My Rules for Retirement

I grew up reading financial books - learning about the stock market - increasing my investment vocabulary - on and on. I loved it. I’d read more. More books - Rich Dad Poor Dad, The Knack, The Number, etc. - you can find them on my resource page if you're interested. I loved it. I got into business - I started a blog - I started investing in houses - I got a real estate license - I started a local entertainment website - I started a real estate brokerage. I love it. But I realized that my mindset was shifting. I realized that I didn’t agree with a lot of mainstream thinking. I now read Money magazine and view it similar to Cosmopolitan - the same stuff packaged in different ways. Nothing different. Going further, I realized that some of my principals were different. 1. I can’t stand the idea of setting aside a certain % of cash for future consumption each month. How do I know that I will make it to 40? to 50? and not 120? The truth is, I don’t. But what if I do? Then I better be ready. But I don’t believe that we’re supposed to worry about that. We aren’t in control. We can’t take any of it with us. When the game is over it all goes back in the box. It’s our jobs to be steward of what we get while here --- time, resources, etc. With that said, this doesn’t mean that I don’t save. I do. But when I have the opportunity to take from my savings and invest in myself and others for education, business opportunities, experiences, giving, etc. - I do. Why? Because to me, this is compounding my investment. What if I lose it? So what. I will be smarter and better and ready to move with the next opportunity. I believe in investing in yourself and creating opportunities that will either give you passive income or large chunks of cash. 2. I can’t stand insurance My goal is to eventually get rid of all insurance except health insurance (too risky to be without for me). Auto Insurance: I hate having full coverage on my autos. I’ve never had a wreck that largely damaged my vehicle. Insurance preys off fear. The “what if” scenarios. Well, I don’t plan to get in a wreck. But if I do, it’s a risk that I’m willing to take. I will either fix it myself or call it a loss, but the only coverage that I need is liability insurance. Life Insurance: When I was 29 and single I got a $100k term life policy because a good friend told me that it was unfair to stick my family with all of my debts if I were to die. Great point. So $10/mo. later I had it. It’s cheap. But then, my bank accounts started offering free $1,500 policies hoping that I’d increase the policy. I didn’t but I did sign up for the $1,500 ones. Then my house gained equity. Serious equity. Even in a depressed market. So I figured that without a family yet there was no need for the term insurance at this point. It was almost more of a nuisance to cancel than not, but now that I did I’ll be happy to save the $120/yr. Now that I’m 31 and married I’m back to having a life insurance policy, but currently only carry $250k (I’m banking on investing in myself with the savings from a higher premium). Home Owner’s Insurance: I hate this too, but I have it. Because the bank requires it. And if I pay off my loan I’d still keep it since my house is currently my largest asset. It’s currently $1,900 annually. I’m in the real estate industry (I win when I sell houses) and you should seriously look at renting. For starters, you would get a month + of free rent every year just by dropping property insurance - not to mention yard upkeep, major repairs, property tax. Yes, you would lose out on deducting my interest, but shouldn’t the main goal be to lower expenses in the first place? Paying money just so that you can deduct a portion of it is insane to me --- read "The Fair Tax" if you never have --- interesting read. Insurance on New Electronics: No Thanks. If it breaks I’ll buy a new one. Insurance on my Package Shipped: No Thanks. I’d prefer for you to do your job and not lose it. Insurance for my Insurance: Uhhhhhh, what? 3. I can’t stand having tons of stuff. Having less stuff can do a few things for you. It can cause you to need less insurance (yess!) And it can cause you to get used to living a simple life which will make life in general much easier. If you live a simple lifestyle then there’s no problem commuting by bike, having only one car, downsizing a home, not owning a boat, riding a bus, cooking at home, drinking less, growing your own food, etc. Living simpler can cause you to need less money currently, which means you can give more away or invest more in yourself (there’s that long term plan again!) With that said my Rules for Retirement consist of: 1. Creating opportunities of passive income. 2. Creating opportunities during my life to bank large chunks of cash. 3. Moving from an amount of greater insurance to less insurance. 4. Always trying to live with less. 5. Putting the “game” back in the box when I die. What are your rules?

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