It’s no secret that using your money wisely now can set you up for a very lavish future.
Using it unwisely now… well, your future won’t look so bright.
That’s an easy concept to understand, but how do you actually do that?
How do you use your money wisely now to set you up for the best possible retirement?
Well, there are many ways, but I always like to guide people to retirement riches using something I call the Power of 3…
The Power of 3 can mean many different things, but I doubt you’ve heard it the way I use it for retirement.
For me, the Power of 3 comes from the idea of exponential growth.
Using it properly means your money will grow on an exponential curve.
It’ll grow slowly at first, but once that curve turns upward, there are no limits to how high your bank account can go, or how lavish your retirement can be.
Let’s run through those 3 powers so we can get you set up.
I break the Power of 3 down into the following 3 sections:
1. Using Your Money for the Past
2. Using Your Money for the Present
3. Using Your Money for the Future
Splitting your money/income in equal thirds will see you truly harnessing the Power of 3 for that luxury retirement.
Here’s how they break down:
Using Your Money for the Past
33% of your income should go toward using your money for the past.
We all rack up debt. It’s a way of life.
But debt can strangle our retirement into suffocation if it’s not managed correctly.
There’s a ton of personal finance gurus out there explaining different ways to manage debt, but the Power of 3 keeps it simple.
Take a third of your income and apply it to paying down debt.
Pay down the highest interest debts first, and then move down the ladder.
Automating your debt payments like this will give you peace of mind to focus on the second Power: The Present.
Using Your Money for the Present
33% of your income should go toward using your money for the present.
I’m not one of those people who go on about saving all your money and living below way your means.
There’s a balance, but you should be able to enjoy the present.
It’s why we’re here, isn’t it?
And one day, the present will be gone.
So, we must enjoy it.
That’s why my Power of 3 calls for a third of your money being spent in the present.
I’m not saying go out and buy anything and everything.
I’m saying use this money to pay current bills, needs, and to treat yourself with what’s leftover.
You deserve it. And being happy now means you won’t have any regrets in the future…
Using Your Money for the Future
33% of your income should go toward using your money for the future.
This is where the savings and investing come in.
Use that final third of your money for saving and investing.
In my opinion, traditional saving (i.e. stuffing cash under your mattress) probably isn’t worth a whole lot of your attention.
Put your money in gold, silver, bonds, and some riskier (and reward-ier) tech plays or other assets in a similar category.
That’ll ensure you’re set up for the retirement you deserve.
Using the Power of 3, you’ll become debt-free, personally happy, and cash rich.
