You read here about how hard it can be to spend money, especially in retirement. It’s not easy for successful Americans on Main Street, to whom I write, to let go of the purse strings. When you spend your entire adult life working and saving, it’s hard to let go—to rely on other sources of income to live your life. I know this because you tell me.
In my conversations with you, we talk about the psychology of no longer getting a paycheck. Yes, it’s nice having the option not to work, but at least when you were working, you knew how to make your financial life work. Now there’s uncertainty, and that’s not a great feeling.
Recently, I reviewed the annual draw rate with clients of mine. And, not surprisingly, what they spend is well below four percent and, in fact, is below three percent in many cases. Nice.
When you get below three percent and realize your income needs are mostly met by dividends and interest, you realize prices aren’t your biggest concern. Being paid is what matters most, not necessarily what prices do. Prices are qualitative. They’re opinions of the mass market. Separate yourself from the crowd. Focus on the quantitative. Focus on your income.
Action Line: Hoping and praying for prices to do something for you is not investing—it’s a form of speculation. When you’re ready to look at your portfolio’s income potential, let’s talk. But only if you’re serious. Email me at ejsmith@yoursurvivalguy.com
Originally posted on Your Survival Guy.
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