Just as an artist begins to lose touch with a painting if he does not step back and look at its overall image, most people lose touch with their financial situation if they are not always “stepping back” to look at the big picture. The map of the United States shown here helps further illustrate why it is so important to look at the big picture:
Notice that a star has been placed right in the middle of the map. In order to get to the point on the map that the star represents, there are two things you must know. First, you must know where the star is. Second, you must know where you are located in order to get to the star.
If you don’t know how much money you spend each month, or what your real debt load is, you don’t know where you are on your financial map. In addition, if you don’t know how much money you need at retirement or how you are going to reach that goal, then you don’t know where your star is on your financial map.
The two most important things you need to know: where you are and where you want to go! It’s that simple.
To reach your own star, or your financial goals, you must know how far away those goals are and where you are financially in relation to those goals. Money Mastery’s Principle 7 teaches that it is so important to always look at the big picture so you can reach those goals.
One of the best ways to get a big picture view is to consider the true definition of retirement:
“The point at which you will have enough passive income to wake up in the morning and elect to work or not.”
Retirement is not a number and it isn’t necessarily going to happen magically at age 65. Retirement will come at a different point for each person. Some people who can afford not to work, may decide they still want to, even into their 70s and 80s. If work is your thing, great. But it shouldn’t be something you must do in your old age because you haven’t stepped back to look at the big picture earlier on.
For some retirement is when they can spend more time with family — children and grandchildren, or traveling, providing volunteer service, or just puttering around the house without the worry of having to work. Whatever “retirement” means to you, be sure you will have enough passive income when it comes time to fulfill those dreams that you will have the luxury of being able to do them.
For more information on how to set up a predictable retirement wherein you cannot outlive your retirement savings, contact the experts at Money Mastery today.