One of the common phrases you hear ex-working professionals voice out in retirement is this; “Children please understand, there is no more money like before.”
This statement signifies a fall from a privileged life. Suddenly there is now caution on how money is spent. And money is now spent more wisely than before. The truth is most working professionals are stuck in the dilemma of not saving when there is money to be saved. And then savings when there is not much money to be saved.
Worse of all is that they are turning into savings advisors in retirement. And are advising others at a time when their own poor savings habit has led to a low-quality life. If you want to enter retirement with financial confidence, you must be wise enough to save when there is money to be saved. You must also be proud of your savings at the end of your career life. And be wise at a time when wisdom is profitable for you. Wisdom is only profitable when it can undo a bad condition. When you are already in a financial pit, only regrets lie there.
So why do many working professionals end up in retirement with a basement life?
The answer is simple but not simple for the unwise.
First, many professionals have good intentions but do not back their good intentions with a good plan. Good intentions are useless without a plan. And there are many good intentioned people living unfulfilled lives in the world. If your good intention will count for anything it must be backed up with a plan. It is your plan that becomes your reality in retirement and not your intentions. Thus, without a good plan your life will move from up floor to ground floor.
Second, many people have trouble saving when there is money to be saved. And this is so for three reasons.
First, they are working with a wrong savings calculation. Most people have only a faint idea of the savings it will require to achieve their dream retirement life. People are saving leftovers, and they are saving as if they have all the time. If you know that you have only 10, 5 or even one month to save the money that will fund your life for another 15, 20 or 25years. You will save differently.
Second, many people have the wrong perspective of time. They do not know how much time it will take to achieve their dream retirement life. It takes a long time. And the time is long not because of the investment vehicles but because of the small size of most people’s cash reserves. If you have the right amount of cash reserves you can achieve financial freedom tomorrow. There is also the disadvantage of time. The less time you have the more likely it is that you would settle for a downgraded life. If time is on your side at least you can build the size of savings that can buy you financial freedom. Thus, time is a bigger problem for most pre-retiree than income.
The third reason is that most people are either gambling and losing money or they are tying down their money in difficult to liquidate assets. Life in retirement will be run by cash. So it is either you have the cash or you have the investments that can easily produce cash. Even with the largest size of solid assets you can still be hungry and broke in retirement. Solid investments like real estate are great housing investments. They perform poorly as a dependable investment for your retirement income.
The key to a restful retirement is to do more liquid and stable investments than solid investments. And to do more guaranteed income investments than volatile and gaseous income investments. If you cannot say when your income will come, how it will come. And the exact amount that will come as you can say for your salary. You have a less optimal retirement income, and it will create stress and anxiety for you in retirement.
So, what then can you do to correct things from here?
You can do Four things.
The first thing is to re-prioritize retirement and do so with your savings and not with words. If you still lose over 80% of your income to expenses. You are working harder on a vanishing privileged lifestyle than you are doing creating a better life for yourself in retirement. Your savings should be between 25%-60% of your income if you are serious about retirement.
Second, you need to stop losing money and tying more money down in solid assets. You need liquid investments that can produce stable, recurring, and predictable passive income in retirement.
Third, you need to pay attention to your health. If you enter retirement with irreversible health conditions. Your entire retirement plan will be destroyed. So, if you have not yet had any health crises but you fear one happening to you, chances are high there is one around the corner. Good health and fear do not mix. So, if you have fears about health crises there is a reason for your fear. Thankfully you can do something about it today. Health crises in retirement come knocking on doors that look and seem healthy today but do not know why. Only those that deliberately invest in their health. And stick to wise health rituals will be vindicated in retirement. You can live a healthy and productive life in retirement without dragging your family into poverty. And you can also die a good death at the end of your life without consuming quality time. Health crises happen not because of age but because of bad lifestyle choices. So you must gain intelligence about your body and invest in it.
Fourth, you must develop high-income skills. High-income skills are those skills you need to earn income outside a Job. Chances are high that your current income and savings cannot fund your dream retirement life. This means that you need to earn extra income. And the only way to earn extra income without breaking your back is to develop high-income skills.
Unfortunately, the skills that you have today are support skills. Support skills work best within the support environment of a job. Thrown out there in the outer society these skills will fail. You need skills that can work in the chaotic outer society independent of a job. Skills that can create income from scratch, and convert your own five loaves of bread and two fishes into a banquet that can feed ten thousand. Without these kinds of skills, you cannot enjoy rich retirement life. If you need help developing these skills, send an email to [email protected]
One thing is sure at this point in your life. Without a plan, your life will downgrade in retirement. Your plan today is what will determine your retirement life tomorrow. The big question is do you have a plan, and will your plan deliver your desired retirement results? If not then you need help. And we can help you. To get you started I have created a special Template that will show you how to create and structure your own 6 or 7figure passive income in retirement. If you want this template, send an email to [email protected]
The greatest tragedy in life is to have a past life that is bigger and better than your retirement life.
About the author
When Grace lost both parents before age 9, she was told that her place was at the bottom of the table where there is lack and scarcity. But rather than shrink to the bottom, Grace decided to create her own wealth table. Today Grace O. Agada is the most sought-after Financial Planning expert in Nigeria. She is a renowned Author and Keynote Speaker and is popularly known as the Upper-Class Mentor. Grace is the Author of three books and possibly the most widely read financial articles. Her articles are spread across seven national newspapers and four of the most popular Nigerian Blogs. Grace is also the Founder of the University of Wealth, and she is on a mission to shrink the middle class and populate the upper class. Grace has been featured on BBC Africa. Business Day TV. Inspiration FM. and inside Naijatv. And she consults for Numerous Top Organizations, Company Directors, CEOs, Senior Executives, and High-Income Professionals.