Retirement or Financial Freedom?
In the past most people never retired. They died. The average life expectancy was much less than it is these days, and there were no financial planners around to help people save up enough to quit work. As recently as the 1960's, if you did manage to save up enough money to retire, you'd be lucky to live another 5 or 6 years before you kicked the bucket. This made financial planning for retirement a little easier because you really only needed enough income for a few years.
Nowadays, if you retire, chances are you can live forever. Well, it can seem like forever?especially if you haven't saved up enough money. It is a daunting task, attempting to set aside enough money to supply an income for 25 or 30 years, in the 15, 10 or 5 years you have before you retire. We say this because most people don't get really serious about their retirement planning until they hit 50?and realize they had wanted to quit work at 55!
This is the standard model that has been followed since we began living long enough to bother with retirement savings. You set aside enough cash to cover things off at some future distant time. You build the nest egg and then hope it lasts, and the financial planning community is right there to help you. And yet this is not how the most successful people in our community do things at all!
Still, most people are busily trading their time for their money. As an employee, you are limited by how much time you can actually devote to your job, and you are limited by how much time you want to devote to your job. Time you give to your workplace is time you don't get for yourself. It's similar for self-employed people such as our selves. The more successful we are as financial advisors, the more 'in demand' we become, and the less time we have.
Retirement looks pretty good when you're an employee, or a self-employed person. You'll have the money coming in, and the time for yourself. The problem is that it is an awful long way off. Is there another way?
The first time Rick read 'Rich Dad, Poor Dad', he just got irritated. After all, this was the book that pointed out how he was locked in the self-employed cycle where success leads to less free time. And he likes his free time. However, author Robert Kiyosaki also proposed 'an out'. It's called passive income. Passive income is income you have coming in to the household that you don't really work for anymore. The key is that it is designed to happen in the near future instead of the distant future.
Since reading his books we have begun to change our financial plan. Instead of continuing to organize our finances around future income for a distant 'retirement', we are re-orienting things toward near-future passive income and 'financial freedom'. We have been doing this by purchasing income-producing real estate and by looking to start internet businesses.
The success of our new 'passive income' plan remains to be seen, but it is interesting to note how changing our end result from retirement to financial freedom has completely altered the path we're taking. These two goals are NOT the same. When you build a retirement nest egg you are looking to draw an income from it at some future time. When you are looking to attain financial freedom, you are looking to purchase or create assets which provide you with 'passive' income right away.
Should everybody be changing their financial plan? Of course not. For one thing, many people hate the idea of being landlords, and many others don't have the stomach for business, let alone the technology business. Retirement planning is still needed. RRSP's, mutual funds, and other longer term savings programs still have their place. There will always be employees and self-employed people who rather like what they do and are quite okay working until their retirement age.
All the same, if you are wondering if there might be a better way to ensure your future financial wellbeing 'sooner', perhaps you should pick up a copy of 'Rich Dad, Poor Dad'? and get irritated. Either way, it will probably turn out better for you than it did in the past.
In the past most people never retired. They died.
About The Author
Rick Hoogendoorn has been in the financial services business since 1991. Cheri Crause is a certified financial planner in Victoria, BC.
