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Source link: http://archive.mises.org/16324/life-coach-says-blow-that-refund-check/

Life Coach Says Blow That Refund Check

April 1, 2011 by

As society is built on savings and accumulated capital, personal finance dictates that individuals live within their means and save for rainy days.  However, author, inspirational speaker, and life coach John P. Strelecky counsels us to live each day like we are dying.

Strelecky says we don’t know what the future brings, so spend more time doing what you want.  “Invest in you and the life you really want to live. Live your bucket list now,” he says.

For instance, those who have provided the U.S. government an interest-free loan this past year and will soon be repaid, don’t pay down debt or save the money, spend the money having an experience, urges the best-selling author.

The check a typical person is receiving from the IRS just isn’t enough to put away.  MarketWatch’s Jennifer Waters provides the example in her “Consumer Confidential” column.

A family gets a $5,000 tax refund (this year’s average, per person, is about $3,000, according to the IRS.) If the parents, who are 42 years old, invest that money, they could probably slightly more than double that by the time they retire 23 years later at 65.

In Strelecky’s view, “That’s not enough to justify the lifelong memory and time spent with children that a special trip together might generate,” writes Waters.

And for the person socking money into a 401k of stocks back in 2000, their retirement fund has been decimated.  “Because of that, not only do you not get to do the things you want to do, you don’t get the seven-day cruise, but a five-day cruise,” Strelecky said.

And who says you will even reach old age?  One in five men doesn’t get to celebrate a 65th birthday.  Live for today, urges Strelecky, whose “philosophy is that you buy the insurance now (in vacations, etc.) so that you have lived an amazing life.”   Lord Keynes would be proud, writing in Essays in Persuasion,

The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease

The idea that the only pleasure in life is derived from leisure is complete nonsense.  Strelecky is a relatively young man and by the looks of it a successful author and entrepreneur, speaking and hosting seminars related to his Big Five for Life concept. An idea that has morphed into certifying life coaches and executive coaches to teach Big Five for Life to others.

It doesn’t appear that Strelecky is slowing down and smelling the roses.  He’s working and probably loving it. And he’s likely not spending all his money either, plowing capital back into Big Five for Life projects.   Yet he is advising the average working stiff to blow their IRS check making memories.

Mr. Strelecky acts as if this money came from heaven:  Some kind of unearned bonus.  Squandering this money is no different than squandering a weekly paycheck: The reflection of a high-time preference and an uncivilized lifestyle.   Savers are independent and less likely to need handouts from either friends, relatives or government.   Those that squander their money are submissive, constantly making  excuses, and engaging in wishful thinking.

There is satisfaction to be gained from working, saving, and sacrificing that one doesn’t obtain slurping margaritas on board a cruise ship enjoying the sunset.

{ 17 comments }

Simon Grey April 1, 2011 at 5:01 pm

Actually, I think his advice is spot-on, at least given the constraints of the times in which we live. What’s the point in saving if inflation will ravage whatever you manage to accumulate? And what’s the point in saving if the government will pay you in your old age? And if the government will provide your health care? What reward is there in working hard and being prudent with your money if the government will simply take it from you in the form of taxes and make what’s left worthless in the form of inflation?

mushindo April 4, 2011 at 5:25 am

Yeah, but who said saving it has to be in cash? You could buy gold with it, thus ‘saving’ real money well protected from inflation. Or you could invest it in company stocks if you can find one with good prospects in an inflationary fiat money climate. Or invest it in expanding your business if you are an entrepreneur. Or ……..

Capn Mike April 1, 2011 at 5:21 pm

I’m with Simon.
You play by the rules of the game. Your savings growth will be puny due to pathetic interest rates, erased by inflation, and confiscated by a rapacious state. So go ahead, enjoy the “money” now, while it still has some value.
OR… better yet (seriously) use it as seed money for a new business. Borrow some more to help it along. WE borrowed obscene amounts to start our business back in the Carter days of double-digit inflation, and before the Volcker rate hikes.
Paid it all back with funny money after things took off.
So, as immoral as it sounds, if we’re all careening down that road to Hell, we might as well enjoy the ride.

