Not Far From It Now

If you have ever thought about retirement, let me scare you a little with some statistics.

Over 80% of people approaching retirement age have less than $25,000 in savings according to AARP. This is after over 20 years of tax favored savings plans such as IRAs and 401(k)s.

Over 40% of people approaching retirement age have less than $1,000 in savings. This is practically nothing.

About 87% of working people are living paycheck to paycheck. This means a person who rents can be 5 to 10 days away from homelessness. A person who owns their home can stretch that out to 3 months only because of the foreclosure process.

Do I have your attention yet? Why are so many people living paycheck to paycheck and approaching retirement age with little more than a hope that things will work out? For many Baby Boomers, it was called life. Many Boomers had good intentions of saving for retirement but events such as a layoff, divorce, higher college tuition for their children, care for aging parents or prolonged illness or injury caused them to scramble their nest eggs to survive now.

I would like to advance the thought that saving for retirement sounds good but, when you actually look at it, a large nest egg is not necessarily what you should have. The purpose of the nest egg is to provide income when your work income stops. If you don't have $1 to $2 million in savings so that you can live off only the interest, you actually are starting a race to see which gives out first - you or your money. Judging from the above statistics and modern medical advances which keep us living longer, most of us will run out of money first.

There is a solution that can be implemented at any stage of your life. What you need is income. Many people are only familiar with the linear income they receive from their job. The problem with linear income is if you stop, it stops. It's like running up a down escalator.

The key is residual income. It's income where you do the work once and you keep getting paid. Some of the more familiar examples would be the royalties from writing a book or producing a movie. What do you do if you don't have a best seller?

Start a home based business that offers residual income. You can start this at age 25, 45 or 75. By choosing a good company with good products that you believe in and by being teachable, within 2 to 5 years, you can achieve an income that covers your living expenses. At this point, you are financially independent.

The income is also under your control so as your desires and requirements grow, so can your income. You will not be limited by a "fixed income."

The residual aspect covers those periods when you can't work or choose not to work such as an extended vacation. This is the up escalator.

I would like to toss in one last important concept and that's leverage. Many home based businesses offer you the opportunity to leverage off the efforts of other people. If you were able to leverage an hour a day from 100 people, that would be 100 hours of benefit in a day. Your personal effort will be higher in the beginning with less results, but later you will put in less effort to reap much greater benefits.

By creating your home based business, you can also take advantage of many of the great tax advantages. You can turn many ordinary after tax expenditures into pre-tax business deductions. This can also speed your results.

A home based business is also an asset that can be passed to your heirs to provide long after you are not around.

As you can see, a home based business can be an answer to being able to comfortably retire even if you don't have a nest egg saved up.

Rick Rule has enjoyed securing his retirement at an age when most people are wondering if they could ever retire. He enjoys helping other people secure their future. For more information, visit his site at http://www.StartLateFinishWealthy.com

AP - Oklahoma officials say a typo resulted in a state employee receiving a bonus of $850,000 - but it was only temporary.