I don't care if you make five hundred thousand dollars a year or fifty
thousand dollars a year the one thing that we all have in common is the goal
of one day retiring however for those who aren't exactly making it rain the
prospect of our retirement may seem bleak given how costly life has become
while i won't lie it is certainly harder to save for retirement on a low income
it is still entirely possible to do so with the right strategy and it's this
strategy that i'm gonna share with you now so i may not be that old just yet
but one of the most important lessons i've come to learn so far in life is
that sometimes you need to take a step back before you can take a step forward
what do i mean by this let me explain you see if you ask the average worker if
they would retire tomorrow given that they had the money to do so most would
however if you ask these people why the reasons for doing so would be probably
rather unimpressed for instance most people would just say that they dislike
their job and leave it at that and it's this exact reason why i say that
sometimes you need to take a step back before you take a step forward i believe
that anyone who is serious about not only retiring early but retiring at all
needs to truly understand why they want to retire in the first place i know for
myself personally i have a desire not only to retire but retire early so that
i can spend as much time as possible with my kids once i have them for others
they may want to retire so that they can escape the stress that the drop puts on
them or the annoyance of having to make small dock every time they run into a
co-worker in the bathroom or at the coffee machine and if you have a
particular reason why you want to retire comment it down below and let's see who
has the most compelling reason for wanting to retire as soon as possible
now probably the most compelling reason for needing a retirement plan is that
even if you absolutely love your job there's no chance you will be able to
work forever despite what you do for work now i know this is going to be a
rather surprise for some people but hear me out because understanding this
concept is fundamentally important for anyone who's currently working towards
retirement where there are a lot of reasons you can't rely on a job forever
to keep you financially afloat here are the three that you must never lose sight
of the first reason you can't rely on an extensive career comes down to
obsolescence let's say that right now i offered to give you a motorola razer
well it was the hottest phone at the time it came out nowadays there will be
no chance you'd even think about using it over your brand new state-of-the-art
iphone well unfortunately as you age you become more like the razer and less like
the iphone and as a result most employers are going to pass on the
opportunity to retain or employ you meaning that in your later years if you
don't already have a nest egg to rely upon then you may find yourself in a
less than ideal financial situation second most people physically speaking
won't be able to even perform their jobs well into their later years maybe you
work in a physically demanding job and down the road your body simply won't be
able to keep up alternatively you may suffer a health event that leaves you
with a much reduced capacity to work now obviously we hope this never happens but
as you know anything can happen in life and if your ability to work becomes
impaired then your financial viability may be at risk finally let's talk about
the ultimate reason that you won't be working forever which is that you will
over time lose your desire to work there is absolutely nothing worse than the
feeling that every day for the next 40 years you have to suffer through 80 more
hours a day at a job you dislike all in the hopes of maybe one day retiring well
if you feel this dread now can you imagine how much deeper this pain will
resonate 30 or 40 years down the road this is all to say that having a
retirement plan isn't just a nice to have but is an absolute requirement
sadly though most people's approach to retirement is chock full of mistakes
which if you're presently earning a low income you absolutely cannot afford to
be making what are those mistakes let me get into them now the first mistake you
must absolutely avoid is thinking you can save your way to retirement
especially as a low-income earner your money simply will not accumulate fast
enough through saving alone however let me share with you an example to really
drive home this point let's say that every year you collect your coupons cut
your starbucks and end up being able to save ten thousand dollars a year after
forty years you'd have four hundred thousand dollars saved i hate to be the
bearer of bad news but 400 000 isn't even enough money to retire on today
which means that in four decades from now it certainly won't be enough however
if you were to invest that money into the stock market instead after 40 years
at an average seven percent return you'd have two million dollars or five times
more money than you would have compared to saving loan therefore especially when
earning a low income investing is a financial strategy you must employ if
you want any shot at being able to retire one day second there's a mistake
of pushing off your retirement savings efforts given you aren't getting your
paychecks dropped off at your house by a brinks truck you will need to rely
heavily on the power of time to make your retirement dreams come true in fact
most people overlook just how powerful time is in the wealth building equation
so let me share with you an example to illustrate this point if you start
investing 300 a month from ages 18 to 27 receive a 10 return a year you can stop
investing at 27 and have almost 2 million dollars when you retire at 65
