A young man left his parent's farm to attend college in a large city.  Four years later the young graduate returned home.  While visiting the General Store, the proprietor asked him how he found farm life after the lights of the big city.

"Well," replied the young man, "You know, Ma and Pa sure have smartened up some since I've been gone."  The point of the story is hard to miss, but its ramifications are easily overlooked.

Each of us has gone through a period of our lives believing the older generation "nuts" for thinking, talking, and behaving as they do.  We questioned premises, values, morals, and the means through which they conducted their lives.  As time goes by, however, we evolve into people the rebellious teen in us would never recognize.

Somehow everything we were raised with returns to haunt our adult lives.  Many times I have opened my mouth to speak and heard my mother speaking.  Shocking isn't it? 

In the realm of ethics and values, many of these principles serve both society and ourselves very well, lending stability and continuity to our civilization.  Others, however, might be better forgotten given the changes that have occurred.  Even as the horse and buggy have given way to commuter trains and Formula 1 race cars, the evolution of fiscal philosophy and practice happened at the same astonishing rate, frequently unnoticed by the majority of Americans.

            To demonstrate the falsehoods:

                        "A penny saved is a penny earned." -- Ben Franklin

                        "Neither a borrower nor a lender be." -- William Shakespeare

"Get a good education so you can get a good job" -- Just about everyone's parents

"Retirement occurs at 65" -- Social Security System

"Life is basically over at 45" -- Your teenagers

"Get your home paid off before you retire" -- Financial planners of the past

The truth:

A penny saved is visible, taxable, earns very little, is inversely affected by inflation, and leaves you financially worse off after taxes and inflation.  The last place you can afford to keep your money is in cash.

William Shakespeare was obviously not familiar with the Federal Reserve System nor the concept that there are only two ways to make money…people at work or money at work.  The only conceivable way to put money to work is either to lend it or borrow it.

That good expensive education of yours will leave you with student loans, no job, and the task of competing with thousands of others just like you, whose skill sets and knowledge base can become as outdated as vinyl records several times in the course of your lifetime.  That good education must be acquired over and over again if you are to be competitive.

Retirement when and if it occurs at all is a financial event occasioned by your passive income, not a function associated with your age.  Not only is life not over at 45, it is not unusual for people to live to twice that age.  This means a financial plan calibrated to carry you to age 70 may be woefully inadequate.

As to paying off the home, with the price of housing over $250,000, can you really afford to concentrate that much of your wealth in one asset where it affectively earns 4.5% to 5.9%, the current cost of borrowing first mortgage money, or should it be earning 2 or 3 times that yield?

How carefully have you thought through your financial belief system?  Remember you should only take advice from someone who has what you want.  If they knew how to get it, they'd have it already.