The Road To Retirement


Manage episode 200480537 series 2124446
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It’s one thing to know where we’re goin’. But it’s quite another to know in which direction we should begin heading on the road to retirement when we’re not sure where we are now. We can’t get to Point B when we don’t know our Point A.

Transcript: Today, let’s talk about where your point B is, but more importantly, the principle that says you can’t know how to get to your point B, being retirement, if you don’t know where point A is. Let’s start taking that apart. In a blank sheet of paper or get some software program that you like, let’s start out by listing all your assets, all your liabilities, what’s really going on in your financial life. Most people that I talk to find out that they’re a little bit better off than they had anticipated. Some of us find little baby spiders that we don’t like, but now we know they’re there, we can deal with them. Write down what you think your equity is in your home, if you own a home. Do you own a rental property of any kind? What’s the equity in that since you bought it? How’s the cash flow working out? Find out if the rents are higher in other units nearby you and you’re just behind the times. What’s the equity in your cars? What’s the payments going out of all your loan payments, all your bills. How much are you saving after tax from the household family budget? Once you know all this, you can take a step back and you’ll say, “You know what, I’m worth about this much, about x amount represents my liquidity or indirect liquidity. I have more equity in my home than I thought. Maybe it makes sense to refinance, maybe it doesn’t.” We’ve talked about arbitrage here before and maybe it makes sense to start that. Maybe it’s past time to talk about taking the equity and turbocharging it in any investment properties you may own. Then when it comes to your IRAs or maybe you have an IRA that’s self directed and a 401k at work and you look at those and you go, “Son of a gun, I have more money than I thought.” I’ve had that happen many times with people. What you have to understand is until you have painted a very clear and understandable picture of where you’re at today with your net worth, and that includes everything, you can’t possibly know how you can get to your point B. I talk about this a lot in traveling. If everybody’s going to meet in Chicago, we’re going to take different routes from New Jersey than we are from LA. One’s going east, one’s going west. Once you are completely aware of your point A, then you can start mapping out how to get to your point B. Here’s the assignment. Do all this. Get to know intimately where you are. Lay it out, so the two things you’re going to find out is what’s your worth today and your liquidity on one side of the coin, and how much you’re able to save every month after tax, after your family pays all the bills. When you get all that, give me a buzz. Send me an email and we’ll talk about what’s possible.

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