with just 28 800 of your own money invested however
if you only start investing at 28 you'd have to invest 400 a month until you're
65 175 000 of your own money to get the same results as someone who started
investing earlier so this is all to say that pushing off your retirement savings
efforts is a critical error to avoid especially
when you're being held back by the income you're currently making finally
despite how diligently you manage your money and how consistent you are at
investing over the course of the next few decades there exists one critical
error that can absolutely ruin any chance you ever retire what is that
mistake overlooking the impacts of inflation you see even if you were able
to amass a million dollars for retirement over the next few decades it
still won't be enough to retire on as inflation continues to eat away at the
value of your money sadly many people think that what is a lot of money today
will still be a lot of money tomorrow but this isn't true back in the day your
grandparents used to be able to buy a bottle of coke and a loaf of bread for
10 cents which now can cost you upwards of five dollars the lesson here is that
things are only becoming more expensive over time which means that the money you
have now will naturally lose some of its buying power fortunately for you one
thing that's still free is generally tapping that like button below so go
ahead and do that now so i can share with you a shocking example of how bad
inflation truly can be if you're able to save up one million dollars in the next
40 years an average inflation rate of 3 percent you would have just 300 000 in
today's money to retire on working backwards using the 4 rule this would
afford you just twelve thousand dollars a year to live off of which i'm guessing
for you is downright impossible therefore this is all to say that for
most people you need to set your retirement target much higher if you
want any chance of ever retiring now i know these mistakes can make the
prospect of retiring early seem rather bleak but trust me with a proper
retirement strategy in place you can make things work so as such i'm going to
share with you the no [ __ ] 100 transparent guide to retiring on a low
income so that you don't have to beg groceries at walmart well into your
later years so if you ask me the most effective approach to retirement
planning is to first determine how much you'll need to live off of later on in
life and work backwards from there so for instance if you want to return about
fifty thousand dollars a year in today's money you would need to calculate how
much that would be in four decades time because i'm a nice guy i've already done
the math for you and an average three percent inflation rate this would see
you living off a hundred and sixty thousand dollars a year so at a four
percent withdrawal rate you would need four million dollars saved up for
retirement now i know four million dollars is an intimidating number for
most people but remember stick to the plan and everything will work out next
determine how much you need to invest across your retirement timeline to reach
this target amount again i've done the math for you and you need to invest
twenty thousand dollars a year for the next forty years to amass our target of
four million dollars finally you're probably thinking how the hell do i
afford to invest twenty thousand dollars a year so the two strategies you can
employ to meet these contributions are saving and earning and i'll go over each
one of them now especially when earning a low income managing your expenses is
critical as you probably guessed if you want any chance of meeting these
retirement figures you're going to have to live lean and streamline most of your
expenses i always recommend looking at your big three expenses first of housing
transportation and food before moving on to your smaller monthly expenses
remember to invest twenty thousand dollars a year roughly seventeen hundred
dollars a month you're gonna have to be ruthless in your money management
practices however even with major cost cutting efforts freeing up seventeen
hundred dollars a month to investors will still be a challenge this is why
you need to transition out of being a low-income earner the hardest truth is
that being a low-income runner will simply never allow you to retire i hate
to be the guy to have to break this bad news to you but i'd rather you come to
this realization now and make the changes you need to rather than growing
old and being startled by this realization when it's too late now back
to your retirement game plan to raise your income there are two approaches you
can take work harder or work smarter in the work harder model you're simply
going to trade more time for money by picking up a part-time job and
maintaining this job for as long as you must to meet your retirement
contributions in the work smarter model you will spend time now to develop
either a high paying skill or set up a passive income system that will allow
you to earn money in the present and in the future with minimal time involvement
i personally think the second approach is the best because there's only so long
you can tolerate working two or more jobs and this is why i personally
employed the work smarter approach for the last few years the reality of the
current financial climate we live in today is that there's no viable means of
retiring on a low income if you can make the contributions necessary to retire
fortunately you have time on your side and if you make a concerted effort to
save diligently and expand your income over time retirement will be a financial
goal you will be able to achieve in fact if you really want to start stashing
away a ton more money make sure that you watch this next video where i share my
10 best money saving tips so click on over and let's get started