Frankly, I’d like to stop working today.
Let me be clear. I’d like to continue working, I’d just prefer not to have to work.
Unfortunately, trends aren’t in my favor. Or yours, if you think like me.
Americans are working longer, retiring later. It kinda sucks because 20 years ago we made sacrifices so that we could retire, and now we’re not.
At least skim the article. There are some interesting statistics. I’m not big on fear as a long term motivator, but it’s pretty interesting. Especially the parts that point to a declining ability to generate income from your retirement savings.
Guessing the future
Trying to figure out how to draw down your retirement savings and decide how much money you can spent in retirement is based on a guess.
How long are you going to live?
Well, how long are you going to live?
Yeah, I don’t know either.
Starting a small business, not building an investment portfolio
Your decision about how much money to spend in retirement is about your perspective. It’s not a drawdown on your savings but a paycheck from a side business.
Imagine starting a business that you hope will generate income on the side. You’re not going to sell bits and pieces of the business to get that income. You’re going to generate income from your business. Pull out that paycheck and improve your quality of life, without weakening your business’ ability to keep paying you in the future.
That’s how you need to approach investing.
Invest in companies that pay you to own them. In fact, pick companies that give you raises every year. This makes sure that your paychecks beat inflation year-after-year in retirement.
Reinvest those dividends until you need the paycheck. These reinvestments give you additional raises each-and-every quarter.
Then when it comes time to retire, or just slow down, you’ve got another income stream just as if you started a company on the side (without the headache of running an actual company).