You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Pursuing dreams in retirement not only for the likes of Bezos

A wise person once said, ‘Take care of your pennies and the dollars will take care of themselves’.
Image: Shutterstock

A wise person once said, “Take care of your pennies and the dollars will take care of themselves”. However, saving and investing seems increasingly difficult in the current post-pandemic environment. Recently it was announced that the CEO of Amazon, Jeff Bezos, will be retiring with a lumpsum of US$ 197 billion, some 739 489 times the median American’s retirement wealth. However, unlike Bezos – who will soon be pursuing his lifelong ambition of traveling to space – many cannot afford to follow their dreams during their golden years.

The extraordinary retirement venture prompts an important question – how does a ‘normal’ person go about achieving real wealth, and are the only alternatives to either inherit your wealth or become a business mogul? For many of us, neither of those are realistic options. Many would argue becoming a dollar millionaire provides a good proxy for being truly financially well-off, and this may seem like a steep target. According to the World Wealth Report only 1 in 380 people reach this position. However, what is really interesting, is that how these people became millionaires. Here the evidence often runs contrary to what we would expect.

Many people don’t realise that most dollar millionaires are not of the likes of Bezos, Musk and other successful entrepreneurs. Nor have they earned their place on the list through an inheritance. 88% of dollar millionaires are self-made, and are on average 61 years old (source: Fidelity investments).

Author Thomas Corley has argued much of the success of self-made millionaires are due to what he called “rich habits”, providing important evidence being wealthy is also a behavioural choice. Corley’s research also shows millionaires can be evenly split into two groups:

  • Saver-investors, who he describes as a typical employee who diligently saves (typically around 20% of gross income) over their whole working career, and investing these savings for the long term.
  • Dreamer entrepreneurs, who build wealth through taking on substantial risk themselves, and the majority of them have failed at least once.

What seems clear, however, is that building wealth is not only a matter of means, but also a matter of mindset. Healthy saving habits are key to achieving success. For the average person, this only happens after four decades of a career, and many who get there, don’t wish to retire. Rather than call it retirement, they call it financial freedom. However, what seems clear is that building wealth is not an overnight, nor accidental journey, nor just a matter of luck.

Savings month provides an important reminder that accumulating real wealth starts with a conscious decision to change our approach to our finances. Saving with purpose should be the starting point for anyone wanting to change their financial outcomes, and ultimately achieve financial freedom. Engaging with a trusted financial planner can help you clarify your goals, and put a plan in place to help you get there. Most importantly, it’s time we realise successful saving and investing is a multi-decade journey that starts by making daily choices.

Nirdev Desai, Head of Sales, PSG Wealth

COMMENTS   2

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

Take care of the pennies and the pounds will take care of themselves !!(not Dollars ) but ok got the drift .

How about eliminate your debt !! Stop the use of credit ! Especially credit cards !!!! people pay much more in debt interest then they make on their savings interest!!!! These feel good articles make me sick!!!!!!!!!!!!!By the way the target market probably can’t read this.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles:
Click a Company: