The graphic below is from the US Bureau of Labor Statistics and it illustrates really well the path that 95% of us are on. There is also an image added of a bucket and sadly, carrying buckets in our employment careers is what we do. Some of us may have a higher yearly income than $55,000. But these statistics show that much of America is on this 45-year plan and with the cost of inflation and the eroding buying power of the dollar, much of America is struggling during these 45 years and most likely struggling also in retirement when their incomes go down by one-half to two-thirds.
I grew up in California in the 80s and felt like my parents did an amazing job to give me a great life in my youth. My father was a Pediatrician and worked for a large HMO, so we were not rich, but I guess upper middle class. Growing up in my family though, we thought we were always poor. We’d go out to dinner very seldom, and when we did, my father would have us order with a strict menu. The famous memory of our family is going to McDonalds and having our father order us dinner. 5 hamburgers, 5 soft drinks, and 5 small fries. There were 6 of us, my parents and 4 kids, but my Mom and Dad would split their hamburger and drink and then eat fries from all of us kids as we complained of there not being enough food. This was typical of many outings. Yet, we did have great family vacations and there were not many things that I was deprived of.
Even being a doctor, my father was still on the 45-year plan. He planned on working till he was 65, but the HMO told him to retire early so they could pay him less in his final years. He was able to vacation a lot more and travel but unfortunately got cancer and passed less than 10 years later at 69. He had less than 10 years in retirement, 4 of those trying to fight off cancer unsuccessfully. Being able to retire a few years early was a blessing for him, but unfortunately, he has missed so much, and my mother has been alone in her golden years for more than 12 years now. He saved money most of his life and didn’t spend much money till he was officially retired.
My father had a great life and as a doctor he was probably better off than most financially, yet he still worked everyday of his life apart from his 2 or 3 weeks of vacation each year. As a doctor, he also had to work some weekends or be on call and there were times that he had to leave late on a Saturday night for the hospital or clinic to fulfill with his duty. In my youth, I was lucky to be surrounded by a lot of great people and families in California. We did live in a better area and there were a lot of successful people, doctors, lawyers, dentists, business professionals, accountants, and the typical assortment of careers. Among these families there did not seem to be anyone who retired early. Even my friends’ father who was a successful surgeon, worked well into his 70s. Sometimes people choose to keep working even when they didn’t need the money, but most all of them keep working into their late 60s until they could retire and take Social Security. I can only think of one of my friends’ father’s that was able to retire way early and he was the exception.
There are very few ways to escape from the 45-year plan. I do say escape, because although some of us like the jobs we have or the careers we may be in, we do not have the freedom to do what we want, and we are forced to work much of our life instead of doing things that are more important. Between 7 to 8 hours of sleep and 8 to 9 hours of work each day, we only have a few hours to ourselves and to spend time with those we love.
So, who does escape the 45-year plan? How can you escape it? There are not many who do escape the 45-year plan but let me outline those lucky few that do:
1. Family Money – Not many of us can fall back on family money, but there are those that have money passed down to them from wealthy grandparents or parents that are able to escape early from working life and have more leisure time. There are also those families that have so much money from businesses that they children never learn how to work hard and make money on their own. That also in itself is a shame as often these children don’t live productive lives.
2. Making smart investments that pay off – I’ve been trying to do this much of my adult life, and I’ve had some success and other failures. Some of my investments have paid off well, and others have failed miserably. I’ve invested fairly well in real estate with most of my investments paying off fairly well and adding to my passive income cash flow, except for the market crash of 2008. The problem with investments is that it is very hard to be able to always make money in all your investments. Investments have risk, that is why they are called investments. Some pay off and some don’t, and it seems often that the markets are rigged against us so that it is harder and harder to get ahead. There are those that are professional investors and do very well, but that is also a full-time job. The vast majority of us may not have enough success with our investments to retire early and escape the 45-year plan.
3. Becoming a successful B-business owner – It is important to differentiate a B-business from an S-business. An S-business is a business that you own but that you constantly have to work at. A dentist is a good example of an S-business. Although the dentist owns the business and may be able to make a very good income from his dental practice, money is not made unless the dentist is constantly employed every day at his business to make sure he can make money. S-businesses require the owners to constantly work at the business and often times they have to work even harder that being employed in a job they don’t own. A B-business is different than an S-business from the simple fact that a B-business is a business system that does the work for the business owner so that he does not necessarily have to be involved in the day-to-day operations of the business. Often times the business owner in a B-business sets up the systems and operations and hires the employees to work the business for him. If he can set up the B-business well enough, then ideally the business can produce income for him for the foreseeable future. Owning a B-Business is one of the few great ways to escape the 45-year plan.
At Side Business Freedom we are setting up B-business systems and passive income to help you escape the 45-year plan and set yourself up in a better financial position. Click here to set up your 25-minute business overview meeting to see if we can help your financial position.
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