There’s been a series of pretty pessimistic or otherwise negative articles of late in the personal finance realm that are worth addressing here. There is a thread to construct (or revisit as the case may be) to weave all of them together and then hopefully put a positive view on what reads like a DEPRESSING outcome.

First is that article from the WSJ over the weekend about people pulling down six-figure incomes but being on the verge of, or already having declared, BANKRUPTCY. The article is about two things. One is the struggle for people to figure out what they really need to be happy. A common theme for the people profiled is some sort of unhappiness, lack of fulfillment or esteem issue and they think the solution is buying stuff. That then evolves into various forms of denial about paying off the debt incurred attempting to buy happiness.

A few weeks ago there was a post on Motley Fool titled A Lot of Us Will Run Out of Money in Retirement. It cites some projections that 82% of the poorest among us will run out of money ranging to 13% among the wealthiest will run out of money. Any set of projections will either be right or wrong, obviously, so the issue really is whether you think in your situation it will be possible to accumulate what you need leading up to your version of retirement and then can it generate a reasonable income versus what you need it to generate. What I mean is, if you need your portfolio to generate $10,000/quarter and it safely generates $9800 then you are probably not going to be in a desperate situation versus needing $10,000 and only being able to generate $5300.

Next up is a profanity-laced, top down assessment of the struggles that await “this generation,” the author doesn’t specify Gen-x or Millennials or some other demographic. In and among all the profanity an interesting point is made about a collective lack of demand to drive the economy as a result of “this generation” being worse off than its parents.

The final link is to a story about a $4000 tiny house. Tiny houses are of course very small (technically should be on wheels to avoid property tax) and can be very cheap to build, although usually not $4000-cheap.

I’ve written a lot of posts about the psychology of saving, investing and (financial) life in general because there is a direct connection to financial plan success. Part of the equation in the WSJ article is the extent to which people spending money and going into debt trying to figure out what makes them happy. The sooner a person or couple figures this out, the less financial trial and error there will be trying to figure it out (turns out a $6000 watch wasn’t the answer).

Knowing the ingredients to your own happiness and fulfillment makes it easier to live below your means. Lifestyle and SAVINGS RATE are far more important to financial plan success because they are more within your control than the performance of the market and performance of your portfolio.

Figuring all of this out for yourself also ties into running out of money as noted in the Motley Fool link. You know about the 4% rule; at that withdrawal rate per the Bengen paper you have a 93% chance for your money outliving you. Well, the chances for success don’t exactly fall off a cliff if you take out 5% but the more you take out the less your chance for success, which is where monetizing a hobby comes in. For anyone new, this refers to putting in serious time to excel at something you enjoy while figuring out how it might be able to provide a supplementary income. This relieves some of the burden off of the portfolio, avoids being forced to find whatever you can just to make ends meet, and also keep you engaged.

The issue with the profane article is that it assumes people will simply sit back and just take what is foisted upon them. Some will, of course, but no one has to. I said the article was about the visibility for a lack of demand from the top down, the solution is from the bottom up; figuring yourself out, living below your means and having a high SAVINGS RATE.

Living in 200 square feet will not be the answer for too many people, but that isn’t really the takeaway, the takeaway is to make life a little simpler and that can be the answer for a lot of people.

All of the above will reduce the burden placed on the portfolio. No one will be worse off funding their lifestyle with 2% instead of 4%.

The investing aspect is learning about and making full use of the available tools. I had this conversation with someone the other day. No matter what interest rates do from here, investors/retirees will need tools that they did not need ten, 15 or 20 years ago when plain old bonds provided sufficient yields. It is easy to think equity dividends can be the entire solution after 65 months of rising equity prices, but like every previous bear market, when the next one comes we will read/hear stories about people who learned the hard way they had too much in equities (dividend oriented or otherwise).

The big takeaway from me is to do for yourself with your own comprehensive solution that address personal fulfillment, how you prepare for your future and how you execute your future. No cares more about how this will work out for you than you do.