“I’m Waiting To Retire So I Can Enjoy Financial Freedom, The Biggest Lie By The Masses.”

Early in life, you’re taught that you should go to college, get a good paying job, get married, buy a house, start a family, make even more money, buy an even bigger house, send your kids to college and then miraculously, financial freedom will happen at exactly age 60 when you retire. Then after you retire, you’ll have an abundance of time for “financial freedom” type activities and all will be right with the world. That’s the dream of the masses, right?

Unfortunately, what people are finding is that the path defined above doesn’t lead to financial freedom. That path leads to unending debt. It leads to a lack of retirement savings. It leads to financial frustration.

When you eventually come to that realization, you rationalize and say, “Well, I’ll just work beyond age 60 until I clean up this mess and actually can retire.”

I remember, a friends father telling us “I have 4 years to retire but I think I will have to work for another 6 years in order to pay down my house loan.” You see?

Most people don’t want to retire simply because they are in financial mess and not because they enjoy the corporate environment.

If your goal is to work and retire at age 60. If you want to just follow the rules that has been laid down. Thus, go to school, get yourself a good paying job, buy a house, marry and have kids…etc, which after interacting with most of my friends and colleagues, I know is the dream of many today, makes sense. Yes, it makes sense if your dream is to be selfish in life. Keep all you have to yourself and your family.

But the problem you don’t know with that is many of you won’t be able to enjoy freedom, even if you want to. You will end up frustrated and in a serious financial hot water.

I want you to think differently from the masses, I want you to think this way; I will go to school, get myself a good paying job but I will do whatever it takes to master the game of money. I will be financially literate. I will build my financial foundation by embarking on a journey to financial freedom.

Therefore, what I want you to do is “you need to stop thinking that retirement equals financial freedom and start planning towards retirement now.”

How do you plan towards retirement and achieve financial freedom;

Spend less than you earn

While it might sound obvious, one of the first rules you should adopt is around your spending habits. Yes, it’s cliche, however you can’t out-earn poor spending habits. If you are earning a million dollars a year and spending $1.1M, you will still go broke. Set aside something every month for the future. The future you will thank you.

Take advantage of employment retirement plans 

If you’re employed at a company with retirement benefits, lean into the options offered to you at your job. To be rich by retirement, you need to take advantage of your employer’s retirement plans. But most importantly, ensure you are contributing enough to get any employer’s matching contributions to set yourself up for success.

Diversify your investments 

When it comes to planning for retirement, it never occurred to me that there were many different investment options. To be wealthy by retirement age, you have to diversify your investments.

There are so many diversified mutual funds and ETFs these days, there is no excuse for not being diversified. Diversify amongst companies and also countries, make sure at least a portion of your investments are international-based.

But by far the most important diversification comes from not having most of your money in a single company. This is a terrible idea when it comes to retirement investing. The money one puts into a single company should be money a person can afford to lose.

Ignore the financial circus

When you’re on the quest to build your net worth and long-term wealth, it’s important to filter out advice that might sound too good to be true.

Tried and true advice based on academic principles doesn’t make the news, it’s boring, but it works.

Keep your investments simple and stick with stuff that has a proven track record. It’s really hard not to build wealth that way over time. Getting rich for sure is better than wanting to get rich quick.

Take a different approach when you’re young

If you start out your retirement financial planning in your 20s, or 30s, taking a different approach could yield good results. When you’re young, invest nearly 100% of your retirement money in stocks. Take advantage of being young and having a long time horizon before you need your retirement funds.

Stocks can be risky investments for older workers, but the market will bounce back if the portfolio has a long time horizon.

Stocks have always out performed bonds over long enough periods. There has never been a 20-year period where stocks have underperformed bonds in many countries.

Secure your retirement future by taking sound decisions and actions today. Your tomorrow is dependent on your decisions and actions today. Be in charge!!!

Register for my upcoming Money Mastery Program: Masterclass Session on IDEAS CAMP.