In recent weeks we have seen article after article on the fact that the 401(k) plan has failed the American people. This is one of the greatest examples of how having the wrong map (plan) can devastate your life no matter how smart you are or how hard you work.
You see, millions of Americans where told to scrimp and save their way to retirement. They were told that if they put 6% of their earnings into a 401(k) with the company match of 3% that would be enough along with social security to enjoy their retirement years. They were told that their golden years of retirement would be filled with travel, peace and romance.
You’ve seen the commercials from the different financial planners. The 60 plus couple walking the beach near crystal clear blue water. They show the same couple visiting grand kids across the country or driving Route 66 in a classic convertible. This is what people were told and are expecting out of their golden years.
What a bunch of bull.
After taking this advise and buying this sales pitch, families buckled down and did just what they were told. They scrimped, saved and invested in their 401(k) plan.
What is the end result? The median household headed by a person aged 60 to 62 has less than one-quarter of what is needed to retire and maintain their standard of living after retirement.
As Stephen Covey explained in the “7 Habits of Highly Effective People,” if you work harder, work smarter, care more and just do better than everyone else but you have the wrong map, all you can hope to do is get to the wrong place faster. That is what has happened to Americans.
The question then comes down to “Then what is the right map?” That is easy. With 90% of Americans retiring at or below poverty income levels, only 10% retire wealthy. Guess what the majority of that 10% own. They own income producing businesses and real estate.
That’s right. As my mentor so eloquently put it “It’s the cash flow stupid.” Yes, he said it just like that.
At age 27 I stopped trying to save my way to retirement and started building cash flow. The goal was to get enough cash flow that it met and exceeded my bills. By age 32 I was done. What was the difference? Am I just smarter than everyone else? Do I work harder than everyone else? Do I care more than everyone else? No is the answer to each of those questions. I simply had an effective map.
The best explanation of this concept is in a book by Robert Kiyosaki called “Rich Dad, Poor Dad.” In it he shows you the difference between what the rich are teaching their kids and what the poor and middle class are teaching. It will explain clearly why having the right map is of paramount importance in every aspect of your life.
Go out today and just try a new concept. Build cash flow not savings. See what a difference it will make in 5 years or less. Make a goal of generating enough passive investment income that it meets and exceeds all of you bills.
If you’re not yet a member of Lifestyles Unlimited®. Sign up for our Free Workshop to see if real estate investing is the right map for you.
