3 Tips for Planning Your Retirement Like a Billionaire
From Peter Reagan at Birch Gold Group
While the odds of your retirement wealth growing over one billion dollars is likely to be slim (but not impossible), you can plan your retirement like a billionaire would.
It’s fairly simple, but not easy to do.
We can start with some initial thoughts that were provided in a U.S. News article outlining the billionaire retirement strategy:
It’s fun to dream about having complete financial freedom in your golden years, but if you want to retire like a billionaire, you must stick to a well-planned investment strategy, and perhaps reconsider your lifestyle choices and mindset.
Patience is vital; building substantial wealth takes time. Don’t underestimate how much retirement will cost – or how long you might live.
It’s also important to establish goals for this next stage of life and determine what legacy you want to leave behind.
Now that you have this groundwork to start from, let’s start with the first place you can start planning your retirement like a billionaire…
First, build a strong financial foundation
If you want to build a house that can withstand the test of time, you can’t have a weak foundation. So you have to build a solid foundation.
The same idea holds true for your financial “house.” Your retirement savings plan has to be built on a strong foundation, like an article on Lending Club summarized:
Having a solid financial foundation means owning more than you owe (positive net worth) and having more money coming in than going out (positive cash flow). Building a solid financial foundation starts with taking care of your immediate needs in a way that also supports the financial goals you’ve set for your future. This means not only setting some basic financial goals, but also being responsible with your daily purchasing habits on top of long-term financial planning. At first, taking even the smallest of steps toward improving the way you manage money can help you make big strides in the direction you want to go.
Then the piece offered five straightforward suggestions from which you could start building a financial foundation that doesn’t topple at the first hint of economic turmoil.
Here they are, paraphrased for clarity:
- Get organized.
- Protect finances with an emergency fund, insurance, and proper planning.
- Prioritize paying off high interest debt.
- Clearly define your financial goals.
- Act on your plan.
These are based on a lot of common sense. For example, you couldn’t possibly expect to build a retirement like a billionaire if you were disorganized, had a bunch of credit card debt, and didn’t have any idea what your financial goals were.
An article on the Kiplinger’s highlighted another important part of building a strong financial foundation, being mindful of excessive fees.
Of course, it would take a book’s worth of material to lay out everything you need for building a strong financial foundation. (Although we do provide some of that on our own education pages, including inflation-resistant investments).
But there is one retirement planning idea that all billionaires leverage, which you can use right away…
Don’t spend money you don’t have
Live within your means!
Yes, that’s basic – at first. Consider the recent debt report, which warned us that American families are barely staying afloat on an ocean of $17 trillion debt. Now, debt isn’t necessarily a bad thing. Most people would never be able to buy a home without a mortgage, for example. Let’s not forget, though, debts must be repaid – whether the money is spent wisely or foolishly.
And the more debts we have, the more money we owe, the fewer decisions we get to make about where our income goes. Essentially, debts constrain your economic freedom.
Here are some suggestions for how you can start making your spending more intentional:
If you want to keep the process simple, try a method called “backward budgeting.” Write down your income, then start subtracting each expense you pay each month. If you get to a negative number, then you’re spending too much and need to cut back.
So much personal finance advice boils down to this. I know a lot of people are looking for a silver bullet or a magic incantation (“Abracabankruptcy!”) to make paying the bills easier. Sorry, but it’s simply math.
Depending on your situation, you may feel victimized by the math. You don’t have to feel that way, though – you can make the math work for you. As Charles Dickens put it in David Copperfield:
Annual income £20, annual expenditure £19/19/6, result happiness.
Annual income £20, annual expenditure £20/0/6, result misery.
Dickens knew this better than most – his father was incarcerated in a debtor’s jail when Dickens was just 12 years old, and the young man took a 12-hour-a-day factory job bottling shoe polish. When he died at age 58, he left behind an estate worth somewhere between $15 and $60 million (today’s dollars) shared among his wife, his ten children, his two closest friends and his mistress.
The secret to his success is right there in the quote – no matter how much his income grew from his international status as a literary genius, he always spent less than he earned.
Here’s why this idea is critical: Every month that you can live within your means adds directly to your financial freedom. The more savings you have, the greater your financial freedom.
But in the end, there is one thing billionaires consider above all else…
Health is more important than wealth
If you’re in poor shape, eat poorly, and don’t exercise regularly you could be setting yourself up for failure in the future. Even if you have financial security, if you can’t enjoy it, how much does it really matter?
If you’re in bad health, your mind may suffer, too, which often leads to bad decision-making.
So what do we do? Chris Urban, founder of Discovery Wealth Planning, suggests:
Make personal wellness a high priority. In the long run, this may actually end up saving you money on things such as long-term care and other medical costs and risks.
Without your health, you may not be around long enough to truly enjoy your wealth.
If your health costs go down, you get to keep more of your income. Not only that, but you could adopt the “billionaire mindset” when it comes to retirement planning if you stay healthy.
Even though that is a good thing, here’s one bit of wisdom to keep in mind…
Why a billionaire-lite mindset isn’t enough
In order to settle into a billionaire mindset, and plan like a billionaire would, you need stability. After all, you can’t enjoy a stress-free retirement if you’re distracted by economic trends that amount to “noise.”
The closer you get to retirement, the more you can expect to hear all about how you should invest, when to claim Social Security, which Medicare plan to choose, etc.
It’s all noise. There are no one-size-fits-all solutions. Your retirement plan should be tailored to fit your unique needs.
There isn’t one solution that’s right for everybody.
That’s why stability is important. So diversifying your own retirement savings with stable assets like gold and silver could help you the most right now. Here’s why…
Physical precious metals like gold and silver historically acted as reliable safe havens during the economic catastrophes in the 1970s and during the post-2008 financial crisis. Those metals have also historically outperformed inflation, and are more liquid than you might think (which can be helpful if things go south in the near-term).
Don’t wait, take back control of your financial future, and get all the information you need to consider precious metals in our free kit.2023, Featured, retirement plan, retirement savings