Where do you want to be? In a few years? In 20 years? The future is a funny thing. We are simultaneously on the way to it while preparing for it. And if you don’t watch out, we spend so much time in the preparation, we forget to enjoy the little things along the way. Today we are going to talk about retiring. I’m going to share with you how to plan for your later years with on-going income and enjoyable activity levels. I’m also going to address those of you who think it’s too late – you are destined to spend your older years pinching pennies. And I’m also going to tell you why discontinuing all work a bad idea, in my opinion. No discussion of the future is complete without a consideration of the present. If you are unhappy now, it’s unlikely you will be magically happy then. If you are frustrated or bored with your life now, it’s very likely this will continue. The answer is NOT in a change of circumstances someday. The answer is in changing your mind TOday.
We must learn to enjoy the meaningful moments of this life as they threaten to pass you by. And pass you by they will. You can never hold on to the moment, but time is a force that marches on. Physicists tell us there are four primary forces in nature, gravity, electromagnetism, weak nuclear and strong nuclear. But TIME is a stronger force than all of them. We have found ways to experiment, modify and overcome the four physical forces, but we have never (and I think WILL never) learned to overcome time – to stop it, slow it, travel backward in it, accelerate forward in it. Time marches on. The moments continue to pass no matter how much we cling to them. New time is constantly being created at the same pace regardless of our yearning to more quickly get through certain phases in our lives.
A discussion of the afterlife or even previous lives for that matter is WAAAAY outside the scope of this show, but one thing we can all agree on: We have this life. And we have choices about what to do with it. Some of those choices may no doubt be influenced by whatever you believe about what comes next. But it is a choice nonetheless.
So let’s make some good choices. They won’t be the same for all people but they can all be good, wise, prudent, and effective. We just have to start making them.
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- We are not going to create a full retirement plan for you in 20 minutes or so. The topic deserves a more complete discussion with your financial and tax advisors. What I hope to do here is simply lay out some of the principles for your consideration.
- I’m not giving advice. I’m teaching principles. Each person’s situation and circumstances will be different so you will need to consult with a professional who is familiar with your life and agree on the specifics of a plan.
Let’s first spend a few minutes on the PRESENT:
You have two eyes. Using this as a metaphor, Your life balance will be found by keeping one eye on the future and the other eye on the present. Notice you do not have a third eye with which you can dwell on the past. What is past is done. It can’t be changed. Some of you will say, “but what about the mistakes I made?” There were lessons learned that should be a part of your present. If you continue to dwell on the mistakes of the past you have not yet distilled the lessons from them. Figure it out, close that chapter and move on. Some will say “but what about the injustice done to me?” This is a surefire way to live a miserable existence. The injustices done to you are also in the past. They cannot be changed. The only thing you can control is your response to them. And they ONLY healing that can move your life in a positive direction is forgiveness.
“But what they did was horrible.”
“But what they did was unforgiveable.”
“But what they did was….”
It’s not easy. It’s not emotional. It’s not even fully logical. It’s just simply necessary.
“Well I tried to forgive, but it didn’t really work.”
Here’s a little secret. Forgive over and over again. Remind yourself daily, hourly, however long it takes for as long as you continue to remember their deeds against them. As surely as time marches on, in time the pain will subside a little each passing day until the forgiveness you have declared becomes a reality in your soul.
The only more certain happiness trap you can enter is to live inside past injustice done to someone else by a third party. Allow yourself into this mental mindset and escape will be difficult.
So one eye on the present includes the accumulation of life lessons, fading memories of difficult forgivenesses, and a steadfast focus on joy. We can do multiple episodes of this show just talking about the pursuit of happiness, but since the show’s theme is real estate and entrepreneurship we will limit ourselves to a briefer treatment.
