If you had to totally trash your retirement strategy, how would you do it?
There are plenty of extravagant solutions—a gambling spree in Vegas, buying a boat, or shopping only at designer stores would probably do the trick!
But there are less obvious ways to retire with less. There are subtle misteps that may not lead to financial trainwrecks, but may still result in retiring with less. Here are a few!
Never start saving for retirement. The same is true for every undertaking. The easiest way to torpedo your music career? Never practice. It’s unwise to expect your retirement to be financially sound if you don’t start preparing and saving for it today. Starting is the most important step in your journey!
Buy a house you can’t afford. Few things will consume your cash flow and ability to build wealth more than a house that’s out of your budget. Mortgage payments, emergency repairs, and renovations can be costly even after extensive planning and saving. These expenses can scuttle your ability to build wealth if you end up becoming “house poor”.
Buy things you don’t need. Make no mistake—there’s a place for splurging and treating yourself. But there’s a point where buying more stuff simply weighs you down, both emotionally and financially. And if you’re using debt to keep shopping, you might be setting yourself up for less in retirement.
Be afraid of change. It’s incredibly difficult to pursue better opportunities if you fear change. Improving your financial situation, by definition, requires you to do something different, whether it’s spending less or changing careers. Unless you’re already on track for retirement, a fear of change can hinder your ability to reach your goals and live your dreams.
Never learn how money works. This is the easiest item on the list to avoid. Most people are never taught what their money can actually do and how to build wealth. But it can have serious consequences for your future. Not knowing how money works can prevent you from using critical tools like the Rule of 72 and the Power of Compound Interest to detect both bad deals and wealth building opportunities.
If any of these rung a bell with you, contact me. We can discuss strategies to start preparing for retirement, cut your spending, and find opportunities to increase your income!