Retiring rich takes a lot of effort and money too. Few people retire at the age of 25 while few are even struggling to make ends meet at the age of 65 too. You don’t need a six or seven-digit monthly income to be able to build a solid retirement corpus. All you need to do is proper planning and have enough discipline to stick to it. If you are planning to retire rich, then read this article to know about the things that would prevent you from doing so in the future.
You are just going with the flow without checking on your income
If you are not focused on increasing your monthly income then you are probably more likely to live poor in your golden years. Even if you are unable to find a part-time project or you are struggling to get the job of your dreams, your focus should be simply on doubling your current income. Just going by the flow without having any not taking any steps towards earning more can land you in financial problems even in the current times. Hence, to live a rich life, you must start finding ways to increase your wealth.
You are not saving regularly
This is one of the primary reasons that would prevent you from retiring rich. The first step towards building a retirement corpus is to save enough. Your retirement plan is simply worthless if you are not saving a portion of your monthly income towards your retirement fund. If you forget to keep a sum of funds aside, then automate your savings or cut down on expenses like dining out, ordering food from outside, monthly subscriptions, phone bills, etc. You could also look to save more by opting for a second job or plan to start a new source of income. For instance, if you are into the field of digital marketing, animation, or others then you can also look for freelance projects. And if none of this works, its time you redo your retirement plan to start saving enough.
You are too much dependent on credit cards
Have light bills to pay? Need to stock groceries? Paying dining bills-if all this is done through credit cards then its time you rethink your financial status. If you are consuming credit cards for paying off basic requirements then you are already getting ready to get stuck in a debt trap. Missing out on credit card bill payments not only lowers your credit score but also adds interest, which can put you further in debt. So its time you stop swiping the card for every little requirement and start using your debit card instead of catering to basic needs.
You are struggling at the end of every month
If you are awaiting your salary at the end of the month or at the start of the month then it's time you sit and think about your finances. You need to understand that this is not a good sign and you need to have a plan in place to ensure you are not completely dependent on your salary. You need to create a plan that allows you to save at least some amount of money before the month ends. Also, note that the banks when processing your loan application also check this factor.
Job opportunities are very limited in your field
Are you employed in a sector that does not offer you many job opportunities? Is it easy for one to get a part-time or freelance job in your sector? If that’s the case then it's time you start working on something different to earn extra income. Also if you are just stuck in your field for survival then it's time you think about pursuing a second career option and have an aim to get a better salary earning job.
You don’t have an emergency fund
Considering the highly unpredictable nature of life, you must have an emergency fund in place. And if you don’t have one or haven’t started building it already looking at the current COVID-19 times then you will surely be broke by the time you retire. Going by the rule, you should at least have 6 months of your monthly salary parked in your emergency fund. This means if your monthly expenses are Rs. 25,000 then your emergency fund should be valued at least Rs.1.5-2 lakh.
You don’t take into account the inflation factor
The cost of medicine has gone higher and so has the average lifespan increased. 1kg of rice that you used to get at Rs. 30/kg has now increased to Rs.100/kg. If you are not taking into account the role of inflation then you are probably doing it all wrong. Remember, inflation has a great impact on day-to-day expenses and the value of your life savings can drastically decrease. Always have a high sum of money parked for your retirement fund to enjoy a peaceful retired life.
You have ZERO risk appetite
If you are an investor who doesn’t wish to take any risk then you would probably never be able to earn more, which would prevent you from living a happy rich retired life. If you are opting for safe investment options like PPF and fixed deposits and gold, then you are doing it all wrong. Remember, you need to have a balanced portfolio that enables you to manage both risks whilst also providing you good returns on investment. You can start by investing more in equities and other types of funds, insurance investments, and others to ensure you maintain a balanced portfolio.
If you can relate to even one of the above points then it's time you rebalance your financial portfolio and create a plan to save more and pay off your debt as soon as possible. Remember, you don’t retire at all if you don’t retire rich. So start now by planning well for the golden years of your life.
Viral Bhatt is the Founder of Money Mantra - a personal finance solutions firm