One of the big things I’ve been chatting to people about over in my brand new PATHWAY programme, is how to create perpetual income.
Why?
So you have enough money, that lasts for as long as you need it!
You can probably tell this is something I’m massively passionate about. There’s much more detail in my book too, ‘Have Life Your Way’ (you can grab a copy here!).
It’s just SO important to focus on creating perpetual income now, if we want to make sure that we can live our retirement years in the level of comfort that we want and expect.
We’ve worked hard to get to where we are now. We’ve got a great standard of living and I don’t know about you, but I don’t want to give that up when I get to retirement (or at least the time when I want to work less hours and slow down a bit).
Having a pot of money to use in your retirement is great. Providing you’ve done the maths right, you can end up with a pot of money that you can dip into year in, year out. If you manage what you’re up to, hopefully the pot won’t run out before you die.
But what about creating perpetual income? What would that look like for you?
What I’m talking about here is having your money growing over time – usually in an investment like a pension or an ISA or investment bond – and taking out just the growth at a level that means you’re not eroding the capital.
Now, in the old days, they would talk about a 4% rule. Now they’re saying it should really be a 3% rule, which is more reliable in this day and age.
The idea is that providing you take out less than 3% or 4% of your pot each year, there will always be enough growing and generating in your pot so that you don’t run out of money. Which means that the full value of that pot (give or take) is available for you to pass on to the next generation.
BUT if you get your maths wrong, you can find that you do in fact run out of money. And then maybe you have to downsize your home or work part time or cut back on those fun things you really want to do, because you just haven’t got enough money to sustain the lifestyle you really want.
Creating perpetual income is the third stage of my PATHWAY process that I work through with business owners in their 40s and 50s, who are looking to create a sensible retirement plan from the money they already make.
Ultimately, the goal is to have enough money to live the life we want and have security for the future. And I promise, even if you’ve never started paying into a pension before, it really is entirely do-able!
But there are some things that need to happen first.
Stage One of the process is about creating rock solid foundations – by which I mean making sure that bills are being paid on time; creating a financial safety net behind the scenes; and getting the systems in place to make sure that we get paid from our business in a way that eliminates money stress and worry.
Stage Two is then about building stability within your business and regular income, so that you can actually see what you’re doing. It’s about finding ways to boost your profit now, to free up more money to put towards your future objectives.
And then Stage Three, we get to work on creating that perpetual income. We need to look at what you’ve got in place, what you’re going to need when the time comes, and how to successfully close that gap.
It might be that we look at pensions. But increasingly with business owners, we look at other sources of retirement income, because they can be a way of drawing out more money, paying less tax and having more flexibility in your later years.
Of course, I do completely understand that all of this can sound pretty daunting. They don’t teach you about pensions and investing at school and if you try to start figuring it all out yourself, it can feel like a confusing minefield to try and navigate.
Which is why I’ve created this PATHWAY process, to guide you through it all step by step – keeping everything as simple as possible and giving you the practical support to take actual action and get it all sorted!
If you want to find out more about PATHWAY, just click here now for all the details. Or if you want to book a short call, to see if it might be right for you, here’s the link and we can chat it all through.
Ultimately, now really is the time. I know that’s a cliché and everyone says it, but it’s never more true than when it comes to your financial stuff. Because every day that you put off getting started is a day that your money can’t start to grow. And the days really do add up!
Until next time,
Claire