A few years ago when I turned forty I had a wake up call. I reflected on a few people I know who had varying retirement experiences.
The first person was my father who had served as a head master for most of his life and when he was about to retire he faced a challenge that forced him to take an early retirement without any packages. The net result was that he was basically destitute apart from funding from his children. It was great that he invested in his children’s education and it has paid off for him. Despite this its never easy to know that you are dependent on others even if its your children. After all they Bible teaches that it is parents who take care of children and leave an inheritance for them and not vice versa. My father had been prudent and had purchased n insurance scheme to fund his pension but this was eroded by hyperinflation and became useless. He had however in the early 1980s been encouraged by one of his friends to purchased property which was cheap then and he thought it was an unwise decision as he had many children to put through school. If he had purchased at least three or four properties at that time by now he would be a millionaire and it would have allowed him to retire reach at low cost. At that stage it was also easy to get mortgage financing which would have reduced how much he was putting down to acquire assets. However his generation feared debt because it did not realize the need for good debt. So my father in his retirement by not taking the calculated risk had to live below his retirement dreams.
In contrast my mother in law who retired a few years after my dad and was equally a teacher told me that she was getting some nominal retirement package from the government. I assisted her to purchase a property in a small town and encouraged her to not sell two properties that she owned ij another town. Now she is leaving off the rentals of her properties. Though she was a simple teacher she now owns at least three properties whose combined value is probably in excess of a quarter of a million dollars. Judging by her lifetime income there is no way she could be sitting on this investment wealth. My mother in law taught me that wealth can be created simply from current income irrespective of your age. Today she is enjoying her retirement and though the family assists her she does not need them. She could do well without anyone. As a matter of fact she currently through rentals earns more than people who are actively working full time in her profession. That is the power of investment to impact one’s retirement.
The third person who affected my thinking about investments is a respected professional colleague who started working in our profession in the late 1950s but still has to continue working because if he stops working he would be in financial trouble. He has been practicing in our profession for over 51 years but cannot afford to retire. The main reason was that though he had a retirement fund it was also eroded by inflation and rendered useless. I have thought about this and decided that I do not want to be working at that age.
On reflection on these three person I therefore decided that I wanted to retire young and therefore set a target retirement age that is before I turn fifty. It dawned on me that we run life backward. People work hard and long during life hoping to enjoy life at retirement. And yet when you retire around age sixty one is too old to travel and enjoy their passions and hobbies one looks forward to. Imagine people taking the holiday of a lifetime to Victoria falls at age 65 and then fail to climb up and down to view it better. I believe one needs to retire early to be able to have excess time to pursue their other dreams. I wish I had discovered this truth early and retired before forty. But it does not matter I am now on course to my new deadline. I pray that you my reader can work on your own investment strategy that facilitates your early retirement as well.
The next challenge was how do I generate enough wealth and cashflow that would sustain the retirement. That is when I decided to be an investor. I created an investment strategy that fast tracks my retirement and would allow continued multiple streams of income from passive investments. Investments are a powerful tool to allow someone to enjoy his retirement. If one fails to invest wisely they end up regretting their retirement.
What are you doing about your own future? What are your retirement plans/ Which of the three people I described above would you be? It is time to change your situation irrespective of your age. It is never too early or too late.
Many people say “you should work smarter and not harder”. But the older I get, the more I think you should work both smarter and harder. You should be smart enough to know what to work hard on. Some things are not worth my effort and energy.