Traditional financial advisors will normally help people by focusing on the end of a person’s life. They want to make sure that the individual will not run out of money before they die, and to do this they keep moving the goal earlier and earlier until they get to this magical number where they can safely tell a person they can retire.
For example, if you told me that you were going to die at 98 years old and you needed $65,000 a year to live on, our job would be to make sure that you had enough money in your account to make it to your 99th birthday. There are many problems we see with that model, but the first is probably the most obvious – no one knows when they are going to die!
There are many other flaws with that planning model, but there are also some truths.
For example, when deciding when to start taking your Social Security benefits, it is important to take into consideration every aspect of your life – your finances, health and family history. It might be unwise to plan to wait to take Social Security if you’ve never had a family member live past 65 years old.
Like all models, there are pros and cons but the biggest con we see is that this model doesn’t help you plan for today or tomorrow, in fact, it might even take away from the things that could help you both now and in retirement.
That is why we are so thankful to be working on both sides of what we call “the bridge” for our clients. The right side of the bridge takes into account Social Security, your qualified accounts, and even life insurance and annuities as a place to get income from. Most advisors just stop there. But there is another side of the bridge they aren’t considering. The left side of the bridge is made up of things that can generate income for you today and hopefully even more in retirement. We believe there are 7 sources of residual income that you can plug into the left side of your bridge to give you a great base to help you now and on into the future.
When people add the left side of the bridge to their financial future focus, what we have found is that they start getting more and more excited about ways they can generate residual income, all while growing the right side of their bridge at the same time. They start becoming more passionate about what they are gifted at. They start to dream about what the future could be, and how they can help others.
The other benefit that you gain by utilizing both sides of the bridge is that you will already be used to having your money work for you when you hit the time freedom phase or what most people call retirement. When you build on only the right side of your bridge (the traditional route) you can feel very anxious when that first month of retirement rolls around. You’re just hoping that the money you have socked away will actually do what it is supposed to do and that is to provide for your monthly needs. When you start working on the left side of your bridge, (residual income) earlier, you are accustomed to having your money provide you with income each month and you’re not as anxious.
Focus on building both sides of your bridge, and let us know how we can help.