Last week, Rob offered a “Bathtub Analogy” detailing retirement investment ideas. What about retirement expenses that drain your money? This week, Rob explains five money drains that can eat away at your retirement savings and investments:
1. Ignorance
2. Taxes (Tax Drag)
3. Cost of Living (Lifestyle)
4. Compound Investment Costs (Fee Drag)
5. Inflation
Can you think of more money drains? How can you avoid (legally!) these drains on your wealth?
Retirement Expenses Explained
Ignorance
When we discuss money draining retirement expenses, there are none more basic than ignorance. If you don’t do your homework before investing in that “sure thing”, you have no excuses.
Taxes
Rob quipped that “tax drag” was the main deterrent to long term wealth growth. When he said “tax drag” what did he mean? Every quarter, you need to review your finances with your CPA. Taxes may not seem urgent, but they will sneak up on you at the end of the year. Consult with a professional regularly to construct a tax strategy that will save your business considerably. A second opinion couldn’t hurt so you don’t end up making disastrous choices that eat into your investment earnings. In fact, you may have outgrown your advisor!
Cost of Living
Out of all of the retirement expenses, your cost of living could be the most uncomfortable topic. It may seem like a no brainer when we say you have to live within your means. You must draw the line where you know the number you need to live comfortably, but you don’t compromise your values. We all work hard, and deserve some creature comforts, but overspending today is a sneaky habit that can hurt our lifestyle in the long run.
Compound Investment Costs
Keep an eye on your Compound Investment Costs, or “fee drag”. These include the fees which you pay your advisors. When you make a lot of financial changes, the middle men and women always get their cut. Consider that when you are mulling your next investment move!
Inflation
Here’s a hot topic in the world of retirement expenses. As of this writing, inflation is climbing. The costs of goods and services are up in every industry. This may not be the biggest expense on the list, but you need to keep an eye on the markets to know where they are going and how you can benefit.
Join Our Community
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the Addicted To Life Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business.
It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!
