While gold will make sure our money doesn’t corrode, if we have any hope of retiring, there needs to be significant growth in our portfolios. This is all assuming one thing–that we work a Monday to Friday 9-5. I say this because there is one rule of financial planning that throws itself in the face of “work hard, save 10%,” and that’s building equity of your very own.
It’s The Best Kind
I’ve told many people that the best kind of equity is a business that you have complete control over. What I really mean is how you can build a source of equity that can pay you a residual source of income. I’m going to go through a few examples of why this is my preferred choice of equity.
It’s More “Guaranteed”
While nothing is for certain, we’ve all seen what happens to pension funds in times of economic turmoil. While they may not pay out as well as your company pension, you can better prepare for retirement when you have a source of revenue that you can project and plan for within your own domain.
It’s Better For The Economy
No economic crises have been solved by government. It’s strange when we put so much emphasis on the governments getting involved. The last two US elections have revolved around the economy and how to “solve” it. Stability of the economy has always been brought by entrepreneurs creating stable jobs and not by the government bailing out failing businesses or by creating government jobs. These short term fixes only add fuel to the flame, since it’s our own money that goes towards paying for them.
Even If That All Wasn’t The Case
Going into business for yourself is not without its share of risk. In fact, people would often say it’s riskier than working a regular job, although in this day and age, even that could be challenged. Ultimately for myself, the main reason I advocate building your own equity is that the life I want to live and the money I need to live it would never be reachable with a regular day job, which is a rule of financial planning that is relevant on both sides of the coin.