All financial planners talk about the importance of setting goals and planning for retirement. They’ll recommend automating your savings plan with a set and forget monthly deduction. And they’ll share how to supercharge your contributions by optimizing taxes and finding your ‘latte factor.’
I’m ok with all of this but it misses a huge point. The reason most people don’t plan properly and don’t save enough is because saving requires sacrifice. Saving requires forgoing something now in favor of having more of it in the future. That’s not a bad deal but it’s not natural behavior to want to go without and most of us hate it.
Want to improve the quality of your retirement? Improve the quality of your life now.
Saving is of course very important. The sooner you start to get compound interest working for you and build a capital base that is generating cash for you, the sooner and richer you can retire. That’s a fact.
But there’s a better way to look at it than just carving out savings from what you already have. Your best shot at having more in your retirement is to focus on having more now. In fact, it’s your best shot at enjoying a happier life too.
By ‘having more’ I mean earning more money in your job or in your business now. The impact earning more has on your retirement should be obvious. Apart from the increased pension contributions you will automatically make, you should be able to grow your nest egg without making cuts in your current lifestyle. You could decide to save a percentage, say half, of your raise and spend the rest. That’s a win win.
You’ll also be able to allocate these savings to a more results oriented plan, and this is where you can really change your future for the better. You will be able to invest on a timeline that suits you with the flexibility and risk appetite that you decide. Taking control of the asset allocation in your portfolio allows you to optimize your returns in a way that is just not possible with standard pension plans.
Boost your income with this one simple trick
Allow me to give you the dirty little secret to earning more money: increase the size of the hole that will remain if you were to just get up and leave. That’s it. Become indispensable.
I don’t mean obstructing anything or becoming a gatekeeper – that’s more likely to get you sidelined than rewarded – but honestly assess and maximize the impact of what you do. Become a lynchpin for whoever is paying you. Create real value for them – in their eyes, not just yours. Do that, maximize the real dollar value that you are contributing to your organization or your clients and I guarantee you that no smart person will ever let you go for less.
If you’re thinking ‘well I can’t do that because my role is just x’ or ‘nice idea but they can’t afford it’ then congratulations – you now have a strategic plan for becoming wealthier. You either need to expand the size of your role or change the organization.
Go get it!
It’s fine if you can’t see how to do this right now too, but we have so many opportunities in terms of mobility with our jobs, flexibility to work in different ways and indeed opportunities to start new and exciting businesses, and we owe it to ourselves to make the most of what we have. To have a better life and enjoy a richer future you just need to start. Right Now. You know it makes sense to optimize your finances and your retirement, and these things are not organizing themselves. So what are you waiting for?
You might find it interesting as well to visit this post discussing about financial mistakes you can avoid while planning your financials.
I offer free, independent financial advice and would love to help you too. If you have any questions or comments please feel free to reach out to me here or via direct message.
Have a great weekend.