Have you heard of people who retired from their jobs and ended up broke years later. Some work their whole lives to be able to Retire or Retire Early with a healthy 401K account and end up burning through their money in just years. Then they end up going back to work to help pay the bills.
Ken Fisher wrote the book called “The Ten Roads to Riches Second Edition”. It is a good read and has a story in the book about Curtis James Jackson III (aka 50 cent) who is a famous rapper that you probably heard about. Curtis did good early on building up many businesses and investing in a lot of business. One of his companies he invested in was Glaceau which was bought by Coca-Cola in 2007. After that sale it raised his net worth to almost $500 million But in 2015 he filed for bankruptcy. That is crazy.
Over the years I have heard of many Athletics, Singers to Actors that made a lot of money early on in their career by ended up also filing bankruptcy. I enjoy watching golf on TV but think it is crazy when a young PGA golfer wins a tournament and goes out and buys a huge 5 to 10 million dollar house. A big house takes a lot of help to keep the yard looking good, keep it clean and to fill it full of furniture. There are many golfers that may win a tournament early on and never win again. Same with a movie star could be in a big movie and never be in another one again. If they don’t save their money early on and live within a budget there is a good chance they won’t have much money at retirement time or file bankruptcy also.
So many people I have met or worked with on their situations doesn’t have a good idea of where their money goes or how to make their money last when they retire someday. They look at their checkbook balance (if they balance it) and once the balance gets low they spend less money till they get their next paycheck. Is that you? Also they may put money into their work 401k which is good but they don’t always max it out and think that money plus Social Security will fund their retirement account.
When they retire they have more time on their hands to do more fun things which normally costs money. Where does the money come from to pay for their extra costs? I am a true believer in having a great handle on your expenses monthly and doing a home P&L. Also to have budgets and projections for the rest of your life. The stock company I am with has good tools I can use to do projections based off our current assets and projected expenses. The tools give us odds on our money lasting till we are 100. Some project till age 80, 90 or any age they feel comfortable with. My Financial Planner wants us to project till age 94. Everyone is different. My family tree doesn’t show longevity for me. If I make 85 it will be a longshot.
Some people when they live just by their checkbook they increase their debt or take out loans against their house or retirement account. As you in increase your Credit Card debt or take out more loans it just starts an ugly snowball effect and possibly gets worse and worse by the month. Some people say they don’t want to save money, or track expenses because they want to enjoy life while they are you. You can have fun doing many free things or low cost things instead of going to Concerts, Happy Hours, Eating out many times a month or fancy trips. Do you really need a new fancy car or a huge house? There are so many questions I could ask. I have seen so many bad spending habits of families over the years.
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How do you keep up on your spending? Do you have a budget? Do you project out your retirement expenses and income? If you need help with doing a budget email me or seek out a Financial planner. So many of my past clients or people I have met said they thought they would work till the day they die. Why not take control today of your expenses and savings so you can have a chance to retire early or retire someday. It is a lot less stress for us to know where we are at on our expenses each month and year. We know what months are big expenses are going to hit like Taxes or Insurance and save money each month for those expense.
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Bruce of MillsWay.com