These two words make you rethink retirement
<p><strong><em>Nobby Kleinman is an award-winning ex financial planner who developed <a href="http://moneyrules.com.au/" target="_blank"><span style="text-decoration: underline;">Money Rules</span></a>, a personal money management program which anyone can use.</em></strong></p>
<p>This is a question many of us often ask ourselves. Although few believe we would drastically change much, it is the most telling when the day of retirement comes up and the ensuing years of time.</p>
<p>The line is drawn in the sand. This is the time for most when the income stops. For those who have been saving their money, this is the day when the tide of income starts to flow the opposite way.</p>
<p>Although not immediately evident, as one year passes into another, the drop in the account balances becomes ever more noticeable. Within a short matter of years, what seemed to be a secure and sufficient lump sum has become a much smaller pile and it is just dwindling and draining away.</p>
<p>It won’t matter anymore what you do to try and stop it from eroding, you will be overcome by how quickly it will just slip through your fingers, never to be replenished. Just like a dam in a drought, you will be exposed, financially naked and emotionally stripped bare. </p>
<p>Trying to stay afloat, you exhaust all your avenues of selling personal assets which were once prized possessions. You have cut back on all the expenses such as heating as you go to bed early in order to stay warm after having a meagre supper of soup and toast. It’s lucky that you kept that old tv because the internet is too expensive to use as your television. Your phone is the most basic you can get and your only means of connection to the outside world. Your clothes and a few pieces of furniture are what you live in now.</p>
<p>It broke your heart when you had to sell the family home in the suburb where you had lived for so long with great neighbours, but it was such a valuable asset and you needed the money. Like many, you had become asset rich and cash poor. This was a better option than the reverse mortgage they tried to convince you to take, because you wanted to leave something for the kids rather than a debt.</p>
<p>But there is only so much that you can reduce in your life before you find yourself living on the street. You had downsized to a much smaller place, but it is so far way that even the family only visit during holidays. Your major concern is wanting to be close to community facilities, especially hospital and medical assistance, because you are not as young as you used to be.</p>
<p>This is where you are going to be spending the last days of your life. Although the sun rises every morning, it is just the beginning of another long day filled with despair about how you are going to fill in the time.</p>
<p>Thank goodness the government helps out with the pension!</p>
<p><strong>Imagine if only… given your time over again</strong></p>
<p>You lived your life by the rules. But those rules were set by other people for their benefit, not for yours. If you knew then what you know now, what would you have done differently? The government set rules, the churches set rules, the courts set rules, the employers set rules, the schools set rules and even society set rules.</p>
<p>But think back to those who were considered outlandish because they seemed to break the rules. Think about those who self-promoted themselves globally and lived by their own rules rather than those imposed by others. OK, so maybe your personality isn’t that of Richard Branson, or the Kardashians or Madonna or others who stand out in the world.</p>
<p><strong>But what if…</strong></p>
<p>What if you hadn’t listened to the rules or perhaps even just bent them somewhat to suit your own needs rather than those who imposed them. What if education only got you so far and inspiration and imagination had fired up your creative juices. Who could you have become? What would you have invented or what business would you have started? How could you have changed the world for humanity sharing your brilliance? How many people would have benefitted?</p>
<p>There are so many people who are changing the world every day and yet they are human beings just like you. They get dressed in exactly the same manner and move forward just by putting one foot in front of the other.</p>
<p><strong>How would your life have been different if only…</strong></p>
<p>Right now you have experience that you can pass on to others. You can be a mentor to those who follow. As parents teach and train their children, so too can you guide and direct other people to be rich and successful in their lives to become potentially rich and famous. All because they listened to a new set of rules.</p>
<p>The world changes every day. Taxis will be replaced by self-owned drivers in Uber. Hotels have competition in Airbnb. The horse and cart were replaced by the car and petrol engines will be replaced by electric vehicles. Even in the financial world, there are changes taking place. Consider the use of smart phones to pay for everything just like a credit card. Banks as they are today will become outdated.</p>
<p>Yet with all these changes in technology and lifestyle, people will still remain handcuffed to rules.</p>
<p>One of the most draining is money. It is simply a method of exchange, just a tool. But this very tool in any form controls the masses. When financial institutions lend money they tell also set the rules by which they want those funds repaid. Most people follow those rules and will pay dearly for the privilege of getting a loan. But given the opportunity of hindsight, how many would follow the same path knowing what they know once they are old enough to know better?</p>
<p>The average of people in America, Canada and Australia is 47% who reach retirement with a mortgage debt. Once the income stops, and the lump sum is paid out, how long do you think the remainder is going to last? The first half of this story is not imagination other than what people should consider may happen to them.</p>
<p>Debt is amongst the greatest problems of the western world and by the time anyone gets to realise it, the tide will have come in just like a tsunami washing over a generation of retired baby-boomers. It won’t stop there. The benefits which should have flowed through to the following generations will also have been washed away and the financial expectations of inheritances will be evaporated.</p>
<p>Coping with debt during the working years is one thing, but without storing away enough for those years after work has stopped is the most dangerous time approaching the global economy. Governments have been aware of it for more than 50 years with economic modelling. They know the number of taxpayers is declining to support the older generations.</p>
<p>Ultimately, the responsibility rests purely with each individual. If you know now what lies ahead, what will you change in your life? Don’t wait until you get to retirement only to find out you still have to pay out debts. You must start immediately. Financial planning is not just about insurance and investment. In fact, while insurance is important, until you have paid off all existing debt, your only investment should be in yourself.</p>
<p>Look at your situation now and be honest with your future. How much have you saved? How long did that take? How long will that last? If you pay out your debts right now, and how much do you have left? There is a much faster way to pay off debt and create wealth, just on your current income. Learn how to that and teach it to your children and your grandchildren, because neither the banks nor the government are going to.</p>
<p>When you get to retirement, what you have to live on is what you do for yourself.</p>
<p>Share your thoughts in the comments.</p>
<p><em>Learn how to master your money, create your wealth and retire early, just on your current income. Find out more in Nobby Kleinman’s latest book</em> <a href="https://s3.amazonaws.com/mr-ebook-spend-and-grow-rich/SpendandGrow-Rich.pdf" target="_blank"><strong><span style="text-decoration: underline;">Spend To Grow Rich</span></strong></a>.</p>
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