The key to being well off is financial independence, in your mid-life and in your retirement. Accomplishing this before you reach the age of retirement is easier said than done but the goal is to not be reliant on social security or any type of assistance to pay your bills. As someone preparing for retirement, this can be a very scary thought. You have gone your whole life paying into the social security system, so why shouldn’t it be part of your fail-proof retirement plan?
Depending on social security is being dependent on the government
When it comes to financial planning, one of the first things to recognize is that social security is a government run assistance program. To say the program is 100% stable would be providing false security. There are many economists that speculate social security is not maintainable long-term and only time will tell if their predictions are true. Nevertheless, if you use social security to pay your bills you are putting yourself in a dangerous situation. If that money were to suddenly disappear due to a recession or economic disaster, you would not be able to pay your bills.
Thinking positively with a goal insight
To become financially independent, you need direction. You need an overarching goal that keeps you focused and on track, even when there are times of doubt. Your goal can be financial independence but it needs to be one of the strongest desires that you currently have if you plan to be successful. Depending on your age, retirement could be creeping up on you rather quickly.
Under 40? Save 10% of your income. Most financial planners agree saving 10% of your income each month is a good starting place for younger individuals or families. It’s a doable task that gets you comfortable with saving money. This money will start to accumulate and provide reassurance and begin to build your financial independence.
Under 64? Save 20% of your income. Once you pass the age of 40, it becomes even more important to save as much as possible. This is when your investment endeavors may begin to slow down and you can focus on building a cash reserves for retirement.
The most important thing is to always stay positive. A positive mind will reap positive results. Have you ever noticed how people who are successful seem to keep being successful and people who fail seem to keep failing? This is the law of attraction and in large part has to do with their mindset and the way they focus their energy. Thinking positively is the most important step to being in the top 5% who are financially independent.
Investing and building wealth
There is only so much financial planning that can be done before your income in and your expenses out become stagnant. All the planning in the world won’t change those numbers unless you are actively seeking out ways to improve them. Whether you are getting a second job, working overtime, starting a business or investing. These are the ways that people get ahead and begin to build wealth.
It’s important to speak with a financial planner that can assist with your investments. Spending money recklessly on stocks, real estate or other seemingly lucrative investments can seem like a cash cow but it is something to be taken slowly. Unless you are willing to dive in with a significant amount of money, it takes time and knowledge to be successful. Don’t rush your investments but understand the time constraints you are under for retirement and your financial goals.
If you have questions on financial planning and how to be in the top 5% who are financially independent, please contact us.