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from https://www.theladders.com/career-advice/the-top-10-reasons-why-too-many-people-retire-poor

(go to the above citation to view the graphs & charts.)

The top 10 reasons why too many people retire poor
Steve Adcock
August 16, 2019

There are too many people in this country (and the world) who retire
poor. Some are forced into early retirement before they are ready. For
others, health concerns might have influenced their decision to hang up
their hat, and for some, just flat poor money choices.

Workers can barely stick their neck above the waters, and people are
forced to retire poor. The situation is common, although this is more
prominent in some countries than others.

“Money is not an essential thing in life but its right up there with oxygen,” according to Zig Ziglar

Money may lag behind health, great relationships and meaningful career
in terms of importance, but as Ziglar says, “it’s right up there with oxygen.” The sad fact of life, however, is that less than 5% of people
will be financially free by age 65.

In other words, over 95% of the people will retire poor.

And according to one study, nearly 40% of American’s middle-class face poverty in retirement.


Why Do People Retire Poor?
In his excellent recording of ‘The Strangest Secret’ in 1956, Earl Nightingale tracked the fortune of some 100 individuals who started
bright-eyed and bushy tailed at age 25. These people were all well
motivated and eager to be successful. ‘By the time they are 65, only one
will be rich, four will be financially independent, five will still be
working, and 54 will be broke depending on others for life’s necessities’.

These are alarming statistics and justifiably should provoke us to beg
the question ‘why are 95% of people broke at 65’? or rather ‘why are 95% of people retire poor’? The following ten reasons provide the answers.

1. They Never Clearly Define Financial Freedom
Freedom can have a different meaning for different people. So, attaining financial freedom can have a varying definition to individuals.

However, the simple and straightforward definition of financial freedom is

Passive income = lifestyle expenses.

P.I ≥ L.E

To attain financial freedom and avoid being poor at retirement, the
passive income from your assets must be higher than or equals the income
you require to fund your chosen lifestyle

Most people retire poor simply because they have no clear definition of financial freedom for their life.

2. They Never Make Freedom an Absolute Must
Many people are too lazy to be productive. If you ask a hundred people
how they intend to get rich, most will tell you they would love to win
the lottery or married an heiress; or inherited a fortune. As you can
see, most people retire poor because they don’t have a plan.

Sadly, hope is not a strategy, and to attain financial freedom and
retire rich; you need to be relentless and ruthless in the pursuit of
your goals.

3. They are Unaware of the Power of Their Subconscious Mind
Ever come across the sentence, Rich people think like rich people and
poor people think like poor people?

Believe me, we all have a self-concept. You have a self-concept for your weight, your business intelligence, and your communication skills.
Equally and critically, you have a self-concept for your current
financial reality.

It’s quite fascinating, but many people who won the lottery very often
lose it all within a short period.

Correspondingly, many people who become bankrupt regain their lost
fortune quickly. For example, Donald Trump, who loses is wealth and got
into debt, but today he is one of the richest in the world.

Your subconscious mindset your financial thermostat. Similar to a
thermostat that controls the temperature of a room, your financial
thermostat dictates mostly your financial reality.

If you are serious about becoming financially free at retirement, you
must first examine what financial files are stored in your subconscious
mind. If you have the wrong data, you will continually have an adverse financial reality; which might result in that you retire poor. So, it’s essential to do the checking fast.

Harv Eker sums it up appropriately when he says ‘the only way to change
the temperature in the room is to reset the thermostat.’

4. They are Surrounded and Influenced by Other Poor People
Many people fail to realize the influence their reference group has on
their destiny. Ziglar once said, ‘you can’t be flying with the eagles if you’re scratching with the turkeys.’

If you are truly serious about attaining financial freedom, it’s
essential to surround yourself with specialist financial advisers.

At a very minimum, you need a dynamic accountant — equally, a banker who understands you and your business. You also need access to people who
they are financially free.

Learn from them, model them. Imitate them, success always leaves clues.
Learn from the people who retire rich and as well hear from the horse’s
mouth – learn from the people that retire poor as well.

There is a common saying that says ‘birds of a feather flock together.’
You can proactively begin today to choose to surround yourself with
financially free people.

5. They Never Confront the Brutal Facts of Their Financial Reality
If you ask people about their financial status, most will tell you they
don’t want to talk or think about it. Many will say to you that they
will have a financial adviser or financial planner to handle their finances.

Unopened brown envelopes and bank statements are the two most frequently unopened letters in the world. The reason for this is that there is an
inherent aversion within us to confront the brutal facts of our finances.

To supercharge your pursuit of financial freedom, it is instructive to
handle your finances yourself and confront the brutal truth about your finances.

One of the surest ways to retire poor is to avoid facing the truth about
your finances.