Daniel April 1, 2011 at 8:35 pm

Don’t forget: inflation helps increase “profits” since costs are incurred now, whereas profits are gained in the future

Inquisitor April 1, 2011 at 10:00 pm

Reisman’s argument? I recall it from one of his lectures.

bagoh20 April 1, 2011 at 7:15 pm

Most people don’t really have a better place to put the money than into a pleasurable experience, which is all you will want in the end.

Robby April 1, 2011 at 8:12 pm

Gotta agree with the comments. Maybe not trips or other “experiences.” But I feel safer with stuff than I do with Federal Reserve notes going forward.

Donald Rowe April 1, 2011 at 9:23 pm

Duh, now I get it. It’s April Fool’s Day for comments.

Good one!

Inquisitor April 1, 2011 at 9:59 pm

They actually have a point. The current economy and flow of information is so horrendously rigged that what people conventionally perceive as “saving” is a loss-making proposition, particularly due to price inflation.

Donald Rowe April 2, 2011 at 5:24 am

Kind of like ‘go with the flow’ and ‘share the misery with the masses.’

Beware of internet advice.

You get what you pay for.

You rip what you sew.

iawai April 2, 2011 at 1:23 pm

“Beware of internet advice”

That’s meta.

But really, the point of “saving” is to be able to have a store of value in the future. Where can you get such a thing in today’s world? You can either invest in gratification or in “not losing your store of value quite as vast”. Most people aren’t even capable of finding a precious-metals market or finding out which capital investments will pay off in the ever uncertain future.

BioTube April 2, 2011 at 3:45 pm

Jewelry’s probably a better investment than holding cash now – you can bet your bottom dollar people will always want shiny things, but they could very easily stop wanting slips of paper.

HL April 2, 2011 at 5:08 pm

Trips to disneyland are for losers. Take that tax refund and bang some 7 gram rocks. Winning.

billwald April 4, 2011 at 12:28 pm

“As society is built on savings and accumulated capital, personal finance dictates that individuals live within their means and save for rainy days.”

WRONG! You all have been predicting runaway money inflation. He needs to convert his cash savings to hard and/or useful assets: land, booze, guns and ammo. Maybe junk silver.

“As society is built on savings and accumulated capital . . . ” WHY “AND?” Poetical writing if money IS capital?

Doesn’t compute that

Tim April 14, 2011 at 2:41 am

In a larger sense Mr. French’s advice if taken rather than Mr. Strelecky’s, would contribute to deflation or at least less inflation. This is NOT what the FED would like. So, ask yourself what most people would do in a highly inflationary time. They would blow it all now in anticipation of higher prices in the future. Conversely in a deflationary time they would save it all now anticipating lower prices in the future. In a sense we can, if done collectively, push the inflation/deflation monsters in a preferred direction. Right now I’ll take deflation over inflation if for no other reason than to thwart the FED. This is basically what deflationists like Robert Prechter and Harry Dent are saying will happen anyway for other motivating factors. And for another reason I prefer deflation because I think we still need to recoil from the last bubble some more.

worthy April 14, 2011 at 7:12 pm

Accumulated capital is freedom. That’s why I’ve been a saver all my life; and for more than the last 30 years have lived comfortably on the interest and capital gains those savings generated. (Even though a large portion of that income went to a spouse’s obsession with clothes, shoes, cosmetics and lottery tickets.) Spending rather than saving a tax refund. It’s exactly what you would expect from people who couldn’t plan their affairs well enough to avoid excess withholding in the first place.

Training to Be A Life Coach Dave May 30, 2011 at 3:10 pm

A great point. Many people never consider the current value of money. Sure, saving has its rewards – but those rewards must be offset, or at least reconciled with, the value of spending that money today. The idea of putting off enjoying the fruits of our labor for 40 years just to have a bunch of money when we are old is distressing. Of course . . . so is the idea of financially supporting all those who choose not to save at all :)

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