Stephen Covey, the famed author of “The Seven Habits of Highly Successful People” talks about the importance of examining what your end goal or desired outcome is first, and then work backwards from there.
When it comes to planning for retirement, we tend to bury our heads in the sand and avoid facing this important issue.
According to US government statistics, at age 65 only 5% of Americans are financially independent or secure at retirement. That means that 95% are reliant on family or Social Security , or working till death, or dead. The grim reality of enduring financial struggle and or endless work is not very appealing.
The odds of enjoying financial stability in retirement are even longer absent a well thought out, coherent retirement plan.
The ideal retirement plan will map out the appropriate strategy for investing in the correct types of assets in the optimal way to earn passive recession-proof cash flow so you can stop working, replace your working income with passive income and enjoy your retirement the way you want.
There are six keys to consider when constructing a useful, effective plan. These questions are very useful in virtually any aspect of your life.
Why must you win? motivation, personal values, conviction
Where can you win? asset classes, business or industry niche
What will it take to win?strategy
How will you win?tactics
What will you use to win?services
What must you do to win?daily practice, routines, techniques
Let’s attempt to fill in some blanks.
Motivation: You want to buy back your freedom. You want to be able to stop working and enjoy life. You want to have a low-stress retirement. You want to maintain your standard of living and help your children too. You want a life of prosperity and to be able to live without worrying about money. We are driven by our values. Your beliefs, values and even your spiritual aspect are important elements that serve as the foundation of any motivation. The inner desire and the strength of your convictions will be the primary determinant of your success.
Asset class: In order to be truly financially free, you have to earn passive income that meet or exceeds your living expenses. An examination of alternative investments will include real estate, notes, oil and gas partnerships, annuities, private lending etc.
Strategy: It is impossible to create a retirement plan based on speculative investing without taking significant risk and tolerating a lot uncertainty. Speculation in stocks, bonds and commodities is popular and the standard practice of most investors. A better, lower risk approach to retirement involves seeking commercial real estate investment opportunities, especially ones with seller financing. A superior plan is recession proof, inflation proof and even technology proof. Be sure to leverage knowledge, contacts and money.
Tactics: Invest in mobile home parks, apartments, self-storage and the like, commercial real estate that you can improve and enhance. Seek out off-market properties with seller financing. Deals like these are very rare, but they do exist. Focus on assets that produce income NOW, not speculative assets that do not earn current income.
Services: Find experts in the types of investments you are interested in. Talk to a mobile home park expert. Locate an apartment expert, etc. Try to find experts who have had ownership experience. Don’t settle for brokers and salesmen only. Combat experience is always valuable. Do business with professionals who can offer you deal flow. The most successful investors are the ones with lots of deal flow. Build relationships and network with others so that you can enhance your ability to have greater deal flow.
Routines/daily practice/techniques: Commit to investing in assets that produce income now and reduce speculation in your portfolio. Learn all you can about alternative investments. Research blogs, listen to podcasts, attend seminars and take action to replace your working income. The sooner you implement your plan, the sooner you will achieve your dreams.
Nothing will change without action.
We are now faced with the fact that tomorrow is today.
We are confronted with the fierce urgency of now.
In this unfolding conundrum of life and history there is such a thing as being too late.
Procrastination is still the thief of time.
Life often leaves us standing bare, naked and dejected with a lost opportunity.
The “tide in the affairs of men” does not remain at the flood; it ebbs.
We may cry out desperately for time to pause in her passage, but time is deaf to every plea and rushes on.
Over the bleached bones and jumbled residue of numerous civilizations are written the pathetic words:
In Investment Advice, Smart Investing, The Average Investor, Retirement Tags Stephe, Retirement, Retiring Boomers, Retirement Planning, Financial Freedom, Social Security, Financial Literacy, Motivation, Assets, Asset Class, Strategy, Tactics, Services, MLK