Why Retirement Planning is All Wrong

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“He is richest who is content with the least, for content is the wealth of nature.”Socrates

Dear FutureMoneyTrends.com Member,

In 1889, Chancellor Otto Von Bismarck of Germany announced that he would pay a pension to any nonworking German over the age of 70; at the time, German life expectancy was just under 40 years old. Later in 1916, the German retirement program managed by the government would be lowered to age 65, a number that has been used by the rest of the world ever since.

Prior to the 20th century, there was no retirement, people worked until they dropped. Of course even Chancellor Bismarck’s plan was for anyone who could work to continue working, which is why the actual age to receive pension benefits was so high.

The idea of getting old has changed; no longer do we see granny sitting on an old wooden wrap around porch in a rocking chair, now she’s booking her next 30 day Mediterranean cruise using her iPad.

Conventional planning for retirement is a big mistake in my opinion, instead I think you should plan to become wealthy.

Today’s retirement plan is all about your number, ING even has a commercial campaign about finding out what your number is…They basically assume that you will need to focus on investments with capital appreciation during your working years so that when you are ready to retire, you can draw down on this pile of cash, this precious nest egg.

This is horrible advice that has left millions of baby boomers in their 60’s with no hope of slowing down.

Instead of focusing on investments that need to go up, you should focus on investments that cash flow, compounding your wealth and helping you set up a legacy of wealth, both during your lifetime and after.

Most baby boomers would have been much better off buying rental properties 30 or 40 years ago, paying them off, and collecting the income they provide. Generating not only a large sum of wealth, but a steady stream of passive income to last them until death. Last week I talked about how Warren Buffet’s investment into Coca Cola is now paying nearly a 50% annual dividend on his original investment back in 1987. It is these type of investments that will make retirement possible, it is the act of becoming truly wealthy and financially free.

The Right Way to Buy a Stock

Last week my wife, who just delivered our 3rd child, sent me off to the grocery store to pick up some needed items. On the list was Paul Newman’s Italian Dressing, I love this stuff. I probably go through a bottle a week on my salads, it is an item I’ve bought many times. Typically it sells for between $4 to $4.50 at my local store, but the day I went I saw it for $2.99. I literally cleared them out, buying about 20 of them without hesitation…Why? Because I knew the going rate for this item was usually much more than the sale price that was in front of me.

Capturing this experience is important to becoming wealthy, because if you can apply this to your investments, you will supercharge your wealth.

Imagine the Italian dressing being a share of stock, now what do most people do when a good stock falls from $4.50 to $2.99, most will probably sell it on pure emotion. However, the right thing to do would be to take advantage of the lower price and dramatically increase your wealth by owning more of a good company. This of course should only be applied to safe investments, ones that have stood the test of time.

Look for our new long term speculation idea this weekend! If you have ever wanted to buy a gold call without expiration, this idea is for you…

Have a Prosperous Week!,
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Daniel Ameduri
President, FutureMoneyTrends.com

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