What is the first thing that comes to mind when I say, “Retiree”? This is what I think of: an older gentleman with white hair, socks up to his knees, and 3 or 4 coats of sunscreen on his nose (P.S. To my dad the just recently retired, I am not describing you – I’ll let you know if you fit this description in the future though). It’s only natural to think of a retiree as an old man, but this is not always the case.
How Do These Stereotypical Retirees Survive?
Often, the advice of a retiree is something like this, “Get a great education, find a safe secure job, and retire on your 401(k) and pension.” While many of the current retirees didn’t have a college degree, they are taking their own advice when it comes to their retirement accounts. Most of them are heavily invested in the stock market and bond market, and since they were very young, they have been consistently dumping money into these investment accounts, hoping to someday live on the huge amount of wealth that they have saved.
Let’s say a current retiree has amassed $500,000 in liquid assets. Most likely, he plans on receiving a return of 2-3% on his money, and then he’ll withdraw an additional 1-2% from the principle. With this method, his money will slowly decrease over time, but he’ll hopefully still have some left toward the end of his life.
This method of retiring is so common that it’s considered the norm currently. The reason most of us picture retirees as old and gray-haired is because it takes a lot of time to amass enough money to survive on!
Retirement is a Matter of Income, Not Age
The reason many believe that you must acquire a large basket of money is because they are unfamiliar with the concept of passive income. When a job can be performed once, but will be paid throughout your entire life, this changes views of retirement entirely! You may have only $20,000 in the bank, but with monthly checks of $10,000 regardless if you work or not, retirement is suddenly an option!
Passive Income Methods
There are many ways to develop passive income, but here are some of the most popular:
- Real Estate – If you own multiple properties that are developing a consistent monthly income, retirement is a possibility.
- Song Writing – Come up with a big hit like, “Happy Birthday” and you may never have to work again for the rest of your life!
- Book Writing – Some books create a substantial monthly revenue. Write a good one, and those monthly checks could be more than enough to retire.
- Network Marketing – This has to be one of the toughest methods of passive income (in my experience), but if you succeed, your team will continue earning money even if you’re out on your yacht for a few months.
- Web Business – If you set up a web store and hire a few individuals to maintain the orders, retirement may be knocking on your door.
These are only a few examples, but the message is loud and clear (I hope!!). You no longer have to be old to retire. You can develop a passive income and never have to work again, even as a punk teenager.
Do you have an idea for passive income? Or will you wait to retire until you’re 70?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.