7 GENIUS Things Retirees Do With Their Money

in this video we discuss seven genius things that retirees do with their money coming up next on holy schmidt holy schmidt there are too many articles and videos out there that tell you to do the following if you want to be successful in retirement pay off your credit card pay off your mortgage join a discount club buy income producing assets and delay social security these are all sound recommendations and should be considered by every retiree but that list is pretty common what you're going to hear next is both smart and effective but the list isn't comprised of things that you hear of often and my guess is maybe for many of you this is the first time hearing some if not all of these it's also worth pointing out that genius doesn't mean complicated it means effective in the context of how we're using it in this video so the points up next are designed to have massive impact and reasonably easy to execute but their genius comes from follow through like most things in life ideas are good action is better it's also worth saying that this list is not all inclusive if you have something to add please add in the comments section below so that others can learn from your experience as always i'll remind you at the end all right let's get going point number one is build a 30 to 45 day cash buffer in your cash flow one of the most widely opinionated points in personal finance is the cash flow buffer this is often confused with an emergency fund the two are distinctly different although they can exist in the same account however there is something far more practical about having a cash flow buffer than an emergency fund and that is the elimination of living paycheck to paycheck which can cause all sorts of bad things to happen let me explain if you're living paycheck to paycheck your credit cards tend to get drawn very quickly and oftentimes when the next payday comes in or when the next paycheck comes in that credit card doesn't get paid down and all of a sudden credit card creep happens before you know it you're under water with high interest rate consumer debt the next thing that happens is that you miss paying bills or you pay them late which has a negative effect on your credit report and then there's the other side frankly probably more important for saving money and that is you miss the opportunity to pay things annually when you are paying them monthly because you just don't have the cash because you're paying them monthly you miss out on many many discounts example would be a magazine subscription a streaming service such as netflix or an hvac repair and maintenance contract for your home there are literally dozens of these that you can pay annually and you'll get a sizable discount every year on your cash flow and as this builds you can even increase that 45 days to 60 or even 90 days if you really choose to do so then there are the discounts that you get by committing early or buying off season travel is the most relevant here every year in january i spend time in miami beach and by committing early as in september of 2022 for january of 2023 stay i save about 50 on the cost of the hotel the same can be said about buying a central air conditioning unit in september buying your snow skis in march etc finally the cash buffer just lets you sleep better at night because you know that when you wake up in the morning you're not going to be wondering how to pay the bills when they come due in the next few days if you want to know how to build a cash buffer go to my website holy schmidt dot com forward slash buffer and there will be a quick report there for you to download and it will take you step by step through the exact process it's very easy step by step through the exact process to build your own cache buffer i'll remind you at the end so that you don't need to stop the video to go to the website now point number two is to continue to think deeply about your investments just because you retire doesn't mean that your investments retire most people confuse this point because they know that once they retire cultivation begins but still you have 30 years ahead of you in many cases so it makes sense to continue to think about where you put your money and how you use your money the fact is when people hit retirement they sometimes do some pretty silly things with their money and frankly less so with people watch these videos but oftentimes you hear about someone who loses their life savings simply because they stopped thinking about what they were doing just because you retired doesn't mean that your money has to point number three is to improve your quality of life many of you have heard about the s-curve or schmidt curve and i take you through how to spend your money in most cases in retirement how to think about spending your money anyway and it starts off on the left basically capturing the needs of your retirement all the way through the right to the rock and roll lifestyle that you could potentially enjoy if you had unlimited funds in your retirement the fact is most people spend their working years putting the needs of their family ahead of their own now is the time to take care of number one sometimes these sacrifices actually put your health and well-being at risk in order to make sure that the health and well-being of your family stays sound this doesn't mean you need to spend a lot more but the fact is improving your quality of life means that you make different choices you give up processed food fatty meats you spend less time in front of the television and more time traveling or at least need great outdoors walking take the funds that you were spending on things like saving for your kids college or saving for their clothes in the fall and replace that with something as basic as joining a health club if you feel like you need to get in shape of course your doctor first but ultimately taking care of number one now is the time to do it because you're not going to have another time besides now point number four now is the time to invest in yourself there's an over used economic term called the opportunity cost of a decision this simply means that if you choose opportunity a or option a and you put all of your time and money into that opportunity you are foregoing the other option option b because you can't be in two places at the same time and you can't spend the same dollar twice if you raise a family for example a truly noble and fulfilling outcome for many many people you forego the opportunity of retiring early if you were single and you could save all the money that you were putting into your family and investing that instead in cash flow producing assets you started working as a carpenter right out of high school to start generating money you gave up the opportunity to be a sculptor to follow your life's passion one of the best things about retirement is that right now you have more time in most cases than you had over the last 40 years and if you're going to invest in yourself now is the time to do it this means that many of the safe choices the practical choices that you made as you were thinking about and building