|
by: Kalinda Stevenson
After reading many articles about retirement, I have come
to the conclusion that most of the financial advice addressed
to consumers is bad advice. From the perspective of conventional
wisdom, the advice makes sense. The problem is that conventional
wisdom is not very wise because it is based on a limited understanding
of money.
The essence of much financial advice about retirement is
that people have not saved enough money. Experts warn that
prices will go up and up. You will probably need more for
medical expenses as you age. And worst of all, you might live
20-30 years after retirement at age 65 and will probably outlive
your money.
Retirement articles usually explain all the ways you can
calculate how much money you will need, what costs will go
up and what costs might go down. (They assume that you will
pay off your mortgage.) They also assume that your own sources
of money will be retirement funds, pensions, and Social Security.
Every single one of these money fears is based on a single
assumption. After you retire from your job, you won't earn
any more money. This is one of the biggest money limitations
imaginable.
You must anticipate an uncertain future in which the money
available to you is limited by the amount of money you amassed
in your earning years.
A related assumption is that the amount of money you have
available to you in retirement also depends on the decisions
of other people. Other people will decide whether or not you
still have a pension, whether or not you still have Social
Security income, the amount of interest you earn on your "safe"
savings accounts and CDs, and the returns on your mutual funds.
Such financial advice is based on fear. Your only security
is to amass as much money as you can while you are still earning
an income, and then use it very carefully before it is all
gone. You really can't depend on these other sources of additional
income. In other words, you are essentially powerless to increase
your wealth after you retire from your job.
There is another way to approach retirement planning based
on a different assumption. The fact that you retire from a
job does not mean that you retire from the capacity to make
money. The fundamental difference is that you continue to
make money in retirement and that you take an active role
in creating new money.
Fundamentally, it comes down to the difference between earning
money and making money.
"Making money" is not the same as "earning
money." Making money is a skill that very few of us ever
learned as wage and salary earners. When you "make money,"
you increase the amount of money available by selling something
at a profit, not because you get more in your pension or Social
Security or from the pitiful interest that the bank might
pay you on your savings or CDs.
We live in an entrepreneurial age. People who have businesses
understand that money is not only a commodity to be earned
and then used up. Money is also a product you can create.
There are so many ways that people retired from their jobs
can create more money. They can produce products, invest in
real estate, trade Forex currencies, trade in the stock market,
write books, do consulting and coaching, and a thousand other
methods to make money.
When you know the difference between making money and earning
money, you won't have to fear a future limited the amount
of money you already have in savings accounts, IRAs, and pensions.
And you don't have worry about outliving your money. It all
comes down to knowing how to create money. You will either
face a future of money limits or you will understand that
you can continue to make money during all of those wonderful
20-30 years you live past your job.
Copyright 2006 Debt or Alive, Inc
About The Author
Kalinda Rose Stevenson, Ph.D.
Author of "No Money Limits For Real Estate Investors:
Discover The Money-Making Secret In The Monopoly Game That
Will Turn Your Money Struggles Into Money Abundance
http://www.nomoneylimits.com/
kalinda@nomoneylimits.com
|
