Planning For Guaranteed Income

One thing you want to plan for in life is so that you want to plan because it's not going to happen by itself. You want to plan to have income, you want to make that, you want to guarantee. How can you have peace of mind about your future if you don't feel like you've got a plan to make sure you got income coming in? You got to look out for yourself. Can't always be sure you're going to work, can't always be sure going to be alive to support those around you now or even in the future. But you're going to know that people who depend on you for support are going to need income regardless whether you're around or not and when you're for sure going to need the income you, if you could work or not. So how, how does this thing go? As you go for your life, there's different stages you go through. And the key to understanding how this works is there's a theory, it's called the decreasing. You hear about this in the financial world by people who know what they're talking about. Decreasing responsibility theory. Rather than waste your time, I'm learning about all kind of technical sponsors, possibility theory. It's important you spend your time understanding the things that's really going to impact your life. So again, if we looked at life and we said, okay, we've got a grid going here, this is the money chart, the money side of it. And then we look at, okay, the pattern of your life. These are years going forward. This is now when you, let's say you get, let's assume you're getting out of school, you know, you're getting started having a family, having kids, buying home, you know, you're on the, on the start outside of life. And then down here, down the road, hopefully you're going to be at some point able to retire. And so we're at the retirement stage. So it's great to get a picture. How can you make decisions if you don't have a picture in your mind of how life works? Well, here's how it works regarding income and guaranteeing income for yourself. When you're starting out, hopefully you're going to get a job, you're going to have an income. You have income, but you have no assets. You haven't had time to build assets. You know, it's sucking up all of your money just to get going. You might have a few dollars, you've started saving, accumulating, but hadn't had time to compound. When you get over here to this side of retirement. You're not going to have an income unless you just decide to keep working and you're able to work. You know, your body thinks that's a good idea and is still able to do it. But income is going to be in the, probably in the at least plan to have no income. It's great not to have to depend on your income in retirement. But hopefully if you've done things right, you will have assets. Now how this works is like this. You start off with lots of obligations, lots of obligations. As you go and you buy homes and you get married and you have kids, lots of things have to be covered. Now as you go out and have your children, your family, as they get older, you're paying on your house, you find that your obligations diminish over life. They go down. Used to, they used to support the kids, live in your house for, you know, first 18, 20 years or so, go to school. Now hopefully they're out by 35 or 40, but eventually the suckers are going to move out and they're going to be on their own. They can pay their way anyway regardless. But so your responsibilities go down, you've had a chance to pay those things off. And hopefully if you've had a plan, even if you start with small amounts of money in a stable fund, I won't get into talking about where to put it. But something stable gives you a good return over a period of time. That stuff, it starts small, it seems terrible, but it starts to add up. Where you know what this is? This is your assets. Another way of looking at assets is you are self insuring yourself now over here. Since you have obligations but no assets, what do you have to do? Well, that's when you get your insurance. That's when you get your life insurance. Why? For one reason only. Forget about this thing for investments, everything for one reason and that is to protect against the loss. The loss of what income. Because you have mouths, fees, obligations to pay. You got those income that those income obligations going to be there whether you're there or not. So you don't wring your hands, you don't have sleepless nights. You go and get the best term. Not whole life, not endowment, not single pay. That's high price. High price, high price. These are versions of saying high price. You get term insurance because you're paying just for the insurance for a period of time. And you're going to hope that all that you live. He got a 30 only a 1/3 chance of dying before, let's just say retirement age 65, who knows when it is anymore. But you only have one third chance of dying. You have 2/3 chance. You're probably going to live. So you need to plan for that. So that's why you want to be building up the assets and to make take to take totally immediately with a stroke of pen, the worry about income before you're self insured. That's why you get the life insurance policy. But you don't waste, you get term insurance. You don't waste money because you excess money because you hope that that's not going to come into play. You're just hedging a bet. You're being proactive. You know that you are not God and you know that you have a chance like anybody else of not having the full life. And if it doesn't, you want to make sure the other people who are counted on you that their life can go on. No reason for their life to be over when yours isn't. So you go in there and you get yourself an insurance policy. But you're not going to be having that forever because you're working off your obligations. You know, you want to provide for your spouse, but your spouse is not going to have as long to live. That mortgage is going to be increasingly paid off. Those kids are older, they get to where they can pay themselves. So your obligations roll down. They're at the highest they'll ever be when you're young. So that's why you have your coverage drove a pin. You take that out of play. But you're not going to have that as an issue forever because you're going to start self insuring yourself. You're going to buy time through investments. You're not going to go out and buy a shopping center right off the bat, but you're going to start doing some smart, simple, regular things and getting that compounding effect starting to work for your money because in the beginning you don't have any money compounded. But as you get money in there, it starts growing even faster because you got interest off of what's already in there, combined with the new you're putting in there grows faster. So you're going to reach a point of where you are somewhere down the road, depending on when you got started, how much you could put in there self insured. Now at that point you don't need, once you're self insured, you don't need life insurance anymore. You may for tax planning purposes keep it, but you don't need it because you've taken care of you built assets. See, that's the idea of the decreasing responsibility theory. Your responsibility goes down as you go through life and your assets come up. So you've covered your responsibility by building assets and working off the obligations from raising a family, paying off your mortgage, things like that. So this is the theory of decreasing responsibility. You need to have that in the back of your mind so you can justify a couple of things. You can justify, number one, getting number one, you can justify getting some term coverage because you're not going to be doing it forever. And you can also justify and making this a priority and the other thing, making this a priority, looking out for number one, putting the dollars in there. Even if it's, you know, 50, $100 a month, keep the habit going, keeping it in there. Don't touch it, get it in there, forget about it, let it grow, let it mature like an oak tree. And an oak tree is going to grow slow. But you look at it, in 20, 30 years, that's going to have a nice shade to shade you in your retirement, shade you from the sun. That's what your money will do. So if you understand how this goes, you'll make it a priority. You won't begrudge yourself doing it because you'll know it's got value for you. And so here is the value of understanding that decreasing responsibility puts you in a position to make smart decisions about your money, smart decisions about how you position yourself so that you can always have guaranteed income. You and all the people around you that count on you for support can have, can know they're going to have income coming in and you know you're going to have income. So maybe it's frustrating, maybe it's exhausting to you, you know, to go through all the every day working and saving and seems to be, might be a little boring for you, a little grind, but you're going to know, hey, this is how you turn out and turn out a winner financially in life. You're doing the things that put you in that rare percentage of people that come out with a smile on their face. No, I am not going to grow a smile, smiley face, but puts a smile on your face when you reach the retirement era. And know that along the way you have take, you have made sure that if anything knocks out early that people are counting on you for support, they're going to have guaranteed income too. That's the theory of decreasing responsibility. And that's the power it can play in helping you do the right things, make the right decisions as you do your financial planning, going through life.