 Google News Updated : Fri, 22 Aug 2008 00:13:38 GMT Microsoft's Photosynth wilts under pressure - Computerworld
Computerworld - By Gregg Keizer August 21, 2008 (Computerworld) Within hours of its launch, Microsoft Corp.'s new photo-stitching service went dark, overwhelmed by demand, the company said Thursday afternoon. New Microsoft photo site spends first day offline New Microsoft Tech Converts Photo Soup Into 3-D Image Publ.Date : Thu, 21 Aug 2008 23:28:59 GMT UPDATE 1-Microsoft enlists Seinfeld for ad campaign--source - Reuters Reuters - By Steve Gorman LOS ANGELES, Aug 21 (Reuters) - Comedian Jerry Seinfeld will star in a $300 million marketing campaign for Microsoft Corp aimed at burnishing the image of its computer operating system, a person familiar with the effort said on Thursday ... Jerry Seinfeld and Bill Gates to star in anti-Apple ads Seinfeld to be pitchman for Microsoft Publ.Date : Thu, 21 Aug 2008 21:27:28 GMT GM to Invest $500 Million To Build Chevy Cruze - Wall Street Journal
Wall Street Journal - By KATHY SHWIFF General Motors Corp. will spend more than $500 million in the US to build the Chevrolet Cruze, a next-generation compact car. GM announces $500M investment for small car GM to invest $500 million in small car plant Publ.Date : Thu, 21 Aug 2008 21:10:12 GMT Marlins let one slip away in San Francisco - Sports Network
Sports Network - San Francisco, CA (Sports Network) - Marlins reliever Kevin Gregg's wild pitch in bottom of the ninth inning scored Emmanuel Burriss to send San Francisco past Florida, 4-3, in the finale of a three-game series. Giants walk off on Gregg's wild pitch Giants beat Marlins on wild pitch in 9th inning Publ.Date : Thu, 21 Aug 2008 23:33:45 GMT My Super Sweet 16: The Miley Cyrus Edition - E! Online
E! Online - Miley Cyrus is about to show up all those spoiled brats on My Super Sweet 16 who think they're cool being flown to their party by helicopter or when they're carried in like a princess by a group of hot dudes. Miley Cyrus to Celebrate Turning 16 at Disneyland Miley Cyrus Sweet 16 Publ.Date : Thu, 21 Aug 2008 20:21:48 GMT Hillary Clinton's Staff Looking to Avoid Embarrassing Anti-Obama ... - FOXNews
FOXNews - Hillary Clinton's staff is trying to avoid an embarrassing anti-Obama demonstration by her supporters during the floor vote at next week's Democratic convention in Denver. Clinton Will Attend Fund-Raiser for Towns Clinton for VP? She Says Ask the Obama Campaign Publ.Date : Thu, 21 Aug 2008 23:15:16 GMT IAC Officially Breaks Up - Wall Street Journal
Wall Street Journal - By DAVID BENOIT and KATHY SHWIFF IAC is left as a collection of more than 35 Internet companies -- including search engine Ask.com, dating site Match. IAC: And Then There Were Five Diller's IAC Split May Fail to Boost Investor Returns (Update2) Publ.Date : Thu, 21 Aug 2008 23:17:40 GMT Earn Money With Surveys |
PARLOT::Ebooks, Scripts,
Websites, and more... Several days ago, the Commerce Department reported that May's factory... Read More Can you concisely summarize your investment philosophy in a few... Read More Q: My youngest son wants to borrow $5,000 to start... Read More A Business Plan, as all good entrepreneurs starting out in... Read More The Federal Reserve recently raised its target federal funds rate... Read More Ever since the turn of the century, world stock markets... Read More Have you often wished you could have got in on... Read More The first point to mastering money management is that you... Read More This article attempts to help give the investor a broader... Read More What is an Angel Investor? An Angel is usually a... Read More Do you ever wonder exactly what's going on in the... Read More A way that investors get ripped off and in a... Read More In the simplest of terms, Arbitrage means to exploit price... Read More Suggesting the use of a franchise business as a vehicle... Read More While there is not a lack of information on annuities,... Read More 50% Of U.S. Households Invest In The Stock Market Individuals... Read More The Light Crude Continuous Contract closed at $66.13 a barrel... Read More There is one indicator more than any other which determines... Read More In less than four years, the price of oil has... Read More Gold Maple Leafs and Silver Maple Leafs are receiving packaging... Read More Over the course of the past two months, readers have... Read More Investors are still too slowly realizing what the academics have... Read More Everyone knows T Rex was the most fearsome of all... Read More Do you rule your superannuation or does it rule you?It's... Read More Have you ever noticed how some words in the English... Read More
Adsense
websites
The Economy Is Not The Stock Market
Wit and Wisdom on Money, Wall Street and Success - Part #4
Investing In Sons Business Could Cause A Real Family Feud
What is an Investor Ready Business Plan
5 Ways To Protect Your Bond Portfolio From Rising Interest Rates
Beta Factors: How They Can Be Used In The Current Situation
Commodities - The Next Big Wave of Fortune Building
Trading Expert Discovers Ways To Beat Stock Market Odds With Money Management
Investing in Car Dealerships: Doing Your Homework
Angels Investors and Their Networks
Success Trading for New Traders: What Does Bid and Ask Mean?
