042: Protect Your Peace with a Solid Retirement Plan
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We’re so excited and talk about all things investing, apartment syndication (our favorite way to invest!) and retirement.
Something our followers may not know about us, is that we talk about retiring a lot. We’re pretty passionate about living the rest of our days on planet earth as comfortable and convenient as possible. And even bigger than our passion to retire comfortably for ourselves, it’s also to share our information with other investors–or soon to be investors– so they can do the same.😊😊
Do you remember working your first big girl or boy job? How intimidating was all that paperwork about insurance, taxes, and a 401K?
The written letters on the paperwork looks like gibberish and intimidating, and guess what? It was intentionally design to be that way so that you feel like you have to give up control over your financial future.
Did you ever think it was a little odd that they spent more time on trapezoids than how to file taxes? You’re not alone in that.
This points to a larger problem in our society, how, or even if, we learn about retirement is so telling.
Retirement is a goal a majority of working people share, but how and when we get there varies from person to person.
So when it comes to retirement planning– where do you start and how much do you need to live off during those sunset years of your life? 🧐
In more detail, how much do you need to make annually from your retirement savings and other investments in order to successfully retire?
Let us tell you, those quaint cottages in 🍇 wine country are not cheap, if that is your dream. Or maybe that’s just us.
Here’s the other thing about retirement: everyone has an opinion on it. There are so many think pieces, articles and people on YouTube who think they have all the answers on this subject matter but they mostly all say the same thing. You need 70-80% of pre-retirement income or 10-12 times your current income.
But that’s not always the case. In reality 👉 the actual amount you need is dependent on your rate of spending, how long you live, and lots of things you can’t control like interest rates, inflation and whatever the heck the stockmarket by the time you retire.
Of course, this is also assuming your retirement savings are mostly stored in a traditional 401K or some other stock market account.
The Thing About Life, There are No Guarantees
If there is one thing to know about this life, it is that there are no guarantees. Heck, think of how thrown off we get when our favorite food place runs out of the one thing we’ve been craving all day? And you’re going to gamble with retirement? Not a good idea.
While we can never predict what’s going to happen next– we’ve heard some pretty horrific stories of people who have some of the worst circumstances thrown at them. One of those being what if you or your partner suddenly become disabled and both of you have little to no retirement savings.
Now that’s a tragedy we don’t wish on anyone, obviously, but it points to a reality that there are a myriad of things that could happen to you that could dramatically increase your yearly costs or lower your yearly savings.
For example, what if your partner needs 24-hour care? 😫😫 Now you’re in a position where you have to pay for daily necessities, bills, and the maintenance of your home on top of a full-time caregiver. That’s a lot of burden for one family. But these types of situations, we’re sorry to say, happen far too often.
There are plenty of other examples that illustrate this point, but we can all agree that one of the best ways to aid this situation is through an influx of cash flow! 😎😎 And passive income can help you do exactly that. 🤟
Imagine your passive income generating an extra $100,000 a year in cashflow that would support you and your loved one. ❤️❤️ While there would still be plenty to stress about, at least your retirement finances are in order.
And that’s a huge sigh of relief, no matter who you are. What’s interesting is that many of the same people who are advocating for lower targets to retire are also the same people who buy things like disability and whole life insurance.
But the problem with those options is that it only covers two major worst-case scenarios– death ☠️ and disability.
While those things can and do happen, we know this life is full of other gray area situations that can’t be covered as easily. It doesn’t address more common seemingly minor issues that create financial havoc for families who are unprepared.
For us, we don’t see this as “what’s the best insurance I can buy for any type of situation”, but rather “how do I ensure I have enough money to cover virtually any predicament that causes financial strain to me or my loved ones?”
Cashflow Multipliers, did you catch the difference? Insure vs. Ensure. Both cover situations, but only one is rooted in confidence. 🤓🤓
So What Are Your Options?
The antidote to small thinking is by aiming big, we’re all about Big. Hairy. Audacious. Goals. 💪
Most people will tell you you need to aim for a large number to save for retirement or your net worth, but we prefer another approach, the Freedom Metric. The Freedom Metric is our secret sauce, it’s the number in which your cash flow exceeds your expenses.
There is a massive difference between people who spend their entire lives working for their money and the people who discover how to have their money work for them. 👀
Which one are you in? And do you wish it could be different? The good news is, that unless you’re planning on retiring tomorrow, there is still time. And even if there are no plans to retire in the near future, but you do have your eyes set on that cottage in Napa, the Freedom Metric still applies.
Why? Because the Freedom Metric is like one giant breath of fresh air. It’s that number that enables you to dream again and get rid of those anxious late-night thoughts about what would happen if you lost your job tomorrow, or how you’ll pay for an unexpected car repair.
In fact, in a Mind Over Money survey conducted by Capital One and The Decision Lab, 77% of Americans reported feeling anxious about their financial situation. 77%! What if you could subtract yourself from that statistic, and no longer suffer from the mental and physical burnout from working long, hard hours. Those are hours wasted with time stuck in traffic, in meetings for a job you kinda like and reaching a quota you don’t really care for. Every single day of the week.
And you still come home anxious about your finances. You don’t, and no one does, deserve that kind of life.
Let’s tell you a story. We have a friend whose sister and husband fall into this exact category. They both have great jobs, he’s a dentist working at his dad’s practice and she is a mid-level executive working at a Fortune 500 company.
And they are living that classic suburban life. They live in an incredible neighborhood where homes typically sell for seven figures and they send their kids to very nice private schools.
Seems idyllic, right? But there’s one major problem– they’re living paycheck to paycheck. This combined income household of over $400K is stressing about their finances every day. Why? Because most of their net worth is tied up in their home, and that’s a big problem. 😰😰
It’s hard to retire early when you have no cash flow or even investments outside your primary home.
And what about the potential situation of reaching your Freedom Metric and realizing you may not need all that cash in the end? Talk about a good problem! What you do with the extra money is completely dependent on you– but let’s hope you’re using that money to give to local causes, support your family, or build wealth rather than needing it to pay for a kidney transplant.
But don’t let one Freedom Metric goal stop you from making another one, it’s all about leveling up so you can reach that next lifestyle level. So once your passive income stream can generate $20K a month, your next goal can be $30K, then $50K a month.
So where do you go from here? And how do you calculate what your Freedom Metric number is?
Well, we’ve got that covered and we’re leaving you with homework. What we want you to do right now is grab the Freedom Metric Calculator.
All it takes is 5 minutes 🤓🤓, and once you figure it out– HANG. IT. UP. Put it somewhere really big in your office, or in your bathroom mirror 🪞, anywhere you look at often.
You’re going to look at this number every day, remember why you’re doing what you’re doing, and do whatever it takes to get there. Your mental health, and future self, will thank you for it.
And after you’re done figuring out your Freedom Metric, your next step, if you haven’t already, is to join the Kitti Freedom Club to get the insider scoop on investment deals that generate passive income and connect with other like-minded investors.
But a fair bit of caution ⚠️, only joins if you’re ready to take your investments to the next level and get serious about that Freedom Metric number– we’re not playing games over here!
GET ME ON THE KITTI FREEDOM CLUB
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