This blog will provide you with 10 reasons why so many people retire poor. It will also offer some advice on how to avoid this fate.
i hate retirement is a phrase that many people have been saying for years. But why do so many people retire poor? One reason could be because they don’t save enough money.
The number of impoverished retirees is increasing as the cost of living rises and the minimum wage falls. People are compelled to retire impoverished because they can barely keep their heads above water. This is a frequent occurrence, but it is more prevalent in certain nations than in others.
Money may not be as important as health, excellent relationships, or a fulfilling job, but, as motivational speaker Zig Ziglar puts it, “it’s right up there with air.”
However, the sad reality is that only around 5% of individuals would be financially independent by the age of 65. In other words, almost 95% of individuals will retire impoverished.
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What causes individuals to retire in poverty?
Earl Nightingale followed the fortunes of over a hundred people who began bright-eyed and busy-tailed at the age of 25 in his outstanding recording The Strangest Secret in 1956. These individuals were all highly driven and ready to succeed.
“By the time they’re 65, just one will be wealthy, four will be financially independent, five will still be working, and 54 will be penniless, relying on others for their basic needs,” Nightingale said.
These are frightening figures that should prompt us to ask, “Why are 95% of individuals broke at 65?” “Why do 95% of people retire poor?” to put it another way.
Here are ten factors that contribute to individuals retiring in poverty:
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1. They never define financial independence accurately.
For various individuals, freedom may mean different things. As a result, achieving financial independence may mean different things to different people.
The most basic and straightforward definition of financial independence is that passive income must exceed or equal living expenditures.
P.I ≥ L.E
To achieve financial independence and avoid becoming impoverished in retirement, the passive income generated by your assets must be more than or equivalent to the income required to support your desired lifestyle. The majority of individuals retire impoverished simply because they lack a clear concept of financial independence in their lives.
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2. They never make freedom a need.
Many individuals are unable to be productive due to their laziness. If you ask a hundred individuals how they want to become wealthy, the majority will say they want to win the lottery, marry an Heiress, or inherit a fortune. Since of this mentality, most individuals retire in poverty because they don’t have a plan.
Unfortunately, hope is not a plan, and in order to achieve financial independence and retire wealthy, you must be persistent and merciless in your pursuit of your objectives.
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3. They have no idea how powerful their subconscious mind is.
“Wealthy people think like rich people, and poor people think like poor people,” as the saying goes.
Believe me when I say that we all have a self-perception. Your weight, business acumen, and communication abilities all have a self-concept. You also have a self-concept for your present financial situation, which is as important.
It’s interesting, yet many lottery winners lose their winnings within a short period of time. Many individuals who go bankrupt, on the other hand, rapidly recoup their losses. Your financial thermostat will be set by your subconscious thinking. Your financial thermostat, like a thermostat that regulates the temperature of a space, determines your financial reality.
If you want to be financially independent in retirement, you must first look at the financial files that are stored in your subconscious mind. You will always have a negative financial reality if you have incorrect facts. Giving yourself a mental exam to assess where you are may easily end in you retiring impoverished.
“The only way to alter the temperature in the room is to reset the thermostat,” Harv Eker puts it succinctly.
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4. They are surrounded and affected by other impoverished individuals.
Many individuals are unaware of the impact their peer group has on their lives. “You can’t soar with the eagles if you’re scrapping with the turkeys,” Ziglar famously remarked.
If you’re serious about achieving financial independence, you’ll need to surround yourself with knowledgeable advisors. You’ll need a creative accountant at the absolute least, as well as a banker who knows you and your company. You’ll also need access to individuals who are financially independent.
Success always leaves hints, so learn from them, model them, and replicate them. Learn from the individuals who retire wealthy and, more importantly, from the ones who retire impoverished.
“Birds of a feather flock together,” as the adage goes, and you can start choosing to surround yourself with financially liberated individuals right now.
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5. They never face the harsh realities of their financial situation.
When asked about their financial situation, most individuals say they don’t want to speak about or worry about it. Many people will tell you that their money will be managed by a financial advisor or financial planner.
The two most commonly unread mail in the world are brown envelopes and bank statements. The reason for this is that we have an innate reluctance to confronting the harsh realities of our money.
It is educational to manage your money yourself and face the harsh reality about them in order to boost your quest of financial independence. Avoiding the truth about your money is one of the surest ways to retire impoverished.
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They don’t preserve anything.
Many individuals will retire impoverished simply because they do not own a golden goose, and those who do often kill it in the sake of instant pleasure.
