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Other Articles from The Villager

What is your financial heaven?

Mon, 23 September 2013 03:00
by mr t
Columns

While waiting to meet up with some of my friends at a beachside restaurant in Walvis Bay recently, I took a seat at the bar and then began talking to the gentleman who was seated next to me.
He and his wife had both recently retired and now live their dream; retiring on the islands and travelling around the world. They bought a house in Swakopmund. They told me they would be on their way to their new life in a few days.
We had not discussed money, retirement, or the economy, yet out of the blue, this man said to me, “I am just a bit concerned.” I asked him what he was concerned about and he told me, “My wife and I have looked forward to our dream retirement for many years and now here we are. My worry is, we may not have put aside enough money to last through our retirement. But then again, I guess time will tell.” There was sadness in his voice, I could tell.
This man, after a lifetime of working hard towards his goal of retiring in Swakopmund with his wife, was already worried before they had even begun. He was already scared of running out of money.
That is not a way to live out the years that are supposed to be your reward for a lifetime of hard work!
Two ways to think about retirement
There are two ways to think about retirement - the traditional way and the modern way.
The difference between the modern philosophy and other financial philosophies and strategies is that most financial planners, insurance experts, spokespeople and journalists plan on two things upon your retirement:
1. You will have a fixed amount of money to live off that will earn you a small amount of interest, and
2. You will have a lower standard of living during retirement than when you were working, due to the loss of a salary and rising medical expenses that come with age.
The modern philosophy does not make those assumptions. Instead, we assume:
1. You have passive income coming in every month that equals or exceeds your living expenses… forever. In other words, you never have to worry about running out of money once you retire or stop working, and
2. Your standard of living remains the same or, in many cases, increases. That is why we measure wealth in terms of time. I cannot imagine a more horrible money problem than being 70, 80, 90, or 100 years old and knowing you are just about out of money.
Reaching your financial heaven
Following the traditional mentality on retirement is kind of a financial hell. No one wants to get to retirement and be worried about whether or not they will have enough money to live the life they want to. That is what happened to the gentleman I met in Walvis Bay. Tragic!
It’s financial hell to work hard all your life only to have to cut back on your standard of living as inflation, taxes and health costs eat away at your hard-earned retirement money.
We advocate for planning and reaching one’s financial heaven. This can be achieved by understanding one’s infinite wealth goal - what you need to live the life you want without having to worry about money, i.e.; making enough in cash flow through assets to cover your living expenses as you want them to be, not as they need to be.
Reaching your financial heaven requires determining your infinite wealth goal and aspiring to achieve your dream and then acquiring and applying the knowledge to realise it. Simple? Yes. Easy? Not necessarily. Worth it? More than you can imagine.
Start with financial education
Achieving your financial heaven is not an overnight process. It starts with financial education today and careful planning for tomorrow. When failure comes, successful people learn from that while poor minds cry aloud.
Today, if you want to avoid a financial hell and instead reach your financial heaven, I encourage you to start learning as much as you can about money and investing. Start with a class or read a book. From there, you might get a coach. Start applying your knowledge and slowly but surely, you’ll be building a rock-solid foundation for your retirement.
We are there to assist.