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How to grow your money post-retirement

Retirement planning involves pre-retirement goal-setting, mapping out future financial problems and providing money solutions.

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When I was young, I was stupid. I wanted money and lots of it.

I came of age in the 1980s, when BMWs, cocaine, and the movie “Wall Street” were all the rage. If you didn’t have a bead on a million bucks by 30, then you were a failure. The only goal of working was to amass so much money that you could, in nice terms, tell the rest of the world to “go away.”

So, how much was that? Did I need $1 million? Even at 21, I knew a million dollars wasn’t going to cut it. How about $2 million? Do I hear $5 million? I never decided. Thankfully, life got in the way.

I got married. Had kids. Raised the kids and put them through college. I’ve had professional ups and downs along the way, with skinny years and profitable years. And I’ve also learned that carrying around a financial goal like a millstone isn’t a benefit, it’s a burden.

Because focusing on a number ignores the real problem that almost everyone will face in retirement—turning wealth into cash. And there’s no specific number that can solve that issue.

It sounds easy enough to convert wealth into usable money. Sell something. That’s great, but how much do you sell, and when?

There are a million fancy retirement calculators that help you determine your “number,” that magic level of wealth that will allow you to retire in the style you want, but precious few of them talk about how that number becomes rent money.

Monte Carlo simulators will spit out the probability of you reaching your financial goals. That’s sort of useful, but probabilities mean the risk of failure remains.

The money you want to invest need not be big. It just needs to be invested in the right direction.

The money you want to invest need not be big. It just needs to be invested in the right direction. (Source)

And you can find investment programs that show you how things might go if you spend down your nest egg by a certain percentage a year. But what happens if the markets go against you? Do you keep spending, banking on the notion that the markets will rebound? Or do you cut into your standard of living and try to shore up your investments?

These questions haunt all but the richest and poorest among us. And they don’t have to. Instead, we should turn the questions upside down.

I don’t need to solve for my “number.” I need to develop streams of income. I want cash flow that hits my mailbox (or bank account) on a regular schedule, giving me the financial wherewithal to pay for a comfortable lifestyle. If it takes me $800,000 or $4,000,000 to do it, that’s a different story and will be specific to my situation.

But the focus is on income, not wealth!

As you think about your investments, consider what they mean to you.

Are they growing pockets of wealth for specific purposes, or are they simply an amorphous blob that is meant to somehow provide for you in the years ahead? If the answer is the latter, then I strongly urge to you start planning today on how you will convert your wealth to income, so that it provides what you will need most: cool, hard cash.

Who knows, as I look out at my own retirement, I might even use some of my income to buy an old BMW.

DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.

Rodney works closely with Harry to study the purchasing power of people as they move through predictable stages of life, how that purchasing power drives our economy and how readers can use this information to invest successfully in the markets. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs and is featured on television where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He too is a regular guest on Fox Business’s “America’s Nightly Scorecard.” Rodney’s book, Irrational Economics, explains the forces that you cannot see but that really drive the economy and markets and can cause your wealth to rise or fall. To survive and prosper, you need the new money rules of the 21st century, which he outlines in this book. He holds degrees from Georgetown University and Southern Methodist University.

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