Blue Chip Journal - June 2019 edition

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
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