I have been obsessed, OBSESSED with thinking about how to finance my retirement and wanted to share with you some of what I have learned.
If you are a hard working, career climbing It Girl, then you know that times have changed for our generation in terms of retirement. Companies are no longer investing in pension plans and instead have replaced them with fee sucking 401k plans. The promise of social security benefits just takes too long to tap into (did someone say I have to keep working until I am 69 ½ years old? ummm….yeah, that’s not going to work for me), so saving for retirement is now falling on the shoulders of you and me…which might just be a good thing after all.
Unfortunately, they don’t teach us this stuff in regular middle class American public school districts (is anything they teach us helpful?), so unless you are one of the fortunate who had well informed parents or you were able to tap into the knowledge bank of those in the know, it is up to you to educate yourself on this subject. Money, money, money….MOH-NEY!
Here we go! So to start this process, I invite you to take a journey with me! I want you to image, just for a few minutes, what and how your life would be different if you didn't have to worry about money. If you knew that you had more money in your bank, from the universe, more than you could possibly ever spend in your lifetime. Imagine you were able to spend as much money as you possibly wanted, the bank account just magically refills itself.
With that endless pot of gold in mind, I want you to think about how you would live, what you would do, who you would be friends with, what you would wear, where you would hang out, what kind of lifestyle you would lead.
Now, in order for this journey to be really effective, I want you to start writing down your ideas. So go get an Excel spreadsheet and start making some lists! In the first column, I invite you to start listing what your top Dreams are…I want you to think through the dreams coming into reality that you would take if you had that absolute financial freedom…then calculate the monthly and yearly income it would take to make it work. This might look something like this:
So now you have the dream laid out in writing - the place where financial vitality is ever increasing and where you have the absolute freedom to do what you want, when you want, where you want. Absolute freedom. Think about that for a minute, sit with it and identify with it, really feel it.
Alright, now that you have thought through the possible, it is time to get back to reality! Remember as you read through these shifts in mindsets, if you want it badly enough, you will find a way.
This step is all about changing your mindset to think like an investor, not a consumer. Every time you spend a penny, buy anything, that latte, cute shirt from H&M, ridiculously good looking shoes, think of it like you are investing. For example, if you are eyeing a shirt that you find attractive for $20, think of it as an investment. What is the return on your investment? What will you get out if it? If you plan to wear it to work, maybe your investment is the admiration and respect from your collegues, perhaps it will help you look more professional so that your boss will start to think that it is, indeed, time for you to have that overly due, much deserved promotion. Now think of that same $20. The whole $20. What would your return be if you invested that $20 in an index fund, what % would you get in return? Is the investment better spent on the shirt or in a fund? It is time to start thinking about your purchases differently – think through what the end result will look like and feel like, make the space, take the time to slow down and think. Create the breathing room to think through those impulsive decisions. This is a habit change so it is going to take some work. It will be hard at first but I promise you, it will get easier. You are re-training your brain to think about not just buying things you need and want, but to invest in yourself.
Think like a collector, respecting money like someone who collects rare and precious items. Think about those people who like to save watches, dolls, beanie babies…and how they show off their collections, putting them on display for people to admire. As you start learning to respect your money rather than despising it, you too can have various collectables for your money– housing, car, insurance, food, clothing, entertainment. For every paycheck your receive, start setting aside a certain amount into each of the collectable categories and start tracking to find out how much you are spending in each category. Congratulations – you are making the transition from spender to collector & investor.
The key to financial success is to remember that knowledge is not power, execution is! For this mindset, I invite you to think back over your life and identify three dreams that you made into a reality and what steps you took to make them happen. It might look something like this:
What was once a dream?
· living in san diego
· losing weight
· stopping drinking
What steps did you take?
· sent 100 resumes to different companies, followed up once per week
· tracked calories – did not go over 1200 per day
· planned what to drink in social situations – soda water with lime
What are the things that were at the time a tragedy, however in hindsight ended up leading you to a better place?
· fired from my job which lead to me landing an even better one
· death of a family member resulted in me moving to a better city
· dumped by a boyfriend helped me start writing a book
Your only competition is yourself - be better than yesterday
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