6. They Don’t Save
Many people will retire poor simply because they have no golden goose
and those that do frequently murder it in the name of immediate
gratification.

Do you remember the fable of the Golden Goose? Long, long ago, this
family came into possession of a Goose that lays Golden Eggs. After some
time the family got greedy and killed the golden Goose in other to
extricate more golden eggs.

Sadly, by killing the Golden Goose, they also killed the producing
mechanism for their income.

If there is ever a habit that everyone should imbibe in, it should be
the habit of saving. But sadly, millions of people always have one
excuse or the other not to save. But without saving, your financial
dreams might be in a faraway land.

Pay Yourself First!

In his classic book, ‘The Richest Man In Babylon’ – George S. Classons advises that we should pay ourselves first. Even though there will be
hundreds of excuses for not doing it, but that will be the greatest
sacrifice you will make toward attaining financial freedom. It is
widespread to see workers buying new cars or moving to an expensive neighborhood when they received a pay raise. People who could not delay gratification will most likely retire poor.

7. They are Unaware of the Power of Compound Growth
‘Compound growth is the eighth wonder of the world’ – Albert Einstein. Compound interest can make or break you financially. In fact, it can
make your life merry or miserable.

Why?

Compound interest can grow your wealth tremendously and as well increase
your debt incredibly.

8. They Work for Money as Opposed to Having Money Work for Them
Usually, income is manifested in three ways;

Earn Income: – This is the income that generally comes in as paycheck or
a salary for product or service rendered.
Portfolio Income: – This represents income derived from stocks, shares, investments, and pensions.
Passive Income: -This is income that comes without you having to work
full time for it. An example would be rental income, royalties, patents,
online products, or services.
In his excellent book – “Retire Young Retire Rich” – Robert Kiyosaki suggests that earned income is the worst source of income for several
reasons. Firstly, it’s the highest taxed income. Secondly, you have to
work hard for it, and it absorbs all your valuable free time.

Thirdly, there is limited leverage. That is, the only way to earn more
is to work longer and harder. Finally, there is precious little residual
value in this income in that each day you have to start afresh again.

A significant difference in mindset between rich and poor is that rich
people have money work for them as opposed to working for money. This is
the true path to financial freedom.


If you want to retire poor keep working for money without an alternative
source of income.

9. They Lack The Knowledge, Skills, and Coaching to Become Financially Free
As you know that Knowledge is power, but only a few are ready to pay the
price to acquire that knowledge. Poor people are the set of people with
the worst reading habit. They find it challenging to invest in financial education.

Without a solid financial education, attainment of financial freedom
will be a very rigorous task. As the saying goes; “Life is tough, but
you can make it tougher by been stupid.” So is “Attaining financial
freedom is tough, but you can make it tougher by being financially
ignorant.”

It is vital to acquire and sharpen your financial skills to be
financially free. Luckily, with the advent of the internet, the
acquisition of knowledge has infinitely become accessible.

There are no excuses now.

To generate a steady, safe, and consistent income from investing, you
will need to acquire good financial knowledge and sharpen your skills
with good practice over some time. The knowledge acquisition can be
through books, financial games, or through seminars and business coaches.

It is straightforward for employees to acquire more practical skills and knowledge than to gain financial knowledge. This is what keeps most
people in the rate race and ended up retiring poor.

10. They Have No Plan, or They Lack the Will Power to Follow Through
There are a lot of differences in the strategies used by all of the
great investors. However, they all have two things in common; they all
had a plan, and they stick to it. It is imperative to have a plan for
how you are going to attain financial freedom.

Your quest for financial freedom will be doomed without a plan. Planning
is essential. Even a bad plan is far better than no plan at all. (At
least you know it’s terrible, and you can work on it to make it better).


Most people never map out a plan for their retirement and the most
significant percentage of those that do, do it too late. To avoid being
retired poor, you need a plan early in your carrier. A plan that will
cover you to your financial destination.

You can study the strategies of great investors and choose the one that
appeals to you and stick with it. Consistency of purpose and practice is
what ultimately wins out in generating ongoing profits.

Wrap It Up!
In their excellent book, ‘The Millionaire Next Door’ – Tom Stanley and William Danko highlight how two families, living in the same type of
house and employed in the same job end up with totally different
financial scenarios. By their late 40s, one is financially free. The
other is deep in debt and despair.

The reason is not education or opportunity or lucky breaks. It’s straightforward; it’s a matter of choice.

To retire rich or retire poor is a choice, and nobody can make such a
decision for you.

You have yet another chance today to choose the path you want to follow.
The path to becoming rich and wealthy and the path to remain poor. So,
choose wisely.

This article first appeared on The Money Mix.

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