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Don't Eat the Seed Corn

Phil Town
Phil Town

A lot of people spend all their income on living expenses and, as a result, don’t have enough to retire today and won’t have enough to retire early tomorrow, either.

Back in the old days, farmers would say, “Don’t eat your seed corn.”

Seed corn is what farmers save to plant next year to get a crop to live on in the future. If you eat the seed corn, you may live well this year, but then you could have huge problems next year.

A lot of you need to take a lesson from the farmers, because you’re eating your seed corn.

If you want to retire in 15 years but your lifestyle eats up all of your income, what do you do?

You make some hard choices and take action:

  1. Study and learn The Rule while you get another job and make $500 a month extra to put in an IRA, then start practicing The Rule and banking 15 percent each year.

  2. Study and learn The Rule while you cut down on your expenses by $500 a month, put the savings in an IRA, and then start making 15 percent under The Rule.

Here’s the good news:

Once you learn Rule #1 and can make 15 percent a year, the total amount of money you’ll need to retire is going to be a much smaller pile than you thought. A Rule #1 investor who is okay with a $50,000-a-year lifestyle needs only $300,000 to retire. Even with $0 saved today, a Rule #1 investor who can save $500 a month will have $300,000 in less than 15 years.

If you’ll do that, you can retire in 15 years with $50,000 a year income for the rest of your life. And if you have $50,000 right now (the average for a baby-boomer family) you can retire in ten years or less.

You can do this.

Just don’t eat the seed corn.

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