Greg Shearer, 44, woke up four years ago to the startling revelation that he wasn't going to die.
Not that death was ever looming ominously. Quite the opposite. He was living high on the hog, going to bars and restaurants, enjoying his boat and his Jet Skis. He simply lived as if there were no tomorrow. That did cause some health problems, but none of them fatal.
"I suddenly thought, 'Oh, my God. I might live until I'm 80,' " he said.
In his characteristically impulsive way, he vowed to accumulate $1 million so he could retire comfortably at 65.
Unfortunately, he has made little progress in the last four years, and that leaves him with just two choices: He can drastically alter his lifestyle today, or he can dramatically reduce his expectations for tomorrow. In short, unless Shearer learns to restrain himself, he'll never attain the comfortable retirement that he wants, said Margaret Mullen, a fee-only financial advisor in Los Angeles.
But restraint is something that the Claremont adult-video salesman, who has filed for personal bankruptcy three times, finds exceptionally difficult.
"Greg Shearer is a spender. I'm a single guy. I'm a sales type," he said. "But I've made significant changes in the last few years. I used to be like a sailor on payday."
Shearer believes he's considerably more responsible now than he was in the 1980s and '90s, when free spending on credit cards and a complete failure to pay income taxes led him to a series of bankruptcy proceedings. After the last one, which was filed about three years ago, he vowed to turn over a new leaf.
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Of course, not everyone believes that his financial about-face is completely sincere. When he went to lease his car a year ago, the leasing agent looked at his credit history and remarked that Shearer appears to file bankruptcy roughly every six years, completing the latest filing less than two years earlier.
"I told him, 'Well, you're in luck. It's only a three-year lease,' " Shearer quipped. Translation: If he maintains his pattern, the lease will be paid off shortly before his next bankruptcy.
To his credit, Shearer has saved some money in the last few years. He had about $20,000 in a combination of retirement and savings accounts at the end of October. But, because the vast majority of his portfolio is in technology stocks that have been trounced lately, the value of his accounts has plunged.
Worse still, his balance sheet shows that he spent $9,000 more than he made in 1999 and that he continues to spend more than he earns. Shearer maintains that the numbers are misleading because he may have accidentally double-counted some expenses.
To add to the muddle, Shearer is self-employed and writes off copious business expenses. According to the financial statement he filled out for The Times, his net income--that's income after taxes and business expenses--was just $2,500 a month, or $30,000 in 1999, a year in which his gross income exceeded $85,000.
"I just have no handle on how much is coming in and where it's going," Mullen said while probing for details on a variety of expenses listed on Shearer's balance sheet.
Shearer leases a 1999 Mercury Grand Marquis, which with insurance, maintenance and gasoline, costs roughly $13,000 a year. His three-bedroom apartment costs $825 per month, but he splits that bill with a roommate. His cost: $4,950 a year. Utilities add $1,500 to his fixed expenses, and he lists his telephone expenses at nearly $9,000 a year--largely because he runs his business out of his Claremont home. Health and renter insurance cost about $2,000 a year.
However, he expects to save considerably on one of his largest discretionary expenses: dining out. He spent nearly $12,000 last year on pizzas and bar tabs, he said. He expects that amount to drop to just $1,200 by next year. Why? He had gastric bypass surgery to reduce the size of his stomach. That not only saves money on food, but also on prescription medicines, which were needed to deal with medical problems caused by his obesity. Before the late-August operation, Shearer, who is 5-feet-7, weighed 369 pounds. He's now down to less than 300.
"I didn't do it to be pretty," he said. "That's eliminated $150 a month in prescription drug costs."
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Now that he doesn't have as many medical costs and won't be eating out as much, he expects it to be a cinch to save. However, Mullen cautioned him about being unrealistic. His surgery was only a few months ago, but he has been overspending all his adult life.
Moreover, even assuming that Shearer makes major cuts in meal and medical expenses, the $1 million that he wants to save for retirement won't be enough to keep him in the style to which he's become accustomed, Mullen said. By piecing together information from Shearer's balance sheet, Mullen estimated that Shearer's personal expenses amounted to about $4,000 per month.
