financial trap

Let’s face it.

We have all been trained to go to college, get good grades, get a good job, work till we are 65 (or 70), retire and then enjoy our “golden years” to the max.

Notice how I used quotes around the words “golden years”?

Yes, I did that on purpose.

The problem is that by the time we are 65 or 70 years old, we have long passed our golden years.

By that age, people are extremely tired.

Tired of working for 40 years.

Tired of paying an endless stream of bills.

Tired of supporting (financially and otherwise) their families.

And tired of making the government, the car dealership, corporations and the banks rich at their own expense.

Add to that the looming threat of illnesses that come with that age as well as the reality of decreasing income, and have a very realistic picture of why that age wouldn’t exactly be our golden age.

However, billions of people (literally) consciously or subconsciously subscribe to this ideology.

Why?

Because they don’t give this “lifestyle” choice much thought.

They simply go for it because “everyone else is doing it so it must be right…”

Right?

Wrong.

 

In the words of Mark Twain:

“Whenever you find yourself on the side of the majority, it is time to pause and reflect.”

 

See, the fact is that numbers don’t lie.

Numbers usually have an uncanny habit of painting a brutally honest picture, whether we like it or not.

And for this reason, I want to share a scary statistic with you, which will probably give you a couple of sleepless nights, if you are the type who cares about your future.

The good news is that this ONE statistic will help you make a dramatic change in your lifestyle so you won’t fall into the same trap which has plagued the world at large.

In fact, if you really take it to heart, you will be able to find ways to dramatically change your life.

Ready for it?

 

Here it is:

According to the Social Security Administration:

If you take any 100 people and follow them for 40 years till their retirement age.

Only 1 will be wealthy.

4 will be financially secure.

5 will continue working not because they want to but because they have to.

36 will be dead.

And 54 will be dead broke, dependent on their meager social security checks, relatives, friends, even charity for a minimum standard of living.

 

I would like to you take a moment and read the above paragraph at least 3 times.

Allow a moment for it to sink in.

Now ask yourself “Where is my current lifestyle leading me?”

Chances are, you won’t be happy with the answer.

The unnerving part is that this statistic includes people who had been earning over $100,000 per year.

The problem was that as these people approached retirement age, they had almost no savings to fall back on.

“How is that possible?”, you might wonder.

 

Here’s why:

  • They were trading time for money at a job which was actively making other people rich.
  • They were doing what everyone else was doing.

In order to fully understand how the “trap” works (and to avoid it), we have to look at how a typical person leads their life.

 

Here’s how it usually goes:

 

Age 0-18: Go to school and get good grades.

Depending on the country you live in, this education is either free (US & Canada) or your parents probably paid a good chunk of their income for your education (Pakistan).

 

Age 18-25: Get a Bachelors or Masters degree.

Once again, depending on where you are, you can either get a loan to finance your higher education (US & Canada) or your family has to pay a hefty amount.

If you take out a loan for your education, it takes 8 years on average to repay the loan, along with the interest which keeps on accumulating the longer the loan is outstanding.

This makes the banks rich at your expense.

 

Age 25-65: Work 9-5 for a living.

You finally land a decent job and start climbing the corporate ladder.

You have income coming in.

But you also have to pay taxes.

At an entry level position where you earn around $30,000 to $50,000 a year, you are taxed at 16-26%.

However, with age you start making more money and that is when the government really benefits from your efforts.

Over the income of $100,000, your tax rates climb to 46-54%, depending on where you live in the world.

Highly-paid individuals such as lawyers, doctors & investment banks earn over $250,000, which can be thought of as a respectable sum until they factor in the taxes.

People in this category work 5-7 months a year just to pay the government.

 

Age 25-33: Get married, settle down & start a family.

Even though getting married doesn’t have to be costly, most people spend a lot on weddings.

The average wedding cost in the US is $33,391.

This number is roughly equal to the median annual salary in the US.

And of course, if a loan is taken out to pay for the wedding, it normally takes 3-6 years to pay it off (with interest).

Then of course there is the expense of buying a house after marriage.

Notice I said “expense” of buying a house and not “investing” in a house.

The truth is that the house you buy & live in is a liability.

This is because you keep paying the mortgage, property taxes, repairs and maintenance, utilities etc. to keep it running.

And depending on how much of a loan you take to finance the house, it will take you anywhere between $94,000 to $365,000 to pay just the interest on that loan for the mortgage term, which is usually 25 years.

Let’s bring a newborn into the picture.

Research shows that it takes an average of $233,610 to raise a child from the age of 0 to 17.

And that’s just the average dollar amount – it could be higher.

 

Age 33-65: Work hard, buy liabilities & make others rich

Once you start a family, other things come into play.

Toys for the child.

Buying a brand new car.

Going on a long vacation.

Paying higher & higher percentage of your income in taxes.

All of this has one aim: To make the other party rich at your expense.

 

Age 65-80: Wind down and “enjoy the golden years”

You retire at the age of 65 & start drawing on your retirement fund.

When you take money out of the fund, you pay taxes again, because this “withdrawal” is treated as your income.

Because you don’t have a job anymore, you have to minimize your monthly expenses so you don’t outlive the retirement fund.

However, after 65, your health expenses increase exponentially.

The health insurance only pays for part of those expenses.

You have to finance the rest.

Also, depending on how your retirement fund is doing, you might have lost a considerable chunk of it to the stock or bond market.

 

Unfortunately, this is the lifestyle pattern which keeps most of us a slave to the system our entire lives.

 

If you have taken time to reflect on this article, you would have come to a realization:

The vast majority of poor & the middle class spend around 40 years of their lives making others rich at their expense.

And you would be right.

 

This vicious cycle gives rise to thoughts like:

“Where did all my money go?”

“I have been working hard for the last 10 years but I am not getting ahead financially…”

“If I lose my job, I will be in big trouble…”

 

The good news is that once you have the realization, it is fairly easy to turn things around.

See, the truly wealthy do not fall into this trap.

Why?

Because they simply do not subscribe to the same ideology which has plagued the masses.

For that reason, they don’t have the same problems everyone else does.

 

The wealthy follow this ideology:

  • Don’t work for money (i.e. 9-5 job) – instead, create passive income from businesses, dividend stocks & real estate.
  • Don’t buy liabilities (such as a fancy car, a big house)
  • Become financially intelligent (so you can make money without “working” for it)

 

Once you start following this ideology, good things will start to happen for you.

I have created an extremely detailed 7,812 word guide which will explain how you can create passive income and retire in as little as 3-5 years.

I would suggest you take 60 minutes out of your day to read it.

You never know, this guide just might be your ticket to financial independence in a world where the everyone is “programmed” to fall into the dreaded 9-5 trap.

 

Also, I would suggest signing up for my free webinar and email course which teaches you how to:

  • Think & operate like the truly wealthy
  • Create passive income from online businesses, dividend stocks & real estate
  • Become financially independent in 3-5 years.

Just scroll below this post & enter your name & email to sign up for it.

I hope this article helped put things into perspective for you.

Let me know what you thought of it by commenting below.

Leave a Reply

Your email address will not be published. Required fields are marked *