What you don’t know about your own Retirement Plan might just shock you! Most American workers invest in a traditional 401k Wealth Bucket Model. However, that just may not be right for you, the savvy investor. Think about it. What if your bucket of money runs out before your retirement years are over? When you rely solely on that bucket of money, the ensuing expenses can drain it over time. Those funds could dry up before you pass away, and then you may have to go back to work. Definitely not what anyone wants in their twilight years. Read on for further explanation and a much better way for you to save for retirement!

The Wealth Bucket Model Retirement Plan is Broken.

Just like Steven Covey’s book The Seven Habits of Highly Effective People outlines, we will begin this essay with the end in mind. Although small details will vary between us, we all want the same thing out of life. We want freedom! More specifically, we want the time to do all the things that will fulfill us. Hopefully, we can make that time before we are too old to actually enjoy them to the fullest.

Rob outlines the means to this system as your Wealth Operating System, also known as your CORE Fund. This fund will form the base of your financial freedom. Eventually, your CORE Fund should start to generate Horizontal Income, totaling 1.3-1.5 times the amount of your Vitality Number.

This is how Rob Rowsell encourages the members of his financial community to approach their retirement planning. However, almost every American will foolishly lean on a Wealth Bucket Model. We will explain that model next.

What Is The Wealth Bucket Model, And Why Should We Not Use It Exclusively?

What is the big picture that we want to paint about the Wealth Bucket Model? Most of us American citizens will contribute regularly to a 401k retirement fund throughout their career. There is absolutely nothing wrong when you use a 401k fund as a nest egg. However, when we rely on it exclusively, then we run the risk of running out of money before we are ready. We may have to go back to work in order to pay our bills. Rob outlines more below on the biggest expenses that are holes in the wealth bucket model.

Ignorance Is The Number One Leak In The Wealth Bucket Model

When we move on from our businesses, most of us will inevitably want to try new endeavors. We often make the mistake of thinking that our new ventures will come just as naturally as our pre-retirement ones. Many a successful investor has fallen prey to this trap. If you insist on investing funds in a new business or property, then you have to do your homework! Make sure that you partner up with some trusted experts in those fields.

Taxes – How Tax Drag Drains Your Wealth Bucket Model

When you reduce your personal Tax Drag, it can create a huge income stream! Rob preaches this point again and again to our community, and with good reason. Does your CPA recommend ways that you can legally reduce your tax burden? Well then, do it! Then, you can invest the difference in assets in accounts which will return compound interest.

Find Out What Your Vitality Number Is

Your Vitality Number refers to the annual cost of living which you want to live within. You should always live within your values, and not within your vanity! This is the biggest number that you can possibly get wrong! You want that trip around the world that your favorite billionaire influencer took on Youtube so badly. Geat real! You are not at their level yet. Unless you wait until you absolutely are, then you will blow your Vitality Number right out of the water.

Avoid Fee Drag By Consulting With Wise Financial Advisors

The task of employing wise advisors is mission critical. However, you need to keep a close eye on what they are charging you.  You should also keep evaluating it annually. At some point, the value may not be there anymore from their side. Maybe they are not working as hard as they did in the past in order to achieve the results you need. It is so important to shop around, so you can avoid suffering Fee Drag from these providers.

Inflation – The Silent Killer of Your Wealth Bucket Model Investments

You do not need a wealth expert’s advice in order to know that inflation is bad. In fact, it can be a real wealth killer! Keep this in mind as you are calculating your personal Vitality Number. Create a written or printed report of your own Personal P and L. Then, you must examine it in order to find out what that number is. When you stick to that number, then you can never go wrong.