The Accumulation Trickle

The Accumulation Trickle

I have to admit that I was spoiled before. For most of my professional career, I earned multiples of what I spent. There was always excess. It was common to save 50-75% of my income each month. I could top off my 401K at the beginning of the year. Fund my pension. And still have plenty left over for the taxable account. Did I want to buy a car? No problem, just hold off on investing one month, and no need to get a loan. Those were the good old days. Now as I have transitioned into half retirement I have to come to terms with the accumulation trickle.

Money is still coming in. I am still saving more than I earn. But I can no longer drop thousands of dollars at a time without planning, and a consideration of whether my revenue streams will catch up.

It’s a slightly different world.

Emergency Fund

I have never really had an emergency fund before. The benefit of the business asset class and real estate is that money is always coming in. My emergency fund was my monthly salary. And there was always more than I ever needed.

While we still collect rent on real estate, my monthly wages are now much more modest. They certainly cover our expenses, but between tax deferred savings and other unexpected expenses, I have to think a lot more about cash flow and fund availability.

For the first time in my life I have an emergency fund. It is a good way to hedge against the accumulation trickle. In my bank accounts, I have almost a whole year of expenses saved up. Even those who have accumulated a reasonable amount of wealth can feel the crunch when most of their money is working for them in other investment vehicles.

The Hare and The Turtle

I used to be the hare. I could make money fast and furiously. Any decrement in our accounts could be erased in weeks. This was comfortable. I never worried about vacations or purchases. It felt good to invest each and every month. A few thousand here. A few thousand there. I felty like an active participant in the building of wealth.

Now I am more the turtle. As opposed to active income, I rely on passive compounding and cash flowing investments in sort of an accumulation trickle.

Dividends are great. They only pay out every few months though. Real estate pays me every month. But it takes a few months accumulation to withdraw anything of substance.

In a go go lifestyle, I have had to learn to stop and smell the roses. And I only get a whiff of the scent of money if I wait for quite awhile and really drink it in.

Worth It?

I definitely think so. These are first world problems. The ability to have enough and be able to cut back is a privilege. Yet, privilege is sometimes lost on those who never really suffered. I only know my own experience.

For me, the guy who always had cash barreling into the accounts, it is strange to watch the well run dry. It is strange to patiently monitor the accumulation trickle.

Maybe a little humility is good for me.

Final Thoughts

On paper we are doing wonderfully. There is enough to last for decades. yet emotionally, watching revenue streams dry up is never easy. While I still think it is worth it, I am actively working on shifting perspective.

Abundance is never about money anyway.

It’s about mindset.