Creating Wealth

Creating Wealth – What Does Retirement Look Like To You?

Let’s put aside the idea of creating wealth for a minute.  First of all, why do people work in the first place?

In order to be able to provide food, shelter, transportation, maybe a few comforts if nothing else for themselves and their family, right – and so that someday they hopefully won’t have to work any longer and can live off “the fruit of their labor” in retirement?

That’s the idea right?

What Retirement May Look Like For Many Today In The Information Age

Yet more and more people are finally beginning to realize that although that’s what they may WANT, job security today is an oxymoron, and for most people the definition of retirement is also changing.  Go into any Walmart today and you’ll see some people in their 80’s and even older still working part time – was that part of their financial plan? That’s not being harsh, that’s the truth.  No one works at Walmart in their golden years at low wages just because they want to…

Then there are others where “retirement” now means to them having to drastically cut back their expenses and watch every penny or even having to rely on their kids to take care of them should they not want or be able to continue working.

Still for others it may mean having to go broke, liquidating everything you have to pay for nursing home care so you can hope to maybe someday qualify for Medicare (happened to my grandma).

Then there are those whose retirement plans consist of hoping and preying for a miracle – maybe a government bailout, maybe winning the lottery – and just continue to live day by day, paycheck to paycheck hoping their luck will simply change and things will take care of themselves on their own.

Having been educated on the old 40/40/40 industrial age retirement and benefits plan, I think most people are in still in denial that there’s a crucial problem because that’s the only plan they know, that’s the only plan they thought there was!  So they continue to think about it, desperately trying to hold onto it, trying to salvage whatever they can of this outdated financial plan and so-called retirement strategy that they haven’t taken the time to see where they’re currently headed, the path they’re still traveling down.

Creating WealthIt’s like paddling one direction along a river and not noticing that the current begins to get stronger and stronger.  The sound of the water begins to get louder and louder behind you until you finally look up and realize the current is pulling you quickly downstream in the opposite direction you are paddling, closer and closer to the beginning of the waterfall, ready to consume you. You may be headed toward certain peril but it’s not too late to change course, abandon ship altogether if necessary and get to shore (solid ground, ie, foundation) before you go over the edge and potentially lose everything.

So what is your financial plan going forward and for the future if there is no government or social security income, no pension from an employer, or enough income from your 401(k) or other speculations, er, I mean investments – what is your plan for creating wealth?

Do you have a plan other than hoping and praying for the best?

Hoping and praying…

  • that things will just turn around all on their own?
  • That millions of jobs will somehow just magically appear,
  • that the huge trillion dollar deficits will just go away,
  • that other countries will just forgive us our debt,
  • that they’ll find the $100+ trillion dollars needed to replenish the social security trust fund,
  • that house prices will return to their overinflated levels,
  • that silver, gold, oil along with food and energy prices will go down instead of up?

Or are you using this information, these forming trends, to reassess your situation to make better plans, to obtain the necessary education, to learn the necessary skills, to take the necessary action to ensure a secure, a comfortable, or a rich “retirement” period for you?

Maybe that entails picking up a few books on investing to learn what to do with your money, rather than just turning it over to the old stock broker or mutual fund company (how’s that worked out for you with the stock market at the same levels now as it was at over ten years ago?).

Perhaps that means moving to another city or state to decrease your tax burden or where opportunity for success is more prevalent.

Maybe it means spending some time to develop or enhance some skill-set you know will give you a competitive advantage (like mastering marketing with facebook or building twitter lists).

It could even mean starting your own part-time business around your existing schedule to get in control of your income, and to create leveraged passive cash flow

The choice today for creating wealth is yours…

Choosing to do nothing, choosing NOT to make any changes or to not even look up to see where you’re headed IS a choice. What will be your choice?

(By the way, you can decide to choose a new path, a new financial plan whenever you choose. Creating Wealth – Financial Freedom – begins with a choice…)

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25 Comments

  • I think it’s hard to disagree that the new wave of technology will change how we plan for, and live in retirement. Not only are the new advances opening up new options, they are also creating some great devices to aid us when things go wrong!

    I, for one, am very excited about the progression 🙂

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  • It cannot be understated the importance of planning for retirement. You may have sounded harsh with the walmart example but it was definitely true. No-one really wants to work when they should be enjoying life to the full. Get professional advice and quickly.

  • Thanks for publishing this information on your site.

