The rich are also afraid to retire
£1 Million Is Not Enough
I spent some time reading through financial investment blogs and forums yesterday and happened upon a post by someone who was planning to retire 'early', but was doubtful he'd be able to sustain his income into old age. This post was from 2011, so that's 10 years ago now. The gist of the post was;
"I have this amount of money in cash, no children and my property is mortgage-free. Where can I invest my cash to sustain this amount of income so I can retire in the immediate future?"
I was fascinated by this question because it is a very common one actually. A lot of people desire to leave their jobs to "retire" early, especially people in their 40s, but are afraid of this very thing. While the question may be a common one, what made this particular one jump out to me were the details.
The guy had one million Pounds Sterling in Cash, no children or dependants, and a mortgage-free house valued roughly at £700k at the time. The guy was a millionaire! He wanted an annual income of £60k to maintain his standard of living after retirement. Another detail is that he was 45 years old at the time.
Most of you reading this would be amazed that someone like this couldn't just walk away from his job and "go enjoy his life" like he wanted to. I mean, with that kind of money, and property, and no apparent parental responsibilities, "what the hell is holding him back?". Right?
Well, he's not the only one. In fact, I was more surprised by the responses I saw in the thread of that post. First of all I was shocked how "normal" people thought it was to have a million pounds in cash. I suppose the forum was frequented by relatively wealthy folk looking for advise from each other. Also consider that 10 years ago a million quid was worth more than it is today due to inflation. They went ahead and scared him out of taking the plunge, I suppose, by projecting their own fears unto the poor man. "Inflation will eat away at that pot of money" said one voice of fear. "It's too risky, why don't you work for another 10 years and secure more in the pot?" said another.
"What about your benefits and pension scheme?" cried one voice of uncertainty. Turns out the guy has even more resources. As of the time he posted, his pension was worth £300k! That's more than most people have at retirement.
I wonder what actually happened, if he had really taken the plunge or not. I hope he did. It would be amazing to have a chat with him ten years on. I have so many questions. What investment did he go for? How is retirement life going? Why didn't he just move somewhere cheaper and let out the big house for even more income? Did he ever discover crypto when it happened?
Peace & Love,
Adé
A lot of people are afraid of dropping their living standards once they get comfortable with them, no matter how superficial or unsustainable they may be. While it is good to plan for a financially secure future, it is important not to lose sight of money being a means to an end, not the end in itself. If we don't, we may just become mindless accumulators whose egos and self esteem are determined by how much we accumulate
I often think of this when I see those YouTubers posting their daily trading videos. How much do they need to feel satisfied? They are so obsessed with making money (and videos and Tweets) they don't have time for anything else. It has become their life.
!ENGAGE 20
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LOL. Some of those 'trades' are fake anyway. It's to create the illusion of making so much money, so that people can follow them and buy their 'products', so that they can then make so much money :D
Yeah. The two I'm thinking of don't have any products for sale though. They do have affiliate links to phemex and bybit. But with one of them it almost looks like an addiction. 😂
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I bet all their video thumbnails look like this:
Got it in one! 😂
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ENGAGEtoday.They said you're too engaging @gillianpearce chill 😂
So very well said. I agree.
Once you hop out the job market and maybe chill for a few years it gets harder to get back in especially as you get older! I guess gold would have been a good bet for him to just protect it and maybe 1% to BTC!
If you’re not into those kind of things I guess the best option would be to use some of that cash to start a small business that kicks off free cash flows each month to cover your living expenses
There’s no easy way to retire really I think deca millionaire and up you could scale down and lounge around but short of that I think you have to be really smart with your money
If I were him, I'd have bought two flats (apartments) near the city centre and moved out of my home. I'd have income that's equivalent or more than 60k a year for that and live in Ibiza or the Canary Islands where life is cheaper and the sun is almost always shinning :)
The properties would have nearly doubled in price by now as well, beating inflation.
Altough retirement sounds cool and all... after a few months into it, it gets quite boring. The innate human tendency to be productive and be of service comes out strong and wont let you be at peace while you just try to spend away the remainder of your life at the beach house.
Hopefully at least it would be something one is actually passionate about at that point.
Part of stepping away from the pursuit of more and more money is also the spiritual process of stepping away from materialism ... the rich, who have "enough," are generally no more ready for that than anyone else...
Very wells said!!!