What you don’t know about your Retirement Plan might shock you! A traditional 401k Wealth Bucket Model may not be right for you. What if your bucket of money runs out before your retirement years are over? When you rely solely on that bucket of money, the expenses can drain it over time.
The Wealth Bucket Model Retirement Plan is Broken.
Just like Steven Covey’s book The Seven Habits of Highly Effective People outlines, we are going to begin with the end in mind. Although small details vary between us, we all want the same thing out of life. We want freedom! More specifically, we want the time to do the things that 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, or your CORE Fund. This is the base of your financial freedom. Eventually, your CORE Fund should be generating Horizontal Income 1.3-1.5 times the amount of your Vitality Number. This is how Rob encourages members of his financial community to approach retirement planning. However, most Americans foolishly lean on a Wealth Bucket Model, which we will explain.
What Is The Wealth Bucket Model, And Why Should We Not Use It Exclusively?
The big picture on the Wealth Bucket Model? Most of us have a 401k retirement fund. There is nothing wrong with using one as a nest egg. However, when we rely on it exclusively, we run the risk of running out of money and having to go back to work to pay our bills. Rob outlines more below on the biggest expenses that are holes in the wealth bucket model.
Ignorance – The Number One Leak In The Wealth Bucket Model
When we move on from our businesses, we inevitably want to try new endeavors. We often make the mistake of thinking our new ventures will come just as naturally as our pre-retirement ones. If you must invest in new businesses and properties, do your homework, and partner up with experts in those fields.
Taxes – Tax Drag Drains Your Wealth Bucket Model
Reducing Tax Drag is a huge income stream! Rob preaches this point again and again, with good reason. If you can legally reduce your tax burden, then do it! Then invest the difference in assets that will return compound interest.
Vitality Number
Your Vitality Number refers to the cost of living you want to live within. Live within your values and not your vanity! This is the biggest number you can possibly get wrong! You want that trip around the world that your favorite billionaire influencer took. Geat real! You’re not at their level yet. Wait until you are, or you will blow your Vitality Number out of the water.
Fee Drag
Employing wise advisors is mission critical. However, keep a close eye on what they are charging you, and evaluate annually. The value may not be there anymore. Maybe they aren’t working as hard as they used to in order to get you the results you need. It is important to shop around so you can avoid Fee Drag from these providers.
Inflation – The Silent Killer of Your Wealth Bucket Model Investments
You don’t need a wealth expert’s advice to know that inflation is a wealth killer! Keep this in mind as you are calculating your Vitality Number. Create a report of your Personal P and L to find out what that number is.
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 ATL Inner Circle 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! Sign up today!
