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Retirement Planning
When planning for retirement you get out of it what you put into it. Retirement options can be put into the order of those requiring the least amount of effort to those requiring the most amount of effort. As the amount of effort involved in a plan increases, the benefits you gain also increase.
The Easy Way Out
Leaves You Poor
The first option we will explore, therefore, requires you to learn nothing. The plan itself is simply to save your money. The benefit is that it requires no extra effort on your part. Also, most savings accounts are insured by the federal government for up to $100,000. In return for letting the bank keep and use your money, you will receive some interest on your money.
This is a very slow and capitol intensive way to fund your retirement. It will take you 40 years of carefully following this plan to achieve an affordable retirement. This large amount of time works against you doubly when you consider the increasing cost of living (inflation), making your small interest returns even smaller over time.
Too Busy Working
No Time to Learn
The second option is to build a portfolio. The biggest benefit to this option is that it is a little faster than saving, but it is similar in many ways to saving.
This form of retirement "planning" also requires relatively little effort on your part to educate yourself or to actively manage your plan. Every pay, you put money aside until you retire. At that point you begin to take the money out.
The portfolio strategy includes mutual funds, stocks, bonds, and common retirement accounts like IRA's and 401K's. With this strategy most people still remain dependent on their earned income as their main source of contributions to their plan. The biggest drawback to this plan is that you are not insured or protected from losses.
Passive Income and Retirement
Once you figure out how to create passive sources of income to fund your retirement plan, the whole game changes. Often it is possible to retire in 4 years or less. This takes a significant change in your mind, your focus, and your goals. Saving becomes less of a concern because you will have an ongoing source of cash flow.
Learning passive income requires the largest investment of your time, but produces the greatest benefits to your retirement plans. To increase your knowledge and experience is to increase your ability. With the increase of knowledge and ability there is an increase in your income.
One of the hardest parts about generating passive income is simply choosing a plan…a way by which you choose to convert some of your earned income into building a system that produces money on a regular basis passively. No matter what plan you can possibly think of, it will generally fall into one of two categories. Properly managed…
OUR STORY
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