Are you familiar with the Golden Goose fable? This family acquired a goose that lay Golden Eggs a long, long time ago. After a while, the family became enraged and murdered the golden Goose in order to get more golden eggs. Regrettably, by murdering the Golden Goose, they also destroyed their income-generating system.
If there is one behavior that everyone should develop, it is the habit of saving money. Sadly, millions of individuals use various excuses to avoid saving. Your financial ambitions may be in a distant place if you don’t save.
First and foremost, pay yourself!
George S. Classons encourages us to pay ourselves first in his famous book, “The Richest Man In Babylon.” Despite the fact that there will be a slew of reasons for not doing it, it may be the most important move you take toward financial independence.
When employees get a raise, how frequently do you notice them purchasing new vehicles or relocating to a more affluent neighborhood? People who are unable to postpone pleasure are more likely to be impoverished in retirement.
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7. They aren’t aware of compound growth’s potential.
Albert Einstein said, “Compound growth is the eighth wonder of the universe.”
Compound interest has the power to make or destroy your financial situation. In fact, it has the power to make or break your life.
Why?
Compound interest may greatly enhance your wealth while also greatly increasing your debt.
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8. Rather of having money work for them, they labor for money.
Income is often expressed in three ways:
- Earned income is money received in the form of a paycheck or a wage in exchange for a product or service.
- Income from stocks, bonds, investments, and pensions is referred to as portfolio income.
- Passive income is money that you get without having to work full-time to earn. Rental revenue, royalties, patents, internet goods, and services are all examples.
Robert Kiyosaki argues in his excellent book “Retire Young, Retire Rich” that earned income is the poorest source of income for many reasons. To begin with, it is the most heavily taxed income. Second, you must put in a lot of effort, and it consumes all of your precious spare time. Third, it has little leverage since the only option to get more money is to labor longer and harder. Finally, since you have to start again every day, there is very little residual value in this revenue.
Wealthy individuals have money work for them rather than working for money, which is a major contrast in mentality between rich and poor people. This is the only way to achieve financial independence.
Continue working for money without an alternate source of income if you wish to retire impoverished.
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9. They lack the necessary information, skills, and mentoring to achieve financial independence.
Knowledge, it is claimed, is power. If that is the case, only a select few are willing to pay the price to get that knowledge. The poor are the ones who have the poorest reading habits. They find it difficult to put money into financial education.
Financial independence will be difficult to achieve without a strong financial education. “Life is difficult, but you can make it worse by being dumb,” as the adage goes. It takes a lot of effort to achieve financial independence. Being financially illiterate may make things much more difficult.
To be financially independent, you must develop and improve your financial abilities. Fortunately, with the introduction of the internet, information has become much more accessible. There are no more excuses.
To earn a stable, safe, and regular income from investing, you’ll need to have a solid understanding of finance and put your abilities to the test over time. The method of acquiring information may be done via books, financial games, seminars, and business coaches.
Employees may easily learn more practical skills and knowledge than they can gain financial information. This is what keeps the majority of people in the rat race and causes them to retire impoverished.
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10. They don’t have a strategy or don’t have the willpower to carry it out.
The methods used by all of the great investors vary significantly. They all had one thing in common, though: they all had a strategy and stuck to it. It’s critical to have a strategy in place for achieving financial independence.
Without a strategy, your mission will be doomed. It is critical to plan ahead. Even a poor strategy is preferable than none at all. (At the very least, you know it’s bad and can strive to improve it.)
The majority of individuals never prepare for their retirement, and the majority of those who do, do it much too late. To prevent retiring impoverished, you must develop a strategy early in your career that will lead you to your financial goals.
You may research successful investors’ techniques and choose the one that appeals to you. It’s critical that you keep going. What eventually wins out in terms of creating continuing profitability is consistency of intention and practice.
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Let’s get this party started!
Tom Stanley and William Danko’s outstanding book “The Millionaire Next Door” shows how two families living in the same kind of home and doing the same job may end up with very different financial situations. One is financially independent by their late forties. The other is bankrupt and despondent.
The explanation isn’t because of education, opportunity, or good fortune. It’s simple; it’s a question of preference. It is your option whether to retire wealthy or impoverished, and no one can make that decision for you.
You have another opportunity today to pick the route you want to take, so make the best decision you can.
This story was syndicated by MediaFeed.org and first published on YourMoneyGeek.com.
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Dinich, Michael
Michael Dinich is a writer, podcaster, and YouTuber who specializes on personal finance. Michael is the creator of Your Money Geek, a popular personal finance and pop culture website with a fast increasing audience.
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