GET RID OF YOUR RETIREMENT FEARS ONCE AND FOR ALL
What do you think of when someone says “retirement”?
Do you look forward to traveling and spending more time with friends and family? Or does your mind raise concerns about health and running out of money?
Life is like a roll of toilet paper. The more you go along the faster it goes. And before we know it the time comes for those long-term dreams to become short term goals and reality.
Just to be clear, what we are really talking about is leaving the rat race behind. For some it means retiring from a career or job. For others it may be selling a business.
One thing is certain – you need passive income to cover your expenses.
Do you have any fears about retirement? Like running out of money? Or not having enough to retire while you are still in good health?
What’s holding you back?
What is your greatest fear?
My wife lost her dad to an accident when he was only 59. He was only two years away from retiring. That created a stronger desire within me to be able to retire earlier while we still had good health. As a nurse my wife has seen many patients in their 50s who had debilitating conditions that prevented them from living a full life. That is not what we wanted.
HOW DO WE CONFRONT OUR FEARS?
Several years ago I went scuba diving in Belize. It was with a group of friends while we were on a cruise. It was also my first open water dive away from the shallower waters of the Florida Keys.
I usually would take more time than other divers to descend as I tried to equalize the pressure in my ears. After going down only about 10-15 feet fear and panic set in.
I shot back up to the surface. My dive buddy, Bill Cook, came up with me and asked what was going on. What was the problem?
We took a few minutes on the surface and talked about it. I had a choice to make. I could sit in the boat while everyone else dove. Or I could get back in the water and dive. If I stayed on the boat the fear would not go away but could continue to grow.
I made the choice to dive. We did two dives that day. On one of those dives I looked up and saw a manta ray going by about 30 feet above me. It was an awesome sight that I would not have enjoyed from the boat.
We need to be honest with ourselves. It can be hard to face the truth. We have to confront our fears in order to get the most out of this life. We are not simply talking about enjoying an adventure, but preparing ourselves financially.
When it comes to retirement, what is it that we really fear the most? Running out of money? Being able to afford long-term care for three years? Letting your spouse down?
If you are married it is more complex.
I was confident in our ability to retire and not run out of money. But my wife was not so sure at the time. She wanted to know for sure where the money was going to come from every month.
I think that is true for many couples. Many women have a greater need for security. It’s in their genes. While men have a gene that says “hold my beer, watch this.”
Either belief can lead to crippling results during our retirement years.
Putting money only in investments that are FDIC insured will not provide growth that exceeds inflation. And holding a large percentage of your portfolio in a single fast-growing stock carries another risk. Remember Enron?
AGREE TO EMBARK ON A JOURNEY
Retirement is like graduating from high school.
Every June millions of students graduate from high school and college. This is also known as a commencement ceremony. You probably remember yours. It is a time when you are leaving the safety and environment of something you have become comfortable with and embarking on a new adventure.
Graduating from work to retirement is a similar adventure. It thrusts us out of our comfort zones. It can be a bit frightening.
Wondering if you have enough to retire can be scary. Retiring or leaving a job with a steady income can be scary. Investing in something new can be scary.
Do you have any of these fears? Or other fears about money? If so, how do you handle these fears?
Some people take the ostrich approach – they bury their head in the sand until they are in their 60s and don’t have anything to retire on. They may have hoped Social Security would cover their expenses.
It is even worse for those who develop health issues and are not able to work until they are fiscally prepared to retire.
I have hope that if you are taking the time to read this you are not in the above categories.
Some people are afraid to put their money in anything that is not FDIC insured. Most accounts that are FDIC insured don’t pay enough interest to outpace inflation. That is not investing. It is merely saving. While these accounts can be appropriate for an emergency fund, they are not an effective way to build wealth.
So how do you leave the perceived safety of what you know in order to obtain something else that you really want?
FROM FEAR TO FREEDOM
Here are three things you can do that will take you on a path from fear to freedom.
1. Get more education. Learn about other investing opportunities along with the potential risks and rewards. Gain the knowledge you need to overcome your fears. But be aware who you ask. Just as you would not go to the dentist to ask about pains in your chest, family and friends are not necessarily the best place to get financial advice. Reading books and listening to podcasts by investors in your chosen area of interest can be very beneficial.
Be careful not to become a seminar junkee. I’ve seen many people feel like they just need one more seminar or course to feel like they have enough information to “do a deal” or make an investment. At some point you have to take the plunge.
2. Start small and take baby steps. Some of our baby steps were monthly investments in mutual funds and occasional stock investments. Later we started buying houses to flip or rent. Of course, flipping is not investing, but we learned more about rehabbing during the process. The lessons learned while rehabbing or landlording stick with us much better than anything we have read in a book.
We also partnered with other people on larger real estate deals. We saw pros and cons of investing with partnerships. We learned how to ask better questions up front. How to work with other investors. And how other investors structured deals and managed larger properties such as mobile home parks and apartments.
3. Find someone who has been successful and follow their footsteps. Some are already out of the rat race and retired. There are many ways to make money in real estate and create passive income just as there are people running successful businesses in many fields. The most successful people find a niche and focus on it.
I have found many successful investors are willing to share what they know with someone who wants to learn. Offer to take them to lunch. You might be able to partner with them. Or at least learn from their expertise.
WE WANT TO HEAR FROM YOU
Do you have other concerns about retirement not mentioned here? What steps are you taking to get out of the rat race?
If you want to learn more about how others are investing with us then I invite you to join our club and request a conversation with us.
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