Retirement is suppose to be something that we enjoy. It is suppose to be a time of relaxation and fulfillment. You have worked your entire life. Now it is time to kick back, travel, play golf, and do what ever comes to your mind. Sounds good right? Unfortunately, this is not how it has been working for some of us in the urban community. With inflation, rising cost of living, and living longer, our retirement is not allowing us to live life in a comfortable way.
Educating yourself
I believe the biggest mistake we make in the urban community is we tend to lean on someone else’s understanding to much. Self-education is the key to life. It is ok to learn the basics of mathematics and science in their school system, but understand at some point you will need to educate yourself. Real education goes beyond their school system. I’ve been asked quite often how did I learn so much at an early age. My answer was very simple: I read. #ResearchTheResearch
Diversity is key
Most of us rely on our employers 401k for retirement. At one point in time, they may have allowed you to be comfortable when you retired. But that is not the case anymore. If you want a real retirement plan, you must rely on yourself.
Continue to contribute to your employers 401k, but also take money from your earnings and invest that money yourself. First, set a goal as to how much you want in your retirement fund and at what age. Depending on how much you can invest and your level of risk, you should have a healthy mix of debt securities and equity securities. If you don’t have a lot of money to invest (which is majority of us), start off with mutual funds. This allows for small amounts of money to be invested that can have good growth over time (this is the part where you research mutual funds, you can do that here).
Leverage your debt
This is a topic that must don’t understand until they get into their mid 30’s or early 40’s. Honestly, that is a dangerous age to start learning this lesson. This is a lesson you need to learn as a teenager. Debt can lead to stress, and stress is the number one silent killer in the United States. It is important to understand the difference between wants and needs. Outside of major purchases such as real estate, college, and cars, if you can’t buy it cash, then you really can’t afford it. And it is nothing wrong with that. Going into debt while paying interest is something you want to avoid. You end up paying triple the original price, possibly even more. It is important to try to be debt free by time you reach retirement.
Keep your goal in sight
Many of our parents, including my mother, continue to work past the retirement age by force. It pains me to see this and I’m trying my hardest to retire her immediately. But this is a result of not having enough money in your retirement account. Our mentality is typically “spend money now, worry about it later”. We have to change that mindset. Remember that you are setting the example for your children. It is important to stay on track with your retirement goals and make adjustments if need be.
What are your thoughts? What are you doing to improve your retirement (your comments can inspire someone)?
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