One of the most important things that will happen in your life is your retirement. So it is imperative to think ahead of what you will do to be prepared for it. I’ve encountered a large number of people as a banker/financial officer (once upon a time I was), that are retired and had to live in poverty. Trust me, you do not want this to happen to you. For some people, I don’t know how they were able to pay their bills. To prevent this, I’ve written up to 5 things to help you be successful in this area of your life.
The truth is although there are a lot of people suffering and living in poverty during retirement, there are a lot of people enjoying themselves as well. I lived in a retirement community, a small city called Sebring in Central Florida (population of 100,000). There were a bunch of shops, lakes, golf courses, and retirement communities that have recreation halls. You must and have to be able to live this way, if not better. You should look at it as your obligation!
What’s the #1 Best Way to Save for Retirement?
Start an online business, which will bring you in passive income for years to come. How do you do this? You build a website and monetize it, such as with affiliate marketing. In affiliate marketing you choose the products you want to promote, choose from literally millions. Take Amazon for example, they’re the largest marketplace on the internet, selling millions of products, and they have an affiliate program.
I wrote a blog that discusses all the ins and outs of affiliate marketing here.
How do you get started? It’s quite simple. You choose an interest, build a website, drive traffic, and then generate revenue. There is a website that will teach you how to do this step by step. Best of all they have a free membership that gives you access to the beginners course. I know, I know, nothing’s free in this world, but seriously, keep your credit card in your wallet, there’s no charge to join. 🙂
The website is called Wealthy Affiliate, and I believe you will love being a member there. There are 100,000s of like-minded people inside at your disposal. Some are experts, intermediate, and newbies, all training, learning, and offering help. I’m also an active member there, so I can help you out along the way as well.
2. Build a Retirement Account or Your 401k
I don’t think that I have to tell you the importance about having a 401k, nor about the benefits. I’m sure you all know how they work. However, I will tell you this, a couple of wealthy retirees told me once, when I was a banker, the only way to live a better life when retired was by saving 20% to your 401k. They told me, “Jonathan, no matter what you have to do, cut back on expenses, or live below your means, but you have to do this.”
I know how important this is, and how much it makes sense because like I mentioned earlier, I’ve seen so many people living in poverty during their retirement. It’s so sad. If you don’t have access to a 401k, you can open a Retirement Account at just about any bank I can think of. Ideally, you would automatically set the transfer to take out the allotted amount and transfer it every time you get paid. If you can’t do 20%, don’t stress it, just do as much as you can.
3. Don’t Invest Your Money, Or Little to No Risk
I’m sure you’ve heard of rumors about people investing their monies into financial portfolios. I would totally recommend against this. As a banker, I’ve seen some people take major losses in this area. Plus the art of investments is all too confusing. If you didn’t know, investments tend to pay back largely in the long run. I’m talking about years, such as 5-20, targeting 20.
I’m not a financial advisor, just someone who worked in the bank, but you need to be careful who you speak to about investments, and also who you take advice from. As you know, the financial advisor has to make a living, and they get paid on how much you invest. Not how much you lose or gain.
I tend to follow some rich and successful people on the regular, and the best advice I’ve ever received was, “Don’t invest, unless you’re taking little to no risk! Also, look to triple or quadruple your investment, not just to get your money back and then some. Don’t think about or worry about investing unless you’ve got like $100k to blow.”
4. How to Save Money From Debts
One of the best ways I’ve found when it comes to saving my money is saving the money I was originally going to pay out. What do I mean by this? I had this personal debt which I was paying, and it was around $600/month. Well long story short, I no longer had to pay this debt anymore, but I decided to keep saving that monthly amount. I was able to save more than $3,600 within six months this way.
This is a similar method that I learned from Primerica. A lot of people finish paying a debt, and then take on another debt to replace it. Wouldn’t it be better to save the money instead of spending it? Plus it’s so hard to live below your means, but this method will allow you to be disciplined in doing so. You can do it with however many debts you have. Don’t keep adding to your means of living, but start saving it.
5. Build Your Credit
You probably know this already, but credit is really important, not only during retirement but in life period. Most importantly though, you don’t want to be in debt, or have bad credit while you’re retired. What if you need to purchase a new vehicle, or a new home? Or if you live in “Sebring”, where I was, what if you want to buy a new golf cart, or a boat? Or nonetheless repair one of these things? While you’re in retirement you don’t want the headache of not being able to manage one of these expenses.
Pay off all of your debts if you haven’t done so already. I don’t care what you have to do, find a way. When I was in my early 20s, I had more than $10,000 in debt, so I moved in with my parents, and within 8 months I paid it all off. Needless to say, I moved out after that. Doing this will surely help you build or maintain good credit. Along with always paying your bills on time, using credit cards wisely, and don’t take on unnecessary debts. Just don’t… you were fine before you had whatever it is that you want; pay cash if you want it so bad.
I hope I helped you with some creative ways to save for your retirement. Don’t forget about me when your playing golf on the golf course, or cruising around in your golf cart. What are some more ways that others could save for their retirement?