screw-ups on my way to a million

Screw-ups on My Way to a Million: Making Assumptions 6


Let’s put it out there, making assumptions is making an ass out of u and me. Mostly though, making an ass of out myself. On my way to wealth, I’ve made a few of them. Today in the series on Screw-ups on My Way to a Million: Making Assumptions. As you can guess, most of them wrong.

Is making assumptions bad?

That is a tough question. I’ve made several wrong ones but at the same time my entire path to wealth and my continued growth/stability of my wealth is premised on the biggest assumption of them all: The stock market will go up in the long run. Without that assumption I may as well start applying for work today and give up retirement.

Maybe that assumption is safer to make because of the players involved. I’m fully aware the system might be rigged. To what extend I don’t know. What I do know is that those that may have rigged the system mostly have one goal in mind: Get wealthy, wealthier and wealthiest. That global desire, I believe will make the market go up in the long run. Sure there will be bumps on the way like 2008, but let’s be honest, those that caused that, actually came out having more than ever.

So some assumptions, I’ll keep alive and fortunately have not yet, made an ass of me.

I’ve gone wrong on assumptions that have mostly been on a micro level. Assumptions about the things and people around me. Assumptions made about work, income, children and health.

Don’t make assumption about your income

Look at people in bankruptcy and there is a good chance it was caused by one of two things, loss of Income and/or Health (one may very well lead to the other). More on health later but let’s look at income first. Unfortunately for most of us in America (and in growing number others in other Nations as well) life is about accumulating more and more. So in many cases, whenever raises are handed out, the extra money will go to more: a bigger car, a bigger house and of course that boat that adorns your garage (99.9% of the year). Why do we do it? No matter how insecure the job market is, we always assume there will be another raise somewhere down the line.

Instead of assuming there will always be raises and always work, which will lead to disappointment, how about we change it, into “One day that raise, or that job won’t be there”. Proven wrong on the latter can only bring gratification, but in the meantime you can prepare for it.

Don’t assume the people around you will live according to your plan

In the early days of my plan I assumed that I would retire early and that Mrs. MI10 would continue to bring in a modest amount of income. Oh, and having children? I assumed I would hold off on that as well for a while. I know, some of you are now thinking, what a schmuck, especially on that last one. My wife thought differently and made a real ass of me on that one. We ended up having children at the age of 38 which is late in life and the basis of a movie called Idiocracy (watch it, I can’t help but draw parallels to what is happening these days).

I had no right to make assumptions about my wife’s reproductive system, and I was also proven wrong on that continued income. Btw, we came out of it okay. An additional chunk added to our net worth made up for the lost income and my children are the best thing that ever happened in my life (that and having met my wife of course).

Don’t get me wrong, even though only one might be planning, it takes two in a relationship to make it happen. That means you can’t make assumptions about each other’s lives that are crucial to the plan. Make sure you and your partner are on the same page when it comes to life choices. Also realize life doesn’t always go according to plan. Whenever you plan for the long term make sure you incorporate some flexibility.

Money doesn’t make happy

By now we should know, right? We’ve been told a million times. So many of us still assume being rich comes with a dose of happiness. It doesn’t. Read my book for the gory details but suffice it to say: You make your own happiness, money doesn’t. What money can do for you is open doors to discovering happiness but it still lies with you, not with what’s in your wallet. Money can buy you things, but things don’t make happy. It is up to you to find happiness with the things you have. As you may discover, the fewer things, the more happiness they bring.

Health is a fickle thing

It is safe to assume that bad health will probably lead to high expenses. You don’t have to assume since it is a fact: no matter how well you think you are insured, not everything is covered. It is not safe to assume that living healthy guarantees good health. There are accidents and there is genetics. We don’t live ultra-healthy but I exercise every day, Mrs. MI10 is vegetarian and we try to serve our children healthy food. We’ve recently learned that no matter what we would have done different, nothing would have prevented our son to get Type 1 Diabetes. Type 1 happens to be just one of the diseases no one sees coming. Of course there are all the different kinds of cancer and mental health ailments nothing can be done against. Hope it never comes and plan for the worst. Make sure you get yourself an emergency fund of some sort.

Wait? So should I or should I not?

I hate to admit, but I think in order to plan for the future you have to make some assumptions. “Stock market needs to go up for this to work”, “I assume my pension will be there to augment, my social security”, “There will be social security”. Maybe we should always assume then some assumption will be wrong and will make an Ass of U and Me.

I’d love to hear of some of the assumptions you rely on, or those that made a huge…

Good luck reaching your financial goals.


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About Maarten van Lier

Maarten came to this country with a suitcase and a diploma. He created a financial plan and goal to become a millionaire in 10 years. He successfully turned his financial goals into reality, wrote a book about it and now blogs actively in hope of inspiring other to do the same.


6 thoughts on “Screw-ups on My Way to a Million: Making Assumptions

  • Mrs Groovy

    Great points, Maarten. We’re assuming we’ll live to our 90s which means making our money live equally long. We’re also assuming Mr G’s small pension check will arrive regularly, we’ll let you know how that works out. And we’re counting on receiving 75% of our social security benefits although we haven’t figured it into our net worth.

    Of course health and health insurance can blow up our assumptions. Have you ever looked into healthcare ministries? I don’t think they’d be good for your son with his diabetes but I’m wondering about your opinion, in general. It’s an alternative to ACA we may consider if costs get out of hand.

    • Maarten van Lier Post author

      Thx, I’m assuming a more modest 80 for myself and 83 for Mrs. MI10. If by then our kids can’t support us.. 😉 (yet another obnoxious assumption). I just met someone who participated in a Health Ministry. It wouldn’t apply to us for many reasons but mostly pre-existing conditions.

  • Emily @ JohnJaneDoe

    I used to have more assumptions than I do now. But we go forward with the assumption that we’ll continue to keep our rentals filled most of the time and Jon will be able to continue to do most of the maintenance, that long term the stock market pays off, and that we’ll all stay reasonably healthy. Maybe they are sucker’s bets, but we’ll keep playing our hand.

    • Maarten van Lier Post author

      That’s probably the spirit: Assume the best is like close hope for the best and that’s really all we can do. One should prepare for the times thing might not go our way. In effect, our effort to grow wealth came out of the fear that someday a disease would come along or we’d face a future without a financial catch net. Our worst fear came through but we’re ready to face it today, thanks to being prepared. A lot of things you can’t control but certainly prepare for.

  • Full Time Finance

    I tend to take a plan for the worst hope for the best approach. Nothing in life is guaranteed and we can drive ourselves crazy thinking of every possibility, but if you cover the most likely in most situations you’ll be fine. Ie proper insurance, some money in safe investments, exercise etc.

    • Maarten van Lier Post author

      I agree planning for the worst is the best approach. Proper insurance nowadays, I’m not sure you can plan for. Most people depend on their employer for semi-decent health coverage. Employment is not a guarantee and then even those with insurance policies won’t cover all. Affordable Care Act changes each year (and generally not for the best). So in the end it does add up to planning for the worst and the worst should include sub-par insurance.

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