OK this may seem like a silly question, who would not like extra income? Who would turn down a pay rise (people even go on strike for as little as an extra $20 a week). No doubt you have dreams of what you will do when you can afford it.

But that was not the question – why do you need more income now and in the future?

In my previous post I touched on the emerging problems related to the servicing and repayment of the vast government borrowings to counter the Global Financial Crisis. As the Australian Treasury Dept warned yesterday the future holds the expectation of tax increases or government service cuts (or probably both) with the obvious result that standards-of-living will be cut in future.

Lets just explore this further while I suggest some really powerful reasons why to NEED to put an Extra income stream in place ASAP.

• First there is the simple reason you will need more income to offset the burden of the GFC inspired government borrowing. Just to maintain your status quo for the next several years.
• If we (in the west) are looking at the imposition of some form of Carbon tax, then we will need extra income to cope with that.
• Next You need to establish an insurance against you or close members of your family losing income, either via job loss, shorter hours or maybe reduced investment income (tell me about it).
• Next you need to be in a position of financial strength to support your family, to help them if they run into problems. To help friends or the needy. You can’t do any of that if you are only just making ends meet.
• Finally you need to be making serious provision for your retirement.

  The US Social Security Board reports that 85 out of 100 Americans reaching age 65 don’t even have $250. And only 2 percent are self-sustaining. The rest are dependent upon their family, church, or the government!

  Statistics show that, at age 65, after working 40 years:

  "An excellent book!"  — Paul Wilmott
  Principles
  of quantitative development
  

  • 1 percent are wealthy
  • 62 percent have less than $6,000 annual income
  • 79 percent have total assets of less than $35,000
  • 80 percent have incomes of less than $15,000 per year including Social Security.

  Or for Australia…..

  • 1% will be wealthy
  • 4% will be secure
  • 7% have to keep working
  • 54% will be ‘broke’
  • 34% will be dead*

  To avoid taking a real cut in living standards on retirement, you should be investing at least 20% of current income into retirement funds. Considerably more if you are getting close to retirement age now.

  It is becoming increasingly clear that people will have to work longer, in the future, assuming that suitable employment is forthcoming.

So how is your situation looking………….

Tags: financial freedom, Income, retirement, security, standard of living, stimulus