Don’t eat all your seeds

With farming, if you want to grow a large crop, you can start small and work your way up. If you begin with a handful of seeds, you have a choice: do you eat the seeds now, or plant them in the ground? If you eat them, your crop is gone… game over. If you plant them into the ground ground, each seed has the potential to grow into a new plant and produce even more seeds. You are then faced with the same question: do I eat the seeds or plant them? A farmer who is diligent enough to plant those seeds year, after year, after year can go from a handful of seeds to a large field of produce. To succeed, you need two things: 1. a disciplined commitment to planting seeds rather than eating them all, and 2. time for your crops to grow.

Something similar is true when it comes to investing. With discipline, we can invest some of our money diligently over time. Doing this allows us to put money to work for us and grow over time. The problem is, we are often tempted to eat all of our seeds (our income) rather than sow it back into the ground (investing for the future).

Not Yet Retired:

If you aren’t retired yet, you are still in a stage of “wealth accumulation”. The big challenge you face is finding a disciplined approach to ensure you have the right balance between eating and sowing (spending and saving). You want to spend and enjoy life today, but not in such a way that you’ end up struggling to get by in your 60s. Conversely, you don’t want to over-save today so that you have an amazing retirement, but you never enjoy your current stage of life. Ideally, we want a nice balance between our pre-retirement and post-retirement years.

Your most important questions to answer:
  1. Am I saving enough for retirement?
  2. Am I saving too much for retirement?
  3. Is my investment allocation appropriate for building wealth effectively?

Already Retired:

If you’re already retired, your biggest challenge is to make sure you don’t run out of money before you run out of time. You need to be sure that you’re eating a sustainable amount of seeds so you still maintain enough to plant for your future needs. In financial terms, don’t take too much out of your accounts or you’ll run out of cash. This is where a well-planned cash flow analysis can help put your mind at ease. At StrongTower, our goal is to find the most efficient distribution order and amount to make sure your funds last as long as you live.

Your most important questions to answer:
  1. Am I taking too much money out each year for retirement?
  2. Is my investment allocation designed to provide income?
  3. Does my plan allow for increases for inflation?

Regardless of your stage of life, the important thing to do is plan for success. Plan so you save enough for your future needs and plan so you don’t go through your savings too fast and run out of money.

So, what’s your plan?

Need a plan? Put our trusted advisors to work for you. Let us help you find the right balance in life.

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Schedule a free Discovery Meeting with one of our trusted advisors to see if you’re setup properly for retirement.