RETIREMENT GOALS Hustle on the side What if our focus is wrong in our efforts to solve the retirement gap? 42 www.bluechipjournal.co.za
RETIREMENT GOALS The thing I like least about financial planning is the delivery of the first financial plan.I love everything leading up to it, getting to know my clients, understanding their lives and dreams, getting stuck into a great spreadsheet and producing a thick PowerPoint presentation to explain the options of how to close their retirement gap (you just can’t take the management consultant out of me). However, it doesn’t matter how hard I work, how beautiful my presentation or the hours thinking of ways to get them to invest more, there’s no fun way to tell them that they are so short of their retirement goal. I never leave the meeting feeling “Woo-hoo! That was great!” Most of my clients are employed, and so there is not much flexibility on their income. Being in their 40s and 50s, they need to spend less in order to invest more so they can close the gap. They nod in vigorous agreement to my suggestion of finding ways to cut their expenses and they commit whole-heartedly to implement every suggestion. Over time, though, their urgency to resolve their retirement gap wanes as life and its expenses happen. Eventually there comes a point when you must wonder if there is another way to close the retirement gap. In addition to working one-on-one with my wealth management clients, my passion in life is to teach women about money. Living in South Africa calls on each one of us to contribute to the upliftment of our country by using our unique gifts. With 62% of children in South Africa born in 2017 with no father registered on their birth certificate, those single mums have got to get access to financial education: not only for themselves, but so that they can teach their children who are our future. The biggest challenge I see in the young people I speak to in their late 20s is a deep lack of financial acumen. They are, in so many cases, the first in their family to get a stable job and have the privilege and burden that comes with moving their family from the “back room” to their own house. The weight on their shoulders is heavy as they rise at 3:30am to catch the transport into town to earn the money to house their family. Faced with the challenge of 62% of newborns with single mums, and young adults with no financial education, I set myself a goal to teach a million women about money within the next six years through my podcast and blog Working Women’s Wealth. However, their feedback is also that every cent goes to their family, so cutting expenses won’t help the retirement gap. Their salary disappears with medical expenses, school fees, transport and food. So if my wealth management clients and my podcast clients aren’t able to save enough, is there another way? What happens if the answer is on the other side of the equation? The income side. What if we enable and equip people to generate additional incomes that can last beyond their formal employment? Not only will they have more money to save along the journey, but they also won’t need as much to retire because that income supplements their draw down. As part of this notion, I built an online course to teach people how to build an online business. Honestly, I did it to remove the objections from my clients and podcast listeners that they didn’t know how to start a business. It’s early days, but I’m seeing people start businesses; moreover, I’m seeing people have hope. Hope for a different future. One with more control of its outcome. The more I watch people transition into retirement, the more I think everyone needs a side hustle, whether you have enough or not. The psychological impact of the transition is significant, and one of the biggest mistakes I see is people leaving work rather than going into retirement. The difference? The sense of purpose and continuity. For many, retiring is an abrupt end to status, control, direction and intellectual stimulation. A client of mine began a photography safari tour for international clients when he was 55 years old. With one year to go, he is so excited to retire because his business is off the ground and he’ll get paid to do what he loves in retirement. Now I’m all about the and, not the or. I recommend my side-hustle clients invest all their money back into growing the business, or at least invest half. Firstly, because if they use the money to spend, they exacerbate the retirement problem by growing into a larger expense base. Secondly, to ensure that they beef up their retirement savings, because life and health happen as we age. By encouraging our clients to start a side hustle to generate more income for and in retirement, we could help make yet another little dent in the huge retirement gap crisis our country is facing. Lisa Linfield CFP®, CEO Southern Pride Wealth, Host of Working Women’s Wealth podcast www.bluechipjournal.co.za 43
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