Much of our life is spent in pursuit. Pursuit of pleasure, pursuit of money, pursuit of power, pursuit of fame, pursuit of legacy. There is nothing inherently wrong with inner drive. Without it we would be lifeless aimless blobs. And there is nothing inherently wrong with the natural progression in our pursuits. Although one could study the wisdom literature from an early age and realize that many, if not most of the priorities people have in their lives are pointless, it seems that we all must, to some degree, learn these things first-hand. While on this journey, you will do well to consider the things that bring true satisfaction, meaning, and enjoyment into your life. And while we all need enough money to live and eat, we all realize sooner or later that money isn’t everything. The flashy lifestyle many crave reflects a lack of self-confidence, a lack or maturity, or both. And I know the saying, “money can’t buy you happiness but I’d rather be miserable in a Mercedes than a Chevy.” What I’m saying here is money is fine. Nothing wrong with it. But when it becomes the love of your life, problems ensue. Figure out what truly brings meaning to life. Read books by older people on the subject. Study the wisdom literature. For example, read and understand the Book of Ecclesiastes in the Bible. I know it will seem strange and somewhat depressing at first glance. It is translated from ancient poetry, so it’s not going to read like your favorite novel. Keep reading.
What you are going to learn sooner or later is true life satisfaction comes from:
Basic needs fulfilled
Make these the basics of your life pursuits and you are on the way to joy. Choose a different path and, well, I’ll see you again in a few years when you realize I’m right. And hey, I didn’t discover this. I’m just sharing with you the wisdom of a thousand generations. Take the word of millions of people who have gone before, or go on and figure it out for yourself. You get to choose.
- Imagine your life
- Start at the end and work backwards. Family, legacy, impact, charities, etc.
- Don’t be too concerned with the details. If you want to make God laugh, just tell him your plans. There are going to be twists and turns. And this destination you imagine may not be the most important plot element to your story.
- What will your lifestyle cost?
- Start with the best case scenario. Where do you live? Or do you envision kind of a snowbird lifestyle? Are you taking other vacations? Travelling? RV-ing?
- Assume an 8% return on your investments. How much do you need to have invested in order to afford that lifestyle?
- Start at the end and work backwards. Family, legacy, impact, charities, etc.
- Let’s do the math. Suppose you would like to end up making $10,000 per month. That plus the pittance known as social security should keep you alive and ticking right? If your home is paid for, your taxes are relatively low, this should afford you a reasonable lifestyle. That’s $120,000 per year. Divide that by .08 and voila, you need to have $1,500,000 invested. Man THAT sounds like a lot. If I saved $10,000 per year I would have to save for 150 years!
- Real estate to the rescue. Buy 10 houses that end up being worth 1.5m. You can use debt to buy them. Allow for inflation so start out buying houses for $80,000. Rent should be $800. In ten years the house (3% appreciation) is worth more than $100,000.
- You get the idea. Your tenants pay down the mortgage. The value is increasing. Rents rise slightly. This is a solid plan to get there.
But I’m already in my 50’s. I don’t have time to buy 10 houses and accumulate.
What do you have?
Get a better return.
Flip properties on the side, NOT to enhance lifestyle but to put into income-producing properties.
Get into multi-family. Syndication.
Multiple passive income streams
$1m, 8%, 80,000
$40m, 8% 3.2m
Income from business cash flows, 2m
Never Stop Working
Not a mandate.
Not a law
Stop working, start shriveling
Slow down, yes, enjoy the fruits of your labors and your wisdom, yes more than earlier. Stop? Never.
What Is LTV and Why Does it Matter? https://loans.usnews.com/what-is-ltv-and-why-does-it-matter
Redfin: The average 2012 homebuyer is now sitting on $141,000 in home equity
Sotheby’s AR App Lets Buyers Purchase Furniture, Too https://magazine.realtor/daily-news/2019/09/30/sotheby-s-ar-app-lets-buyers-purchase-furniture-too
WeWork Concerns Seeping Into Singapore’s Real Estate Sector https://www.bloomberg.com/news/articles/2019-10-02/wework-concerns-are-seeping-into-singapore-s-real-estate-sector
Comment Line calls and Questions
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Motivational Thoughts for the day
- “If you do what you always did, you will get what you always got.” –Anonymous
Expected Air Date: Thursday 10/9/19