Skip to main content

A hard cold three step look at your financial future

Blog Image
What will your financial future look like in a couple of year’s time? Will you have enough monthly income to sustain your family’s needs? Are you saving enough for retirement? Why even think about these questions: ‘I’m still in my thirties, many more years worth of saving to go!’
 
Not many people consider these questions until it’s too late. Why should you? With the likes of your pension fund/401k and other financial products, surely your idea of the perfect life is in reach.
 
Irrespective of how you see things today, I’d like to give you a powerful tool, a way for you to determine how much income you will have at retirement and whether you will meet your goal.
 
The last thing I want to do is sugar coat the truth here. There are many things in life that enable happiness. Money is one of them. It facilitates an easier life. It allows you to live a life of purpose. But it may not be there if you are unwilling to change your financial strategy. For many, it’s a pipe dream.
 
I’d like this post to serve one purpose, and that is to prompt you to look at your future in a hard, cold, numbered and calculated way.
 
Because that’s what a financial future boils down to in a world of money; the size of your retirement fund. For crying in a bucket, can you get more callous than that!
 
But I feel it’s necessary…no…paramount. I receive many emails from people asking me why earning a passive income over and above a pension is necessary.
 
►My answer: complete the simple three step exercise below:  
 
Step 1
 
Open up our retirement income calculator by clicking on the following link: Retirement income calculator
 
Step 2
 
Select your currency and complete the nine fields provided.
 
 
financial future calculator input one
 
 
Step 3
 
The ‘Results’ section of the calculator tells you three things:
  • The total funds you will have at retirement age
  • Your pension when you stop working
  • The gap between your expected income and desired income at retirement
Note that the results are provided in today’s value of money. It basically paints your future financial picture as if it were today.
 
 
financial future calculator input two
 
 
Is this what you expected? How does your idea of tomorrow compare to what you should realistically expect? Will you have the necessary income to support your ideal lifestyle? How big is the gap? Do you see why it is crucial to build multiple income streams?
 
►Key lesson:
 
The calculator offers one key take home lesson. Investment return plays a massive role in your wealth creation efforts.
 
Change the percentage in the ‘Expected annual return on your investments’ field by 1, 5, 10 or 20% and see how your income at retirement changes. It makes a big difference.
 
You can shape your financial future by doing two things:
  1. Determine the return required to meet your income goal at retirement.
  2. Acquire or build the assets that will deliver the required return.
 
►Have a question that you would like answered in a blog post? Feel free to email me your question by clicking on ‘Ask Roberto A Question’

Rule of 6 book