Goal: Numbers – Q&A

I hope you have already read all the posts about the Five Numbers. Here are some questions and answers:

Q: Do I have to get any or all of the numbers met before I pay down my non-mortgage debt?
A: No. Cut your expenses so that you can pay down your debt and put some money in towards your numbers (especially your First Number) at the same time. Or, if your debts are small and can be paid off in a few months, go ahead and pay the debts off. Then throw the money that was going towards the debts at your numbers. If you have to choose between your numbers and your debt… you HAVE to deal with your debts! Then use whatever is left over for your numbers.

Q: Won’t I be shorting myself hundreds of thousands of dollars in retirement if I take them in order?
A: Maybe. Here’s one of the reasons why the real experts are reluctant to give out hard numbers for general readers like me. Your situation is different from most people’s. If you work only on your first number for three years, then reach it, you’ve lost out on the compounding interest for your second and third numbers. Over the next ten, twenty, thirty, forty years, that CAN cost you big at retirement. A better plan, depending on your specific situation, may be to treat your first three numbers like low-interest debts: Set up a monthly payment plan for them just as you would for your credit cards, home equity loans, or bank loans.

Q: Did you just contradict yourself by saying I need to work on my first three numbers simultaneously, instead of in order – like you said in the first article?
A: Yes. I did just contradict myself. Give yourself a Pookah Paw of Approval – You are thinking critically and reading carefully. Those are key components of your future success.

I don’t have all the answers. If I did, Warren Buffet would be my limo driver.

Pookah would sleep on a white silk comfy-nest in sunbeams whenever she wants to show off her beautiful silky fur. Buffet would be small tasty bird, delicious fishes, canned carne, with catnip seasonings.

What I am presenting here is ONE system that CAN work.

What I Want is for you to look at this system, and see how you can use it, or use parts of it, to help you live life like Pookah.

Q: This system doesn’t address debts at all! Why not?
A: Because this system isn’t about clearing out your debts. This system is about setting and achieving goals for financial security. It represents one “ideal” situation that you want to achieve.

Q: Why did you put the 401K contribution before the IRA contribution?
A: Because the 401K contribution USUALLY comes straight out of your pay before taxes, and most importantly, before you get your hands on your pay money. Out of sight, out of mind. This way, you don’t have to think about it, don’t have to remember to send the payment in, and don’t have to worry about forgetting it. That’s more free time for you to do other things… like figure out ways to cut expenses, or increase income, or paying off more of your debts, or reaching your numbers.

Q: Where are you in this?
A: I’m about to achieve my First Number again, by the end of November. It will take me until the end of 2010 to achieve my Second Number – assuming that nothing comes up to make me change it – due to employment requirements. I start heading towards my Third Number this December, having achieved my First Number. I let my Fourth Number lapse, but will pick that back up in December, January (2010). So, by the end of this year, I will have my First and Fourth numbers. By the middle of next year, I’ll have my third Number. By the end of next year, I’ll have my second number. I’m working on my Fifth Number in tandem with the others.

My specific circumstances, and my understanding of where I’m at vs. where I need to be, caused me to make some modifications about how I go about achieving the five numbers. I have achieved the first four numbers at two previous times in my life. I made serious mistakes the first time and had to start over. I got clobbered by medical issues the second time, along with making serious mistakes, and had to start over again.

If I had it to do over again, I would have trusted myself more and other people less the first time. I still would have been clobbered by the medical issues, but I would have been better prepared for them. So the clobbering would probably not be so… clobber-y.

At each point along the way, I’ve learned more.

Q: What does Pookah think of all this?
A: PURRRRRRRRR!!!!

What Do You Do When You Have All Five Numbers?

You give yourself another Pookah Paw of Approval for having moved firmly into Pookah Finances 201.

You reward yourself with a vacation. Even if it’s just a fishing trip to the local pond.

You handle the next financial emergency that hits you more easily.

You lay down some of those worries you’ve been carrying.

You live a stronger, better, more beautiful life.

You can spend more time with your family.

You can spend more time becoming you.

You live life more like Pookah.

You get ready for moving to Pookah Finances 301.

You start hunting for those serious answers instead of general advice and platitudes.

Next, an Afterword with a few comments.

3 Responses to “Goal: Numbers – Q&A”

  1. Titti says:

    You simply need to get on a werttin budget. You need to cut up the cards and start paying down these balances. You should be debt free whan you buy a house, or you will struggle and find constant financial probs. Get on a werttin budget. Sell things you don’t need. Stop going out to eat. Take second jobs, third jobs. Pay the smallest balance off, first, work your way through to the highest balance. Sell your car. Live within your harvest

  2. PookahBoss says:

    Ok, typo corrected. I apologize for taking longer than expected. My day job suddenly had overnight requirements :/

    — PookahBoss

  3. PookahBoss says:

    All,

    There’s a typo in the question, “Where are you in this?”

    The line, “I have achieved all five numbers at two previous times in my life,” should read, “I have achieved the first four numbers at two previous times in my life.”

    I’ll get that corrected tonight. Hopefully before Pookah notices.

    — PookahBoss.

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