I look forward to retirement. Who doesn’t? I recently went on a road trip to Key West and Sarasota Florida. Seriously, 80 degrees in December with a breeze? Walking on the beach watching while drinking mojitos? Debating whether to buy scallops or tuna at the fish market for dinner? Choosing between waffles and french toast for breakfast? Here is a sunset and a sunrise in Key West.  Retirement will be awesome.

Consultantsmind - Sunset sail

Consultantsmind - Sunrise

Question: What are you doing to get yourself retired?

Passive Income.  For me, I think consultants and other folks in the well-paid professional services bracket (yes, talking about you lawyers and accountants) need to more aggressively put their money to work. Right now, we are simply trading time for money. We bill out at $250-$500 an hour. If we don’t give the clients the hour, we don’t get the pay. Simple math and unfortunate math. We need passive income, not get-on-a-plane-on-Monday-morning-and-live-at-a-Marriott income.

Are we saving enough? At the end of the day, it’s the old-fashion strategy of spending less than you make (duh), and getting that money working for you. Remember that the average American saves less than 5% of their income. As Dave Ramsey – financial coach, radio host, and author – reminds us, average sucks.

How much of your income do you save?

What are you doing with your savings?

  • Buy assets. This sounds simple, right? Buy things that pay you. Buy things that get more valuable over time. Buy things that help you to buy things in the future. Dividend paying stocks, rental properties, cash-flowing businesses. All assets.
  • Don’t buy liabilities. Just the inverse. Don’t buy things that go down in value or depreciate over time. Don’t buy things that cost money to upkeep, and cause you to spend more money. Personal homes, boats, cars, electronics are all liabilities.

Return on Equity. We do all kinds of complicated business cases, and financial models for our clients, yet, when is the last time you applied that level of rigor to your finances? Are we eating our own dog food? Are we getting a good return on our equity?

Return on Time. As I get older, I think this is even more important. Time is the only thing you cannot get more of. Are we spending our professional and personal lives on things that give us meaning, move us in a forward direction, and make life good? Retirement is more than just having enough money to do nothing – it is NOT HAVING to work, and putting time to only the things you want to.  Amen.

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