Living “The Life” of 100 Years
Part 2, Earning Years
Last week I posted part one “Learning Years” of a three part series called Living “The Life” of 100 Years. This week we continue with “Earning Years”, the next 35 years of our 100 year life.
Have you ever considered living a lifetime of 100 years? What does it really take to do such a life feat? What type of planning should be involved? You may think you will never live that long, but what if you do? What if the Lord blesses you with long life? Will you be ready for your golden years, mentally, physically, spiritually, financially? Have you been using your knowledge to improve your earnings in life so far, or have you simply taken a job to collect a paycheck and allow life to happen to you?
We tend to spend a lot of our time predominately focused on generating income and accumulating wealth since it is the time when most of us are at our peak earning years, from 35 to just around 70. As we enter the “Earning Years” phase many of us have completed a desired level of schooling, have an education in our intended field of interest along with a fair amount of work experience in an industry we have sought out or ended up in. In any case, as we move through our 30’s and 40’s, we have a value to offer the job market, and the job market has an amount it will reward us with. Hopefully, the job market reward is equal to or higher than our own calculated value.
In today’s job market, which has become global, we now have a lot of competition from around our own geographic area as well as around the world. Jobs that have been around for many years may be gone, may have relocated or the skills needed to do them have dramatically changed and may continue to change. While we are in our “Earning Years”, we need to continue our learning and educating ourselves with new skills that keep us competitive and make us more desirable in the job market, or risk the value we bring to the job market and therefore risk a decrease in our earnings. This tends to happen as we age. The younger individuals entering the job market simply have more modern skills needed by business, while the older generation’s skills, although impressive, become less valuable because the job market now needs the more modern skills learned and offered by a younger generation. Consequently, as we age, we may find our earning power decrease in value because of new skills required (which we may not have learned or bothered to add to our skills inventory) and also because there will be more unemployed individuals applying for those fewer jobs of old. It becomes pure supply and demand; fewer jobs with more qualified applicants willing to settle for less value drives down the amount the job market offers for a position, and you end up making less.
Since the “Earning Years” is a bell curve rising in the third and fourth decades of our life, and falling in the sixth and seventh, it is very important to plan during this feast of earnings time. If you fail to focus on putting away some of your gains during this phase, your “Yearning Years” may be filled with a lot of regret.
Working in your career is only one way to earn. Can you think of any others? Individuals that are truly successful in this phase of their life learn to multiply their earning potential by adding additional streams of income. Some have a second or even a third job, some develop a hobby and learn to make extra income from it, some purchase real estate and learn the fix, flip and rental business, others may simply start a small business and still others may find extra money to invest in someone else’s start-up or ongoing successful enterprise.
One key element to be aware of with developing any of these additional streams of income is your time. If you work a second or third job, obviously, you need to be there in order to get paid. There are only so many hours in a day and assuming you need to sleep, your earnings will be limited by the amount of time you can effectively work at adding value. Likewise with a hobby, you need to do the work, unless you can turn it into a small business; and by small business, I mean create a product or service that makes you more than just an hourly wage. Your small business needs to create income for you (the owner) without you working in it all day, every day.
If you intend to develop additional streams of income and want to work less and make more you will need to focus on products and services that add value to a customer, and allow profit for you (the owner). Focus on businesses that have the potential to create wealth for you in multiple ways.
Take real estate rental property for instance…you purchase a property, fix it up and rent it out. Assume in this simple example you have a positive cash flow situation, a long-term low maintenance renter and a strong housing market. Over time, the rents collected pay off the mortgage on the property; increasing your equity (which is value to you) leaving you with a little extra cash each month (which is value to you) and the property appreciates in market value (which again, is value to you). With an example like this, market timing and deal structure are very important as well as the amount of time you have to consistently work to maintain this income stream. This is one example of creating an income stream that can generate wealth in several different ways while you still work your career or job.
A different example can be a small business. If you start and build a small business, you may find that certain small businesses can provide you with a salary which replaces your current job; it may also supply many benefits and perks that replace existing expenses you may now be paying for out of your current jobs paycheck; if successfully run, it can provide additional profits to you (the owner) besides your normal paycheck; and again if successfully run, it may provide you with more time to do other things during your day besides work; or you may be able to sell the business, it’s equipment, buildings and other assets at some point for a large cash payout to do with as you choose. Small business is a good way for many individuals to grow their earnings and wealth doing nothing more than getting up and working everyday…isn’t that what you are doing anyway?
The United States of America is still a land of opportunity. You can live here, work, receive a competitive wage for the value you provide and live a better than average life (when compared to the world at large). You can own multiple pieces of property that can over time increase your earnings and wealth. You can start, own, run and sell a small business that will also increase your earnings and wealth.
But to do this, it takes planning. It takes some additional resources that you may not be comfortable or knowledgeable in using. It takes others that have those skills to advise, coach and mentor you. It takes you to want to maximize your “Earning Years” now, knowing that they will decrease over the years to come.
If you think it may be too late to start a business, consider what can happen over a short span of time:
Twitter is 8 years old, Market Cap Value of over $24 Billion
Facebook is 10 years old, Market Cap Value of over $207 Billion
LinkedIn is 12 years old, Market Cap Value of over $29 Billion
Google is 16 years old, Market Cap Value of over $373 Billion
Sitting down and constructing a life plan at this point in your life will be very helpful to you and your future. A life plan and the right professional coach will help you learn to earn more in your “Earning Years” phase and provide a more disciplined structure for staying focused as well as persisting through difficult times.
Are you in your “Earning Years” phase? How much are you earning? How many income streams do you have coming in? What is your potential to add more? Why haven’t you done this already? Where will you be 10 years from now (don’t forget about Facebook and Twitter, both are under 10 years old)? Let’s not have any regrets as we age…
Next week we conclude this three part series, Living “The Life” of 100 years with part three, “Yearning Years”.
Gary J Kiecker