Why Young People Should Think About Retirement NOW!

Written by: MoneyPrime Staff
07/22/2019

retirement-planning

Social media has created a trend that has allowed many young people, and some old as well to benefit from the possibility of connecting with millions of people instantly. Personal trainers and gym models have hundreds and thousands of followers and so they become “influencers”. They are then hired and sponsored by certain brands who know that they will make a lot of money if they have these influencers promoting their items. There are other people too who have businesses, others who work, others who are still in college, and those young people in middle and high school who may never learn about finances. Because we live in a financial world and will continue to do so, we want to give young people a leg up by writing this article where we will be discussing why you should be thinking about retirement right now. We will also be giving a six-account method to make your retirement much better than it could be.

So why should a young person start thinking about retirement right now? You may be thinking, “but I am barely 18, 19, 20, 25, 30, why should I be thinking about my retirement if I still have decades to live. That is the exact reason why you should make a plan right now! You don’t want to wait until you’re 50 or 60 to think about what you will have to do to retire when you’re 65. No, we want you to think about that right now so you can retire much much earlier and really live the life that you should be living. Too many people have gone without thinking about this and now work at Walmart or some other BS job because they simply got old and didn’t have a plan. Yes, social security may help you, but it’s better to take things in your own hands and take control. So how do you do this? By using the method that I learned from a book called “The Millionaire Mindset” by T. Harv Ecker, someone I consider a mentor.

In his book he explains why everyone should be using this method right now to improve their finances in the short term, to plan for their families in the future, and to be able to retire when the time comes, and even leave a legacy for your grand-kids. So here are the six accounts or six jars that you should have:

  • Necessities Account
  • Financial Freedom Account
  • Long Term Savings Account
  • Education Account
  • Play Account
  • Give Account

The necessities account should contain about 55% of the total money you earn. This money is to be used for things like food, shelter, clothing, laptops, phones, gas, and anything else that you need on a day-to-day basis. Some people can live on more or less of the percentage listed, so it’s up to you to divide the percentages, but the six accounts should total to 100% of all the money you earn. It’s simply a way to divide your money so that you don’t spend it all on stupid things.

The financial freedom account is the account you will use for your foundation of retirement. This account will consist of 10% of everything you own which will then be invested. This money should NEVER be touched as it is supposed to create compound interest so you can live off this interest when you can no longer work; when you’re retired. Compound interest means that you leave all the money in the account. The interest it makes stays in the account which allows for more money to be invested, which will create larger returns, which means more money to be invested, which means more returns, and the cycle continues. But if you take money out, then you cut the cycle off. So don’t take money out of this account until you’re 64!

The long term savings account is meant for spending later in life. You will put another 10% of all the money you make. The main objective of this account is to have savings to use later for large expenses such as a car, a vacation, for paying off debts, etc.

The next account is the education account. Here you will deposit another 10% of everything you earn. This account is meant to be used strictly for education purposes which could be attending seminars, purchasing books, hiring coaches and mentors, and any other professional development that will provide you with real-life skills and/or information you can implement to make more money to put into your other accounts.

The fourth account is for play. This is the leisure and fun account which will contain another 10% of everything you earn. This money is to be spent however you like. Going to a bar, to the movies, renting jet skis, skydiving, buying Starbucks, purchasing a drone, etc. Have fun with this account and don’t feel bad about spending. Another thing; this account should be spent in full every single month. Why? Because it creates a subconscious wealth habit in your mind. You can spend and have fun and still have another 5 accounts with money in them. Most people spend all their money on the play account and don’t know why they’re broke.

Finally, the sixth account should be used to give back and will contain 5% of everything you earn. Give in whichever way your heart desires, more money will come back when you give from the heart.

Conclusion

The beauty of this system is that it allows you to divide your money up into six different accounts. You can open six different banks or three banks with checking and savings accounts to have six different cards which you can customize to know what they’re for and separate everything you purchase into these accounts. Wealthy people make sacrifices so if you feel like you can’t divide your money and manage it this way, then you will never become wealthy and your retirement will be miserable. Please make the wealthy choices 🙂


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