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Ben Kingsley Blog post by Ben Kingsley

Income Level isn’t a Death Knell to a Prosperous Retirement

I love my job; I go to work every day in the knowledge that my team and I are making a positive difference to our client’s financial situation every day. For those new to my commentary, I talk about our business not being in the financial services and property industry, but rather I think we are in the ‘Lifestyle’ business.

Let me expand on this point – by ‘Lifestyle’ business I mean we advise people to create a greater level of wealth and income to enjoy their desired lifestyle more. It’s simple really, the more money you have the more choices you can make with it. From better care and education for your family to the spoils of an earlier retirement and sound income for whatever you want your retirement to look like.

Simple message, simple reason we are in business… but the reality is it’s not easy! If it was easy then everybody could do it and it comes with real challenges – some you can control and others you can’t.

In this monthly comment – I was to get the message out there that it doesn’t matter what income you might have available in your household, there are ways in which we can advise you to help that money work harder for you. Whether it’s as simple as helping you better manage your money to save or pay down debt, through to building an extensive financial and investment plan to get you to where you want to be tomorrow.

I have clients that I’ve been working with that have bought a home, when they thought it was near impossible. Their future is looking better as the value of their home is growing over the long term, instead of being caught in the rental trap for life. These people may not have had much to put together, but they did set themselves a goal and we planned it out to make it happen and it did.

I have also had meetings with prospective clients, who are on huge incomes and yet they couldn’t find a mean to make their money work as hard as they did to make it. The shock for these folk is, if they keep spending this money now and not put anything away for the future, there is a very high probability that they will be on significantly less income in their retirement years, which will be a huge lifestyle adjustment for them and it will be something they will struggle to accept. Again, I have a simple message here and its all got to do with surplus household income. With it you have options, the more you have of it the better your options may be, but if you choose to use it on discretionary spending today and for the extended period you are sure to realise sooner or later a poorer financial position and outcome.

So you could be on a household income of $150,000 or more a year, and only have a surplus income of $12,000 a year – or you could be on $80,000 a year and still carve out the same surplus income, which will give you better prospects for a significant improvement over the long term in your financial position. The reality is that if you can manage your money to allow for a surplus each month, then you will have real options about how this money can be managed and invested to make more of it.

It’s clear… the more money you earn the greater the ability to make it a significant amount for you, but in truth the statistics prove that all those Australians who have been on significant incomes for many decades aren’t translating this income into a significant wealth base for retirement.

In fact, of the retired population assessed by the ABS back in 2009 – less than 10% had incomes greater than $46,000. Scary isn’t it! The bottom line is try to carve out a surplus and ensure you use this money wisely and things will happen for you. Don’t just live for today.

Knowledge is empowering if you act on it.

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