Would it not be a nice feeling to
imagine that even when you are not in job (retired) or not so active (if self
employed professional) that you are enjoying same standard of living and
comforts of life which you can afford when at the peak of your career.
Well it need not be a wishful
thinking anymore. Believe you me you can retire a wealthy man if you decide to
take action from this moment onward and work systematically towards your goal.
There is not much difference between a few people who retire rich and wealthy
on one side and on the other side many people who retire with a limited amount
of corpus (mostly savings, retirement bonus etc.). It hardly needs to be
emphasized that good things don’t happen by accident. Therefore, there is a
systematic planning and execution of the same to keep one’s life comfortable
and without the worry of money or of the need of cutting on spending.
Here are a few simple but effective
steps you need to work on:
Save
Money Regularly
Saving money is much easier than you think! In simple terms
it is spending less than what you earn. Many financial planners and investment
advisers recommend a certain percentage which you should save from your salary
or professional income every month. But it may not be possible to follow
exactly as prescribed, because your income, needs, responsibilities and
lifestyle is unique and cannot be generalized.
Some golden rules regarding saving money
Save Money Early – Retire Wealthy
Start Saving
Money Early
Ideally you should start saving from your first job itself.
Resist the temptation to buy everything you have wanted to buy all these years.
Go slow, don’t be impulsive and plan your purchases. The advantages of starting
savings early in your career are that you may form a bigger corpus when you
retire compared to a late start of savings. Of course, this may mean
sacrificing some of the comforts. Let’s say you’re 24 years old and can manage
to put away only $100 a month into your savings cum investment fund. Assuming
that you manage to earn an average of 8 percent on your savings and
investments, you’ll be at about – $463,000 approximately – by age 69.
Interestingly, you only have to save and invest only $54,000 over that 45-year
period! Also it is quite possible that as the progresses, you shall keep aside
bigger amount every month and you may even retire with one million dollars.
If you start
late, make up for lost time
Maybe for some reason or the other you could not start your
savings in 20s or even in 30s, don’t give up. You can keep aside a bigger some
every month for your retirement fund to catch-up. Of course, it would mean
creating a budgetary plan and following it seriously. In fact, whenever you
earn some unexpected income, don’t blow it up. Rather let it go to your
retirement account.
Earn extra
Let us go back to the simple mathematical equation Income –
Spending = Savings. There is a clear message in this. Just cutting down on the
expenditure is not the only solution to increasing your savings.
That means you have to look for ways to increase your
income. Don’t just keep yourself glued to that job or a single income. You need
to maximize your earnings potential.
In case you cannot find an opportunity with your existing
qualifications then go grab some skills which let you earn some extra cash such
as online marketing, website designing, online teaching which you can do from
the comfort of your home and after hours too.
Find a higher
paying career
Suppose you are unhappy with your present job or think that
your earning potential is much more then pick up an additional qualification or
hone your skill sets by taking an additional training. After equipping yourself
with additional degree or skill or qualification, you may go in for a change of
job and / or change of career line – where you are paid a better salary.
However, keep in mind that regardless of which option you
choose, don’t go in for something very fancy or expensive which makes you get
into debt trap.
Invest Wisely
In case your style is more
aggressive and you consider yourself to be more ambitious then are here are a
few more time tested suggestions to retire with a bigger corpus of funds and a
good regular income for life time:
Invest in Real
Estate
The general rule is that everything can be produced in a
factory except the land. With the every passing day, the demand for land
increases, whereas the supply is either stagnant or limited. Hence over a period
of time, the price per unit of land increases and so does the cost of real
estate or the property.
In other words, the price you may pay for the purchase of
property will increase many times over after a decade or two or three. The
graph will always move upwards. But there could be seasonal variations due to
many factors – economic, political, infrastructure related. Also there are
bound to be some regular cycles of boom and recession. It is these cycles which
you need to understand well. Recognize the recession period when you can buy a
home or office or a piece of land cheap.
Logically, you should live in your first property (unless you are in some other town or are living in an accommodation provided by your employers) and subsequent properties should be rented out.
Logically, you should live in your first property (unless you are in some other town or are living in an accommodation provided by your employers) and subsequent properties should be rented out.
This option should give you regular extra income as well as
an appreciation to your investment letting you to retire wealthy.
Stay informed
about your investments
Keep a tab on all your investments. Periodically, assess and
evaluate how each investment is doing. Keep yourself informed of your
political-social-economic-financial indicators which may affect directly or
indirectly. In case you find that a particular investment in not performing
well then switch to something better before it is too late!
Don’t put all
your eggs in one basket
Of course, you are not such a dumb investor. But sometimes,
a hectic schedule or a sweet talking investment adviser or procrastination
habit may land you in such a situation. So let this act as a reminder and be a
smart investor instead! Research thoroughly the available investment options
and the financial instruments.
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