How is it that some people can retire at 40? Why are some people able to earn high incomes or have multiple sources of income? How come some people retire to a life of luxury and world travel, while others barely have enough to feed and house themselves?
Of course, part of the answer is that some people are more intelligent and industrious than others. Nonetheless, we are not all the same. We may have been created equal, but no one has ever guaranteed us equality of results. That depends on our own efforts. Another part of the answer is that some people consider the risks they will face and do something about them before they happen. Buying insurance to protect our home, health and life is a good example of this.
Yet another part of the answer is having a plan. People who plan learn about investments and how to diversify so that when one asset goes down, another holds its own or goes up. As an alternative, they might hire financial specialists to do the work for them. These same people also save as much money as possible and live well within their means. They will use credit judiciously or not at all.
Saving money is the basis of building your financial future. However, many are putting it off one more day. Those days turn quickly into years of lost money. Without savings, the chances of meeting long-term financial goals and achieving financial security are quite small. In order to save money, you have to control your finances. Saving has nothing to do with how much you make. It has everything to do with how much you keep. If you have lots of debt and live paycheck to paycheck, you won’t be able to save any money. You are not saving for the future either. In order to save, you have to start spending less by living within or below your means.
People who have savings are more likely to invest in businesses, real estate or work part time while maintaining their full time job just so that they have many streams of income. If one is lost, the other sources can temporarily pick up the slack. The internet now makes it easy to set up an online business while you continue with your day job.
The bottom line is you have to rely on yourself to earn and save as much as possible. If you do, you can be one of the lucky ones who retire young with lots of money to spend. If you don’t, you’ll be living hand to mouth on your Social Security check. The choice is yours.
So, how about you? What’s your financial game plan?
