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Show Page 8 The Ogden Valley news Volume XXV Issue VIII June 15, 2018 Lessons from the Financial Independence Utahns Still Positive about Current Economic Conditions While Price Increases Temper Future Expectations & Early Retirement (FIRE) Community The Zions Bank Utah Consumer Attitude factor that tends to counter these perceptions is between your income and expenses such that By Hugh Norton How do you envision your retirement? For some, there’s an idealistic image that many share of days spent walking along a warm beach, endless travel and a leisurely lifestyle. On the other end of the spectrum, some people haven’t had the opportunities that would afford them the ability to stop working when they want, never get to retire in the traditional sense, and struggle to live on a fixed income once they’re no longer able to work. There’s also a middle ground—those who can afford to stop working and live a modest lifestyle. But the financial requirements for seniors have changed and grown over the years, and so this middle option may be less common as a result. Employer pensions and other retirement benefits aren’t as prevalent or plentiful as they once were. Longer life expectancy and a rising cost of living can make it more difficult to live purely on Social Security benefits and retirement savings alone. However, there are individuals and families who have been lucky enough to be in the position to retire decades before their 60s. They’re part of a social movement known as FIRE—financial independence and early retirement—that has its own values, rules, subgroups and lingo. What is FIRE? The idea of becoming financially independent, when you can live off the income from your savings and investments, and retiring early, a notion that can seem too good to be true. Even if the end goal is desirable, it may not be possible for many, and in cases where it is possible, some may not be up for the journey. Early retirees may live in small homes, drive old cars and avoid eating out prior to retirement – all with the goal of accumulating enough savings to live on after retirement. There is more than one way in which people have achieved FIRE. However, there are a few basic rules to live by that could help you get there: • Live a modest and frugal lifestyle and put most of your earnings (often over 50 percent) into savings and investments. • Try to find ways to increase your savings rate by cutting expenses and increasing your income. Creating and closely monitoring a budget can help. • Look for opportunities to increase your investment returns and grow your money faster. • Aim to have enough in your savings that you can retire early, perhaps in your 50s, 40s, 30s or even earlier. Reaching financial independence doesn’t necessarily mean you have to quit your job. However, you now have that option and the freedom that comes with it. How to Apply the Movement to Your Life Realistically, reaching FIRE may not be an option for everyone. But increasing the gap you have more money coming in than going out could help your financial situation even if you don’t think you can retire early (or event want to). Here are a few ways to incorporate the guiding principles of the FIRE movement into your life without going to extremes: Evaluate your priorities. This is always a great place to start. No one else gets to decide what’s truly important in your life. If you take the time to evaluate what you want and what’s important to you, it can help you set clear goals to strive for and a benchmark by which to measure the decisions that shape your financial future. Decrease expenses. No matter your aptitude for a frugal lifestyle, look for ways to cut costs in different areas of your life. Housing, transportation and food are often major monthly expenses, so it could help to focus on these areas. Some FIRE devotees sell their cars or trucks and walk or bike to work. Organizing a carpool or taking public transportation could be a better fit for your lifestyle. Increase your income. There are many ways to increase the other side of the equation as well. You could look for a side gig or negotiate a raise with your current employer. If you have the funds to make it work, taking on an investment property could also be a key to higher income. Avoid lifestyle inflation. It can be tempting to “upgrade” your lifestyle when your income increases. However, if your goal is to increase the gap between your income and expenses, you’ll want to maintain your lifestyle while your income rises. Aim for higher returns. Whether you’re a savvy investor or don’t know a stock from a bond, a little research and planning could help you make more money with your money. Even low-risk actions, such as moving your money to a bank or credit union that offers a higher interest rate, could help. Lowering the fees you pay on checking, savings and investment accounts could also help increase your returns. Bottom Line - Even if early retirement is not in your game plan, there are still valuable lessons and takeaways from the examples of those who have been able achieve this goal. If you’re intrigued by some of the concepts or think you may want to join others on the path to FIRE, there are resources and tools