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What you really need to retire

After reading many articles about retirement, I have come to the conclusion that most of the financial advice addressed to consumers is bad. From the perspective of conventional wisdom, the advice makes sense. The prob­lem is that conventional wisdom is not very wise because it is based on a limited understanding of money.

The essence of much financial advice about retire­ment is that people have not saved enough money. Ex­perts warn that prices will go up and up. You will prob­ably need more for medical expenses as you age. Worst of all, you might live 20-30 years after retirement at age 65 and will probably outlive your money.

Every single one of these money fears is based on a single assumption; after you retire from your job, you won’t earn any more money. This is one of the biggest money limitations imaginable. Such financial advice is based on fear. Your only security is to amass as much money as you can while you are still earn­ing an income, and then use it very carefully before it is all gone. You really can’t depend on these other sources of additional income. In other words, you are essentially powerless to increase your wealth after you retire from your job.

There is another way to approach retirement plan­ning based on a different assumption. The fact that you retire from a job does not mean that you retire from the capacity to make money. The fundamental difference is that you continue to make money in re­tirement and that you take an active role in creating new money.

‘Making money’ is not the same as ‘earning money.’ Making money is a skill that very few of us ever learned as wage and salary earners. When you ‘make money,’ you increase the amount of money available by sell­ing something at a profit, not by earning more through your pension or social security, or from the low interest that the bank might pay you on your savings.

We live in an entrepreneurial age. People who have businesses understand that money is not only a com­modity to be earned and then used up. Money is also a product you can create. There are so many ways that people retired from their jobs can create more mon­ey. They can produce products, invest in real estate, trade Forex currencies, trade in the stock market, write books, consult and coach, or any number of methods to make money.

When you know the difference between making money and earning money, you won’t have to fear a future limited by the amount of money you already have in savings accounts, investments and pensions. It all comes down to knowing how to create money. You will either face a future of money limits or you will understand that you can continue to make mon­ey during all of those fulfilling 20-30 years you live past your job.