When a new source of taxation is found it never means, in practice, that the old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had one bef
By AARON KATSMANElegance in retirement-521(photo credit: Uriel Messa)
A few days ago, I met a neighbor that I haven’t seen in some time. Whenever we see each other we always stop and talk for a few minutes. I asked him for an update of a mutual friend of ours who was recently moved to an old-age home, due to dementia. He told me that the friend is almost completely out of it and doesn’t recognize anyone. He apparently is in a good facility, which is not cheap. Then he told me, “Whoever said you don’t need a lot of money in retirement is a fool. No one can live on NIS 2,500 a month!”We are currently surrounded by election cycles. Whether it’s in the UK, the first debate in the race for the Democratic Party presidential nominee in the US, or round two of the Israeli elections, we keep hearing how the politicians are going to take care of us. Listening to the Democrats in the US, there will no longer be need to work, because everything from education to health care – with a lot more thrown in – will be free! In the UK, Labour head Jeremy Corbyn is trying to unite socialists all over the world, and here in Israel, the move toward more governmental control is always within reach. Sort of ironic that all these politicians keep promising us that they will take care of us, but after decades of their promises, they continue to be unsuccessful. How could it be that with all their policies there is still income inequality (if that is a bad thing) and still plenty of poor elderly?Why the electorate keep believing these empty promises continues to shock me. Doesn’t track record mean anything? Funny how every election cycle we get more and more promises and yet none of the problems get solved. Why? Maybe, it is because government is incapable of running anything efficiently. As I have quoted many times, former US president Ronald Reagan said, “One way to make sure crime doesn’t pay would be to let the government run it.” Only one solutionEver speak to a millionaire and ask how she became wealthy? I have and have yet to hear the answer, “I got rich because of the government.” So why on earth do we continue to abdicate responsibility to 120 people, most of whom never ran a business, met a payroll or know what it takes to create a real job and who have no idea what’s in our best interest?There is only one way to make sure that you have a financially secure retirement. That’s to do it yourself. Take control of your own financial situation. Start by sitting down and doing a budget. By doing this, you can get a clear picture of how much money is coming in versus how much money is going out for expenses. Then you can set up a disciplined monthly or annual savings plan. Start thinking about your long-term goals and needs, and then speak with a financial professional. They will be able to do a long-term financial plan for you and help determine how much needs to be saved, monthly/annually, at what rate of interest, for you to achieve your financial goals.I recently met with a client who inherited a sizable amount of money. He had told me that his parents were both salaried workers who never made a six-digit annual salary. He was blown away how much wealth they had accumulated. I said that they just followed the rules of being financially responsible. They saved every month, never bought anything on credit, or that they didn’t have money for. He confirmed that by saying they did everything by the book.You don’t need to be making a huge salary working in hi-tech. If you live a modest lifestyle, put away money consistently, you too will be able to retire comfortably.AdvertisementNo Knesset member is going to do this for you. Take control of your own financial situation and start building a secure financial future. The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group Inc. or its affiliates.Aaron Katsman is the author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing. www.gpsinvestor.com; aaron@lighthousecapital.co.il.
