Monday, March 19, 2012

Early Retirement

It's a trifle heartwarming . . . or maybe "heartburning." A story on Yahoo! news today, "Early Retirement Without a Fortune," gave sketches of four people who retired early without having accumulated "a fortune," as the report put it.

All four people had a couple of things in common. They all managed to save enough out of wage income to invest prudently in assets that would generate sufficient income to meet modest retirement needs.

The article focused on how, if you keep your desires within limits, you can be quite happy with a relatively modest income, even $7,000 per year, as one 36-year-old who retired at 33 enjoys.

That is, of course, one key to a financially secure retirement. Don't expect to be able to spend like you did when you were making a lot of money. Another is the discipline to be able to live within your means. Yet another is not to speculate in the market, but to select sound and prudent investments that generate dividend income, not speculative changes in share value.

All of that is very good advice, and people would do well to follow it. From the Just Third Way perspective, however, there is one big problem. The writer of the article and the four people profiled all assumed as a given that the only way to accumulate enough money to invest is to cut consumption and accumulate money savings. For that, you need a wage system job. As jobs continue to disappear, how are people supposed to save for retirement?

Capital Homesteading addresses that problem by shifting the financing of new capital from past reductions in consumption, to future increases in production. This would mean that people who cannot find wage system jobs could save for retirement, too — and decrease the welfare and entitlement burden on the government at all levels dramatically.

We don't regard Capital Homesteading as a panacea for all the world's ills. Refusing to implement it because it won't do everything you want done immediately, however, is a little like not having a cut attended to because the antiseptic that will prevent gangrene won't cure your headache.

Consider showing up at the annual Rally outside the Federal Reserve on Friday, 11:30 am to 1:30 pm April 20, 2012 to demonstrate your support for a return to monetary and fiscal sanity — and prosperity.

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