Okay, let me clear the air a bit; last week, I wasn’t trying to say the 401(k) was a bad way to save for retirement, only that it wasn’t a great way to save for retirement. A mentor of mine once gave me some great advice, though, and I’ll share it with you.
“Rich people don’t live like poor people, and if you want to create wealth, you can’t use the tactics rich people give poor people.”
That stuck with me, because I’d never thought about it before, but once I did? It made more and more sense. The truly wealthy people of the world don’t have 401(k)s.
Now, you can fight this truth and rail against it and argue how it’s somehow morally wrong, or you can accept it as a truth and begin to study what the rich actually do have. Robert Kiyosaki and Sharon Lechter nailed it years ago in the partnership they created most of us now know as Rich Dad, Poor Dad.
In reality, there are a lot of ways those of us with far less resources can still get ahead and create wealth. Some of them are “easy” and some of them are far more involved. Frankly? A lot of them are above my ability to easily explain or even offer guidance about.
…But they exist, and IF you begin to dig in and study them, you’ll recognize how, over a period of decades (your working life, for example), you can create not only a comfortable retirement but also a family legacy IF you’ll choose to make minor decisions about money and how you choose to put it to work.
More importantly, I can give you some easy examples where you can often find investment money in places we’ve not been conditioned to look for it.
- The car you drive, especially if you have a commute. Do you need a status symbol or a reliable, comfortable vehicle? I see a lot of folks driving $75-$100K cars and trucks that eat up thousands of dollars each year and simply depreciate. As an added bonus? These are usually not the most fuel efficient vehicles out there.
- The house you live in. It’s all the rage in the middle class to have too much house, and folks in suburbia gobble up these “MacMansions” that, frankly, beg to be filled with furniture bought on credit. Let’s not even talk about the hole in the back yard (or pool, as some people like to call them) that sucks up cash, or the yard that has to be maintained.
- While we’re on the subject, think about all the credit card debt you have for consumer items. Christmas time is fraught with debt, and now? You’re paying 27% on it for the next few months.
Yes, these can be seen to be “big ticket” items, but in reality? If you want to create wealth? You’ll need capital to do it. You can’t save your way to it, and there are precious few tax hacks my team and I could do to give you an extra $10,000 a year to invest in your future.
…But rethinking your current debt structure?
That could very easily handle the task. Drop that car note from $1000 to $500, drop the mortgage from $1500 to $1000 and you’ve just saved an extra $12K annually.
Now invest that for the next 10-15 years and tell me your retirement can’t be incredible AND begin a legacy of wealth for your family.
Let’s talk about it soon,
Sincerely,