  • After walking in from the freezing cold, I would have to say retirement looks like someplace warm for me. ;0)

  • Bill@SMSF says:

    Im not sure what the US policy is on superannuation but over here in Australia it is becoming increasingly popular and seen as a pivotal part of a retirement strategy. Even though the 9% from your salary is mandatory, some believe it should be around 15%…

    • Hey Bill, the biggest problem is that most people were never taught how to invest, they never received a financial education. Scholastic, sure. Professional, maybe. But usually not financial, unless they sought it out for themselves. So having funds set aside for retirement is a great start (to invest you must have something TO invest, right?), but most people then just hand their money over to a stock broker or financial planner hoping/expecting/praying that it will increase in value over time. That’s not such a great strategy, as we saw a few years back here when the market took a big tumble (not to mention the costs of increasing inflation, taxes, and the many fees charged by mutual fund companies, etc). Lots of people were wiped out, and lost most if not all of their retirement funds (see video here). A better strategy is to increase your financial education so you can work with your advisors rather than just handing your money over to them. Thanks for your comments Bill!

  • Ben says:

    Hi Hans
    I couldn’t agree with you more. Most people fail to plan their retirement.
    They put money in retirement funds, only to later learn that they cannot really afford to stop working.
    That is why my goal isn’t retirement, but financial freedom.
    All of the best
    Ben

    • Great distinction Ben. Handing over money to a “broker” is not financial intelligence – anyone can do that. I am not suggesting everyone needs to become a day trader or do-it-yourself real estate investor either. I am suggesting people need to take more control of their “investments” and direct how their money is invested more wisely by learning more about the vehicles they are investing in, so they know what do when the market changes and don’t just lose it all thinking that the market always goes up…

  • Gone are the days when people would save and put aside resources for their retirement. We don’t mind spending that last penny or even taking that unjustified loans to fulfil our thrills. You’ve rightly pointed out the need to start planning and saving for those rainy days. So, start planning your retirement and savings, so that, you don’t have to work at one of those Walmarts after your retirement.

    Kevin Rudd

    • Hey Kevin, great point. Life expectancy is increasing and so are expenses. We’ve moved out of the industrial age where everything was guaranteed or provided for you by the government or your employer. Today you must take control and plan for your own future, if you want to have a future!

  • Trevor Barrett@Money Advice says:

    Oh dear Hans, I am not far off retiring age and am not financially prepared for retirement yet. This is the main reason that I have a blog along similar lines to yours.

    I do hope that today’s younger people will not make the same mistakes that I made. Anyway, gone are the days when people used to go to work for a company, stay with them for 40 years and retire with a nice pension.

    Nowadays, we all have to look after ourselves.

    • Hey Trevor, it is unfortunate yet as many others are also finding out first hand, it is the truth. Having a solid financial education and the skills to create wealth are crucial today. Those who take the steps necessary to learn today will be miles ahead of those who may get left behind as things continue to change from the industrial age to the information age. Thanks for stopping by Trevor

  • Peter Fuller MBA says:

    Hey Hans

    You and I think a like 🙂

    Many people are just living life unconsciously, just surviving without taking the time and effort and think about what they are going to do in retirement.

    For many, it is to continue working.

    Good stuff!

    Peter

    • Hey Peter, you’re right. Most people unfortunately do not even take the time to stop, look up and think – could there by another way? It’s unfortunate but that’s what we have been “trained” to do. Hopefully we can help wake some people up before it’s too late! Thanks for your comment.

  • Debbie Lattuga@Creativity says:

    I vote for developing new skill sets. The internet levels the playing field for everyone. People retiring have extensive knowledge in their field of business. This can be harnessed into an information business.

    But this idea needs action at least 10 years before retirement. That is my retirement plan.

    Debbie

  • lilian says:

    My father is already retired but he still can work even do household chores. Retirement doesn’t always mean we have to stop working. I believe that we have to continue some things that helps make our mind active.

  • Lynda says:

    Hans,
    Retirement for me is a long time away, but it’s something I need to consider that’s for sure. I remember my old boss when I was in my early 20’s talking to me about a retirement plan and I laughed at him fast forward 10 years and I am regretting not taking the time to take it a little more seriously back then. Thank you for sharing 🙂

    • Hey Lynda, I know what you mean. 10 years ago it seemed like things would just get better and better – why worry about retirement back then when its 40 years or more away? But times are different today and what would have worked even 10 years ago may not work even today for many people. Our financial future is something we all must think about unless we want it decided for us (not recommended!). Thanks for your comment!

  • Great job of creating some pretty powerful mental images here Hans – and I love the photo you used – perfect! You’ve raised several very important issues and given readers a lot to think about. We all know people who are in denial I’m afraid. I saw what happened to my dad after 45 years on the job – and it wasn’t pretty.