that can help. You can use basic online calculators to create a budget or check your savings progress and help you determine when you’ll be able to retire. Note: Hugh Norton directs Visa’s financial education programs. To follow Practical Money Skills on Twitter www.twitter.com/PracticalMoney. This article is intended to provide general information and should not be considered health, legal, tax or financial advice. Index (CAI) decreased 3.4 points to 110.7 in May, the lowest level since July 2016. Yearover-year the CAI has ticked down slightly, by 1.1 points, since May of 2017. In comparison, the national Consumer Confidence Index® increased 2.4 points to 128.0 this month and is 10.1 points higher than it was at this same time last year. The decrease in the overall CAI is largely due to dips in Utahns’ confidence about the future of the state economy. Month-to-month, the Utah Future Expectations index decreased 4.6 points to 103.4, representing a year-overyear decrease of 2.9 points. Compared to three months ago, fewer Utahns feel that the job market and household incomes will continue to grow over the next six to 12 months. While Utahns’ are feeling less confidence about the future economy, most feel that current conditions remain highly positive and that jobs in the state continue to be plentiful. The positive sentiment is consistent with Utah’s unemployment rate of 3.1, which is at a 10-year low and is at or below what economists believe is typical “full employment” level. Two factors impacting Utahns’ perception of the future are increasing prices of gasoline and rising home prices. Even after record increases in the price of gasoline, 69 percent of Utahns still believe gas prices will increase in the next twelve months. Similarly, 80 percent of Utahns believe the prices of homes will increase in the next twelve months. That is the highest percentage of Utahns expecting an increase in the price of homes since Zions Bank and Cicero Group began tracking consumer attitudes in Utah in 2011. “As Utah continues to foster a robust job market that both keeps people here and attracts others to Utah, consumers will continue to see strong wage and housing price growth,” said Scott Andersen, president and CEO of Zions Bank. “Job availability and the price and availability of housing are two of the largest factors that influence people’s perception of the state of the economy.” “Increasing prices for gas and housing impact Utahns’ expectations,” said Randy Shumway, chairman and partner at Cicero Group. “The key PINEVIEW cont. from page 1 The vehicle went through the pull out area and over the embankment into the reservoir. Once the vehicle was in the reservoir, the driver was able to take off her seatbelt and escape under her own power. The incident was only investigated for a lane travel violation. The driver was taken to a local hospital by friends and family and treated for minor cuts, scrapes, and bruises. On June 4, at approximately 8:00 a.m., a local tow company recovered the vehicle from the reservoir. wage growth. If Utahns see their wages increasing above inflation, then their perceptions will improve. Over the past year we have seen strong job and wage growth and this was more apparent than price increases. Now things have reversed. Housing and gas price increases are front page news and are hitting Utahns’ pocketbooks in real ways. This is starting to affect how Utahns see the overall economy.” Northern Utah Economic Landscape: Cache and Box Elder County - The unemployment rate for Cache County remained unchanged at 2.6 percent in March, according to the Utah Department of Workforce Services. Cache County’s unemployment rate rests below the state average of 3.1 percent and well below the national average of 4.1 percent measured in the same period. The most recent report from RealtyTrac® shows that approximately 2 in every 10,000 homes were in foreclosure in Cache County in April, remaining unchanged from February. The unemployment rate in Box Elder County remained unchanged at 3.0 percent in March, according to the Utah Department of Workforce Services. In the April report by RealtyTrac®, approximately 9 in every 10,000 homes in Box Elder County were in foreclosure, up from 4 in every 10,000 homes in February. In a recent interview with Utah Business, Box Elder County’s economic development director, Mitch Zundel, laid out his plans to help make Box Elder County an even better place to live and work. He said that they are going to focus, first, on attracting more retail and restaurants to the County. “Keeping their employees close is an issue for a lot of businesses. Having more amenities would help with that. Our plan came from a lot of companies telling us what issues they are having as well as surveying small to large businesses.” Additionally, Zundel is making plans to create a loan program designed to help small businesses get funding. Zions Bank, a division of ZB, N.A. Founded in 1873, Zions Bank has been serving the communities of Utah for more than 140 years. Additional information is available at <www. zionsbank.com> Utah is currently in the 100 deadliest days of summer. Weber County Sheriff ’s Office is asking everyone to please buckle up, slow down, and stay alert while driving. |
