will learn in school. They will turn out a lot smarter by being out in the everyday world, where they can see and learn all the different things that are going on. I was a public works director for 20 years, and I would always take a kid that had good, old horse sense over one that had a lot of schooling. They always thought they knew everything and really, they knew nothing. The other kid was always wanting to learn more and was brought up that way to work hard.

So I applaud you for the way you are teaching them. There are so many open fields of work that there are no young people going into them. Your kids would be paid as much as (or more) a kid going to college. I enjoy reading about your travels, Be safe, and God bless you and the family on your travels.

Reader comment: Whatever readers say about how you raise your kids, ignore it. They’ll be far better off than the poor kids in public education. I am happiest in small-town, rural America, as I assume you are, too. People treat each other better in small communities. That interaction really impacts lifestyle.

I respect the way you have spent time with your father at this time. It would be easier in most cases to have not. While all family dynamics are different, generally, we enjoy family in smaller doses. It speaks volumes to your family bond and will also be a great example for your kids. Enjoy your journey back to my part of the country (the west), and just know that my money is on your approach to educating your kids. Have fun, be safe, and keep writing 🙂

And finally, a reader appreciates the decision that changed the Dysons’ fate – and how it has inspired others…

Reader comment: The “spontaneous” post and the reader comments brought tears to my eyes. I am 81 and next fall plan to go trippin’ once again. I like: “It’s never too late and you’re never too old.” That stretches me a little, but stretching is good!

Tom’s note: As always, thanks for writing in! Please keep your messages coming at [email protected], and I’ll do my best to answer them in a future Friday mailbag edition.