your life with a family and thinking about what you're going to do in the years ahead need not define what you're going to do now in these years ahead many retirees use these years to pursue their life's passions to accomplish big things to start that business that they wanted to start to get in the best shape of their life to open a new store or studio to learn a skill that is worth a lot to them both personally and professionally in many cases others use this time to invest in things that are only special to them maybe even quirky to other people but that doesn't matter because it's all about you when you are investing in yourself just remember now is your time so you have a unique opportunity to invest in yourself and do that thing that you wanted to do over the last 40 years point number five is to remodel your home there's a strange return on investment or roi when it comes to a home if you get it right if you think about what sells a home its location its appearance and its square footage you can't change the location of your home at least not without moving but you can improve its appearance and you can actually make it larger in many cases the return on investment or roi has traditionally had a higher impact on a home than many other investments if a hundred dollar investment has an roi of 50 for example you put in 100 and you get 150 dollars back money magazine recently produced a list of the best roi home improvement projects and according to money magazine this list that i'm about to share with you has the best outcome when it comes to getting your money back and then some sometimes a hundred percent roi or more the number one roi project according to money magazine in most cases anyway is refinishing hardwood floors in the instance of refinishing hardwood floors you get 147 return meaning if you put a hundred dollars in you get 247 dollars back a thousand dollars and twenty four hundred seventy dollars back the size of your hardwood floor refurb will be more than that more than likely at least in dollar terms but the dollar return will also be higher i'll put a link to the money magazine article below in the description so that you can see if what they're recommending and returns that they're suggesting apply to you all right let's continue on money move number six is upgrading your appliances to energy efficient appliances let me take you through the math on this energy prices have gone through the roof as of late according to the consumer price index heating oil for example is up 77 year over year electricity is up 15.2 percent and natural gas is up over 30 percent this makes upgrading your appliances both good for the wallet and good for the environment but the top question you should be asking or one of the top questions you should be asking is what is your payback period a payback period is simply the amount of time it takes to recover the additional money that you spent on replacing the appliance versus using the old one if you have a new air conditioning system and it costs five thousand dollars but you save a thousand dollars a year in electricity costs the payback period is five thousand divided by one thousand or five years of course if your unit is already coming to an end to its useful life then the choice is simply the difference between the unit that replaces what you're consuming now and the more efficient unit let's say choice a is three thousand dollars and that's the unit that replaces what you already have same energy efficiency choice b is five thousand dollars and that unit saves you a thousand dollars per year the real difference then or the real payback period is just the price difference between the two the difference between three thousand dollars and five thousand dollars is two thousand dollars and if you save a thousand dollars per year with the better unit then your payback period is two years point seven and one of the most powerful if not the most powerful of all of them is to use a daily calendar and a system like the bullet journal system let me explain if time is money then controlling how you use your time also means controlling how you use your money a good journal helps you plan how you're going to spend money in the years ahead when to think about replacing that air conditioner that we talked about earlier or when to buy the skis that we talked about even earlier than that you simply put it in your journal and you forget about it most importantly using a daily calendar or daily journal frees your mind for other things and once you put it on paper then you can forget about it now every time i show my paper journal i get at least a dozen comments in a video that talk about using a paper journal is akin to living in the stone ages but let's assume for a second that i actually know how to use the scheduling function on my phone which i do why would i ever use a paper journal because paper planners allow you to set pause on your phone on your computer and virtual meetings to name just a few writing things down can give you more quiet time and actually what you're thinking about is more deliberate you focus on the tasks that are necessary in the future rather than multitasking checking social media for prolonged periods of time etc in short a paper planner allows you to be more deliberate stay in the moment and keep focused on what it is you're working on this will allow you to interact a little bit more thoroughly with your information instead of waiting for the notification to tell you what has to be done next and just to highlight this point a little bit further in 2014 32 of adult readers had a digital device like a kindle or an ipad that had a kindle function today that number is 19 don't get me wrong a digital replacement goes a long way to help save the planet and save space in your backpack but the experience is different one only need to look at a college bookstore to see that they still sell books to know what i'm talking about college students would be on the cutting edge of this argument because of where they sit in the world today but college students are still buying books here's a recent photo i took at a college bookstore about four or five weeks ago you can see that the shelves are filled with college books also as a reminder if you have something to add to this list please put in the comments section below so that others can learn from your wisdom finally don't forget to go to the description and check for the links that we talked about including the link to how to build a cash reserve this is jeff schmidt thanks for watching

Channel: Holy Schmidt!

Views: 176,939

Keywords: retirement investing in your 60s, retirement budgeting, emergency account savings, emergency account savings, best savings account for emergency fund, best emergency savings account, investing in retirement, investing in retirement, dividend investing in retirement, how to budget in retirement, retirement strategies, retirement strategies, retirement strategies for 60-year olds, retirement income strategies, pay off credit card debt, pay off mortgage, discount club

Id: 9bek9PKTr1Q

Length: 12min 51sec (771 seconds)

Published: Sun Sep 04 2022