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Retirement and the Five Percent Return

All your life, you have likely been exposed to the concept of retirement. Save for retirement, you are told. Plan your life and your finances intelligently, so you'll have enough to last you in retirement. While this may all be very good advice, have you ever stopped to consider the pre-assumptions involved? It may seem intelligent, but it actually assumes a lack of intelligence in all of us.


The entire concept of retirement is based on an antiquated system, where people used to work for one company all their lives. These loyal employees would work hard, build their pension and eventually retire and enjoy the benefits of those pre-paid and usually government-subsidized pension payments. In their golden years, the many decades of hard work one put in would be rewarded with time off and some income to ensure they would be OK to enjoy it.

We all know the dynamics of the workplace have changed very significantly, with more people changing jobs regularly, tasks being effectively outsourced and individuals choosing to consult rather than be employees. One can no longer rely on any corporation to provide for their future; we are each truly responsible for our own financial well-being.

Is Retirement a Four Letter Word?

There is a further issue to consider here, one that is largely unspoken, and that is the pre-assumption that you will have to work until you are old/er. It is presumed that you will not have or take control of your finances and create an asset base to serve you. You are not smart or capable enough to come up with ideas on your own; to start a lucrative business - or five! What about investing? Not 5% investing but 1000% investing? It is presumed that you will remain ignorant financially and will have a long, slow slog towards a day when you can finally (if you're lucky! - and have been good) quit your job and enjoy a little freedom. You, the average citizen, are not smart or capable enough to figure out another way. You believe (and will continue to believe) that the rich are just 'lucky' and that it is impossible or very difficult to become wealthy.

That the same institutions who perpetuate this myth purvey 'financial freedom' products is a cruel joke. The retirement industry keeps people ignorant and relies on that ignorance to continue selling low-yielding products such as GIC's, bonds and mutual funds. Has anyone ever told you to invest in bank STOCKS rather than bank products? Investing in bank products keeps the bankers laughing all the way to the bank.

5% = 0.05

The key to financial freedom, as I mention often at my new blog Women & Money, is EDUCATION: education that is applied with confidence and persistence. The internet has made it so easy to obtain good financial education that there is no excuse to be ignorant any longer. [Hint: Try investopedia.com and the myriad financial sites such as CBNC and Yahoo! finance for a start.] Even without the internet, we have libraries full of FREE books on everything from various stock market strategies to real estate investing and more. Further, there are means to wealth that the mutual fund companies and banks never mention. Now why is that? It's because they NEED naive investors to continue buying their products so they can - literally - bank the profits. Have you ever considered what they do with your money to make themselves more of it? Money can grow, and should.

Many people find numbers boring or intimidating, on top of the fact that they believe they have no control. However, control and freedom are within the grasp of each of us, if we only reach for them with determination. The incredible joy and hope you will feel when the 'numbers' go from boring or scary to beautiful - because they represent the wielding of control and understanding - is second to none. It is empowering, inspiring, and something we should ALL feel.


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