The Past Does Not Equal The Future: Mutual Fund Returns!
Just what is Arbitrage Investment?
Use of a Franchise Business as a Family Tax Planning Strategy
Annuity Investment Guide
5 Things To Know About The Stock Market
Preholiday Trading
Understanding The Real Rate of Return!
The High Price of Oil
Gold and Silver Maple Leafs Get New Packaging
Beginning Investor - Investment Terms
Foreign Investing - US Investors Still Missing Out?
Tyranosaurus Rex
Super Rules, OK?
A Gadfly On A Dinosaurs Butt, Or The Hood-winking Of The American Investor
Affordable and Reliable Web Hosting Starting at $4.49/Month
Reasons For Joining An Investment Club
Whether you're a novice investor or an experienced stock picker... Read More
Investing Psychology Today Requires All Traders to Awaken Their Speculator Minds
Stock trading strategies are as rampant today, as they were... Read More
Making Every Penny Count
More and more workers are leaving their jobs and taking... Read More
In a Time of Need
As I take my leisurely walk with my dog through... Read More
Use of a Franchise Business as a Family Tax Planning Strategy
Suggesting the use of a franchise business as a vehicle... Read More
The Benefits of Laddering Your CD Investments
If you've decided to stock some money away in a... Read More
When Its Too Late to Save for Retirement
You are 55 years old (or somewhere around there) and... Read More
Forex Trading Best Practices
FOREX, the term for the FOReign EXchange market, is an... Read More
Your Worst Enemy To Successful Investing - The Media
How do you make your investment decisions and where do... Read More
It?s Never too Early to Start Investing!
Remember the old saying, "never too late to start"? Well,... Read More
Everybody Wants to Know How to Invest
Those unfamiliar with the process of making and managing investments... Read More
Understanding The Real Rate of Return!
There is one indicator more than any other which determines... Read More
Forex market offers opportunity and information
The forex market is what is called an international exchange... Read More
Who Wants To Be A Millionaire?
I am sure you have probably read about the power... Read More
Investing In or Owning Drug Lab Properties
Clean Up (includes the insides and the outside of a... Read More
High Volatility Investments
Penny stocks and options are high volatility investments that attract... Read More
Bankers in Denial
Denial is a ubiquitous psychological defense mechanism. It involves the... Read More
Gold and Silver Maple Leafs Get New Packaging
Gold Maple Leafs and Silver Maple Leafs are receiving packaging... Read More
The Myth of the Earnings Yield
AbstractA very slim minority of firms distribute dividends. This truism... Read More
Raising Capital in Today?s ?New Economy?
We've helped a number of clients develop business plans and... Read More
Hedge Fund 101 - Make Money with Hedge Funds
Investors are always looking for the best investments that will... Read More
An Old Dividend Stock Investment Idea, for a New Generation
Death and taxes! The certainties of life! And then, of... Read More
Day Trading Strategy or Stock Trading Software? The Way You Pick Stocks Affects Your Results
The trading method you employ to approach the stock market... Read More
Investor Guide to Financial Health
Step 1: Spend less than you earnPerhaps the simplest financial... Read More
Secret Stock Options Trading Strategies the Experts Don`t Want You to Know
To understand stock options, we need to look at Webster’s... Read More
Investing |