How do you guarantee you’ll have social security income for retirement? There are 2 simple steps in a cash flow plan to create your own social security savings plan. But first you need to understand this one simple concept about money and your cash flow.
The one concept you need to know is what the word economics really means in relation to what you are trying to achieve financially. Now don’t get all nervous about this word economics. The fact is, the definition used by the media, banks, governments and even educational institutions, is the incorrect definition for what an individual is doing with their money, their cash flow management practices, when I talk about economics.
Economics originally meant the art or science of managing a business or household. Social security, meaning your personal financial security, can be guaranteed by following a good cash flow plan with your own money.
To practice the real art of economics in your household or company there are 2 basic principles you have to understand in order to create your own social security program:
1) Make more money (bring in more cash flow) than you spend, and
2) don’t waste the cash flow you bring in. Let’s look at just one of the methods that you can use to accomplish this one.
We all shop and spend money. We, here in the United States especially, are addicted to “instant gratification” meaning when we want something we want it NOW and will often forsake common sense when buying. Where is it written in stone that you have to pay full retail price? That’s a concept that we’ve gone into agreement with here in the United States. The rest of the world practices bargaining and is better off financially because of it.
Is there a way to shop that makes you wealthier? Sure. Try to buy items from a wholesale store, or better yet, buy the item direct from the manufacturer. This takes some scouting and time, but thanks to the Internet it is easy these days to do your homework. You save rather than wasting your cash flow. Make it a personal wealth building game game!
Want to play? Okay! Decide what you want to buy. Next, check out the retail price, the distributor price, and the manufacturer’s wholesale price for the item. To get wealthier, use your most imaginative investigative skills to find where to buy that item at the most acceptable quality and at the lowest possible price.
Take the money that you saved because you got a great price and invest it toward your own retirement savings plan. Doing this on just a few major items can make a huge difference in how much your retirement portfolio is worth when you retire. You will be able to pay yourself a retirement sum more assured and much, much larger than the government program social security checks!
Here are a few examples:
Why shop for a new refrigerator costing $900 at a major appliance store? Why not go to an appliance outlet store and buy a similar one with a full warranty for $450? That leaves an extra $450 in your bank account that you could stash away for your retirement. You were going to pay it to the appliance store, so why not pay it to yourself instead?
As another example, don’t be misled by the big ON SALE signs at the full retail price stores. A friend remembers when he worked in a men’s clothing department store. This retail store set a “sale” price by doubling the retail price of the item and then marking it off by 40%. By doing this, they could mark the items “on sale” and charge 60% more for the items.
A colleague who is a business consultant, lives by the motto, “never pay retail.” He told me the story of shopping for bedroom furniture with his wife, looking at a bedroom set costing $2,000 “on sale” at a modern furniture store that has poor quality veneer over fiberboard. Instead, they bought a beautiful 40-year-old, solid hardwood, finely crafted set for $600 at a consignment store. That saved him $1,400 on something that is used for a few hours each day. He also got quality furniture that will last more than another 40 years.
A friend of mine bought a $25,000 car, 2 years old, in pristine condition, with very low miles on it for $13,000. She purchased it through someone who buys for private individuals straight from the used car auctions. Rather than buying a new car, if you do this a few times and invest the difference in a program that pays you interest, dividends and grows over the years. I bought my car that carried a %29,500 price sticker for just $17,500 by using tough negotiating and because I was paying cold, hard cash on a day when I was the only customer on the lot during a big sales event.
Use this tactic every time you shop, because even the smaller items can really add up over time. For example getting your teeth cleaned every 6 months. If you don’t have dental insurance and you pay cash, ask for a cash discount. Many dentists have a program of giving 10% off to cash paying patients. A friend of mine recently bought 4 new tires for her car at a local shop that offers free wheel alignments for as long as she owns her car. That saves her a whopping $125 once a year when she gets her wheels aligned and it keeps her tires from wearing out.
Can you see how your self-created Social Security savings plan can grow over the years by doing this? How many more things will you buy and pay full price when you probably don’t have to?
In the coming months, using smart cash flow management, some people will have true financial security. Others will always ignore the best advice, continue to spend too much of their cash flow unnecessarily, and will end up with lots of “stuff” but no financial security at all.
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Cash Flow Plan – Create Your Own Social Security Savings Plan