There are only two types of people – those who outlive their money and those who don’t.
Of course, everyone wants to be in the latter group, but most Australians don’t fall into that category.
I found that you need to do the hard things now so that you have an easier life later, however, most people do the easy things now and have a hard life later.
They don’t learn to delay gratification, spend less than they earn, save invest and keep re-investing till they have a substantial asset base.
The longer your time frame between now and when you want to leave the rat race, the easier it’s going to be for you to build a substantial asset base to provide retirement income you can’t outlive.
For many the problem is that this is too far out in the future and it’s too hard to have the financial discipline to save and invest – there are too many reasons to spend money today.
How long is your wealth window?
Your “wealth window” is the period of your life during which you can convert your human capital (income) into invested capital.
As you progress through life this “wealth window” is constantly getting shorter and shorter, one paycheque and one month at a time.
Humans are good at a lot of things, but putting time in perspective is not one of them.
Your Life in Weeks graphically shows how quickly time flies. This is a portion of their great blog:
This is a long human life in years:
And here’s human life in months:
And here you can see human life in weeks:
In the graphic above each row of weeks makes up one year.
So it shows how many weeks it takes to turn a newborn into a 90-year-old.
I guess when you look at the last graphic, it seems like you have countless weeks and there’s no rush to start building your investment portfolio.
Unfortunately, that’s not true – and take it from somebody who has lived over 3,600 weeks – these weeks zoom past quickly.
The weeks in the graphic above are your weeks – that’s all you’ve got
How are you using them?
Are you taking advantage of them?
To help give you some perspective, I’ll share one more chart from Wait But Why which shows how a typical American spends their weeks:
How many opportunities have you missed?
Looking at the charts above, how many chances have you missed to do something you love?
What happened over Covid?
How much did you miss out on?
Have you caught up?
One of the things that I value is relationships, with family and friends.
While the weeks of our lives may be numbered, the time we have for our close relationships can be greatly extended through attention and care.
How many more summer holidays will you have with your children?
How many more Christmases will you spend with your parents?
What are you going to do now that you think about it that way?
Small changes like this can dramatically expand the calendar.
We can assist you to determine what will work best for you and start planning for the lifestyle you want in retirement. Give us a call at 08 8231 4709 or send us an email at info@centrawealth.com.au.
Article courtesy of Michael Yardney’s Property Update.
