MONEY: In your 40s? Here’s the money attitude you NEED to adopt

At some point we have to move beyond being able to pay the bills. Past a certain point, taking care of obligations is not enough to push one forward. One must have a bigger ‘why’ they earn their money.

Many people in their 40s have seen the ups and downs of life. They have made money and lost it. Maybe they are now taking care of extended family. University fees for children is coming up. They have been, or seen close friends retrenched. And above all, retirement is not too far away. Being smart about money and time is not an option. There must be a clear ‘why’ and ‘how’. How do you do this?

WITH PURPOSE

How you earn money gives you purpose. If you have few working years left, you might as well spend them doing something you like and are passionate about. Something that brings you and your customers joy. Continuously working at something you don’t like drains you – and in your 40s, you do not have enough energy to drain. Working in an area you are passionate about will still be tiring and hard work but it also energises you. If you are earning money on purpose (as opposed to treating it as simply a means to an end) you also become very intentional with it. You are also likely to start being able to say no, as you can tell the things that are not that important. Your relationship with money is on purpose.

SUSTAINABLY

Banks evaluate pay slips and lend people money based on that. They take comfort in the fact that that they can rely on you to get paid and therefore service a loan. In the same way, in this stage of life, you need to start looking for what will bring in sustainable income. The problem that many people face is that they have created lifestyles that depend on them to show up at work every day. These lifestyles look really good and even provide the perception of wealth. However, should that salary not be there, these lifestyles cannot be maintained. A lot of companies have been retrenching and many people are now waking up to this realisation. It’s not enough to earn money; you have hard to make it sustainable. You may have realised that your job or business is not sustainable. You may be close to retirement. Just because you retire doesn’t mean you stop spending. You still need to eat, pay bills, see the doctor, etc. Invest in areas that will give you enough money to live on even when you are not working.

WITH ACCELERATION

For you to get to the pace where assets can offer that support there needs to be acceleration. The traditional way of thinking about investments may not do it for you. A 20-year-old has time but you may have to do things differently and more strategic. You also have the benefit of experience, networks and know-how that the 20-year-old may not. It is not enough to have various plots of land all over the place. You must know what you are going to do with them, and how to turn them into productive or income-generating assets. You may also venture away from traditional investments. You may not want to start a business but you can also invest in somebody else’s business. You may have extra space in your house that can be leased out as a holiday rental. To accelerate means doing the research and thinking outside the box.

Last but not least, keep your legacy in mind. What would you like to leave? Are you preparing those you leave to take care of what you built? Age is not just a number; it means that you need to do certain things differently.

Waceke runs a financial masterclass for people who are over 40. For details get in touch at [email protected].