Psychology of Wealth – How and Why The Majority Of People Fail (Part One)

507 Psychology of wealth 1_b

If you resemble the majority of people, you envision your retirement full of enjoyment, laughter, fancy dinners, vacations, and definitely no drama at all. I don’t blame you; we work all of our lives with the objective of kicking back in our last twenty years or even more!

 

I hate to break it to you, however, but the odds of retiring in complete ease aren’t in your favour. Yup, all of those commercials revealing happy older individuals sitting by the swimming pool are lying to you, and the reality is a bit more frightening.

 

Let me run a couple of quick data by you:

  • In accordance with data from the Federal Government, just 3.4% of Australian couples over the age of 65 will have a combined income greater than $35,000.
  • More than 80% of all Australian couples at retirement age only have combined earnings of $15,683 or less – that’s below the poverty line!
  • Over 2/3 of Australian couples run out of money in the first six years of retirement.
  • To live at ease in retirement, Australian couples require $26,000 annually.

 

As you can see from this info, those wonderful joy-filled days spent relaxing by the swimming pool in retirement don’t come easy. Sadly, most people will not attain monetary success before they retire.

 

You might have the following question, “Well John, why do so many people stop working at this?”

 

Great question! This is the first post in a series where we talk about the factors individuals fail at so you can learn from their mistakes. Let’s start.

 

Things Aren’t Really Hopeless

 

Although these truths and stats will make your individual circumstance seem dire on paper, in reality, you can make it into that top 3.4%. Reaching your mid-sixties with more than $35,000 to spend each year is a genuine possibility if you are careful and follow a sound monetary method.

 

This is where numerous people come unstuck, and why a lot of people wind up below the poverty line in their later years. They don’t prepare for retirement successfully, and they think that their superannuation fund will look after them.

 

Sure, passive investment methods like this will supply nominal returns, however, if you desire to actually live wealthy in your retirement years, you need something more than a “set it and forget it” investment method.

 

Lots Of People Believe They Cannot Manage to Invest

 

Time and time once again, I see and hear from people saying they do not make sufficient money to afford financial investments. In actuality, the less money that you make, the more you ought to invest!

 

Here’s an example: I knew a person that spent all his working life working as a gas fitter. He didn’t make a lot of money, and in some cases he had trouble just getting by. However, he still bought into the stock market and purchased appealing blue-chip shares.

 

He followed advice from specialists and made the effort to inform himself on the investing strategies of the wealthy. Where is he now? As soon as he retires, he’s sitting on blue-chip shares worth over $10 million and is ready to live a life of luxury.

 

Do you understand exactly what makes this guy any different from the majority of the population? He made the effort to find out about personal wealth development. Instead of relaxing and accepting that he would not have enough for retirement, he threw down the gauntlet.

 

He invested exactly what he could pay for not only in the markets but likewise in his individual money education. Knowledge is power as they say, and the more that you know about wealth production, the more you can make in the long run.

 

You’ve Already Decided

 

You might say, “I’m not worried. There’s no way that I’ll fall under that bottom 80%. I’m predestined for wealth and prosperity.” Well, let me ask you this: Do you have any evidence to suggest this? It’s possible that you’ve wrongly put yourself in a prosperous classification due to the fact that you are too afraid to envision yourself with the majority of individuals that fail economically.

 

They pictured themselves living wealthy in their retirement years. No matter how you imagine yourself in the future, if you fail to prepare appropriately, you’ll end up failing altogether.

 

The truth is, if you want to prosper economically, you require more than just a false image of your future retired self. You have to begin preparing now and start growing your wealth education while there’s still time.

 

If you do, you could find yourself successful and living a comfortable life of relaxing by the pool well into your 60’s without a single care.

 

Stay Up to Date

 

This is just part one in my series on the Psychology of Wealth. Follow my blog and my social networks to keep up with the next post!

 

 

Resources:

https://actuaries.asn.au/Library/NANCE.pdf

https://www.investopedia.com/terms/b/bluechipstock.asp

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