Become A Nest Egg Guru
Become A Nest Egg Guru
- June 28, 2017
- Posted by: Daniel McGregor
4 MINUTE READ
A nest egg is simply a sum of money for the future. Think of it this way… if you ever want to be able to afford to stop working and maintain your lifestyle then you’re going to need a nest egg.
How big a nest egg? Well, that depends on what sort of lifestyle you want to lead.
These are the options you’ve got available:
- Think short term, save virtually nothing for retirement and then live in poverty for 30 years on the age pension;
- Do your best to think long term, save a little bit along the way and put together enough to live a modest lifestyle (with help from the age pension), or
- Make the long-term work for you by putting a little bit away while you’re working AND get it working really hard so you can live a comfortable lifestyle in retirement.
I know which one I’m choosing! How about you? Is it something you’ve really given much thought to? If you’re like most people, the answer is no. That’s understandable though… it’s an evolutionary thing. We’ve evolved to have the biggest brains of all species, hence why we’re at the top of the food chain. But it’s that food chain that’s essentially driven our evolution and is why we tend to think short-term. We’re really designed to be thinking about where our next meal is going to come from. It’s only in the very recent history of humans that we’ve started to have to think about living a long life and planning for the long term.
Many people aren’t fond of numbers but they can tell powerful stories. Only back in 1900, the average life expectancy of a human was 31 years. Compare that to today, when we really need to be planning for at least 31 years of being retired! If you’d been around in 1900, you wouldn’t have been exhausting much mental effort on how you were going to manage your income to save some of it before retiring at around 60 and needing to fund your retirement until around 90. No, if you’d been around in 1900 you would have been thankful just to earn anything to put food on the table and get to watch your kids grow up.
Times have changed. The world has changed. Our thinking around managing our money, generally, hasn’t changed all that much as we tend to continue to live pay cheque to pay cheque. That’s why we have COMPULSORY superannuation because left to our own devices, most of us would save nothing for retirement… not because we’re not smart enough to do so but because we haven’t evolved to think that way.
So let’s all take an evolutionary step together and start thinking about our money long term (not all of it, we need to also think about some of our money as being short term). And here’s one of the most powerful aspects of taking that step… if you can take that step, you can then pass it on to your kids and they can pass it on to theirs.
As you would already know, life isn’t always easy, but if you can have a secure financial future it at least makes one part of life easier. After all, as Helen Gurley Brown once said, ‘Money, if it does not bring you happiness, will at least help you be miserable in comfort’.