Early to rise...
It's 6 AM and John is unlocking the door at McDonalds. None of the other employees have arrived but he's not surprised. Kids today just don't have the same work ethic that his generation did. John, you see is 73 years old. He sometimes wonders why he still has to do this at his age. There just seems to too much month left at the end of his money. Lately his left knee has been bothering him, and he worries about what he'll do when he can't work anymore.
John's story isn't unusual. We've all seen John, or someone just like him, plugging along when others his age are happily retired. What happened? How did John end up here?
The choices we all make when we're young many times will follow us for as long as we live. I have written a book entitled "The Road to Wealth" that is designed to guide the conscientious person to financial independence. I believe that the principles found in this book are designed to help take you to a successful retirement.
Conversely, there are many things that you can do that will all but guarantee financial hardship down the road. Here's my top 4.
Don't set out to fail
If there were certain things that you could do that would certainly bring hardship and distress to your financial planning, and you knew what those things were, you would surely avoid those things, wouldn't you?
Good...I'm glad you agree with me. (If not visit Despair.com)
So here we go.....the big 4 are:
4. Employment Gaps
Have you ever known anyone who just couldn't seem to keep a job? One of the best things a person can do is to start working at a young age, and keep working steadily until retirement (consider the ant). Does that mean you have to stay in the same job forever? No, absolutely not, but you should never leave one position until you have another one firmly in your grasp. Take every opportunity to improve yourself, but keep working, as much as possible.
3. Excessive Debt
Too much debt is a killer. If you have a credit card that charges you 9% interest and you are making minimum payments, you'll be working for a long time to retire that debt. Not only that, but your investment portfolio will have to earn more than 9% to just break even. In todays environment that may be a tall order. Debt is a thief that steals from your future. Make every effort to reduce the amount of indebtedness that you have, and eventually eliminate it.
2. Risk Management
Everyone, in the course of life, will have bad things happen to them. Cars break down. Workers get laid off. An accident or lengthy sickness may keep you from working for an extended period of time. As the breadwinner in your family, what would happen to those you leave behind if you were no longer in the picture? These are serious issues that must be considered, and dealt with through the proper applications of insurance solutions.
and finally, the number one reason for financial failure....
1. No Plan (or Procrastination)
In the beginning of this post I wrote of the fellow who is working at a fast food restaurant at age 73. This situation is quite typical of a person who has never had a financial plan at all. We all mean well, but sometimes we just fail to see the importance of things. Many times we are so busy dealing with the daily struggles of living that we never deal with the truly important stuff- I call this the "Tyranny of the Urgent." Or, just as bad as never developing a financial plan, is procrastinating in implementing that plan. If I had $10 for every person who has said to me, "I need to come and see you about my finances" but then never followed up, I could have retired a long time ago.
Make a Plan and Stick to It
Your future is on the line. The four mistakes outlined above are not the only mistakes you might make, just the biggest and most common.
My hope is that you'll see the importance of putting a plan in place, the younger you are when you do it the better, and then sticking to it. Financial independence can be yours if you will only do this (See also "Living a Successful Retirement").
Of course, utilizing a good fiduciary level financial professional to assist you should increase your chances of success, and lead to better results. If you agree, feel free to give me a shout, and I'd be happy to help you draw up your plan, and then implement and monitor it.
Until next time,
Are you a serious investor? Like to keep up with what's happening on Wall Street. Take a look at our commentary on what's happening in the market. Delivered weekly to your in-box!