This week, I am talking about the theme “Real solutions for real problems.” I have already gone over too much bad debt and low income/high expenses. Today, let me consider a topic that I get asked about very often – what to do if you are prepared to retire.
It’s easy to feel overwhelmed anytime you think about retiring – especially with all the attention being given to having a “number”. Well, let me be the first to tell you that saving up a huge pile of cash and hoping to outlive it is the worst idea ever, and one that is completely unattainable for most people. Instead, let me recommend the following steps for retirement planning:
1) Set your monthly number
2) Choose which assets you will invest in
3) Buy up enough assets until the cash flow equals your number
1) Set your monthly number. I love this Yogi Berra quote: “If you don’t know where you are going, you’ll end up someplace else.” You need a defined destination. How much money will you need coming in per month to live your ideal lifestyle? I’m talking living expenses, travel, hobbies, charity, the whole works. $5,000 per month? $10,000 per month? $20,000 per month? Find that number, and in doing so you will have decided what your endgame is. You will have defined your destination.
2) Choose which assets you will invest in. Will you focus on rental properties, small business, dividend stocks, marketing, eBooks? How much can each asset provide (forever)
3) Buy up enough assets until the cash flow equals your number. Once you have decided which assets will provide the cash flow you need, calculate how many you will need to live your ideal lifestyle from now all the way to retirement and beyond. Once you have done that, it’s just a matter of buying one Forever Cash asset after another until you get there, using the cash flow from previous assets to buy future ones.
Does it sound simple? THAT’S BECAUSE IT IS.
Thinking about retirement can be terrifying – but it doesn’t have to be. Follow these steps and start taking action TODAY!