At this moment, my dad is retired and my mom will be retiring in the next 20 days. They have some money stashed away in their retirement account, but if they happen to live for another 20 years, their money will almost certainly be long gone.
Since I live and breathe finance, my dad started asking me questions about what they should do with the money that they do have. “Will the stock market crash soon? Should I put my investments in something other than stocks and bonds? What is a good hedge investment that will allow me to keep my money over the next 20+ years?” These are all great questions, but to be honest, nobody can answer them with 100% certainty (not even me!).
My Best Advice For My Dad and Mom
While my mom and dad were hoping that I had the magic answer of what they should do with their money, I did not provide the answer they were expecting.
All of their issues currently are not surrounding the pot of money that they have in their investments. Truly, their concerns lie in cash flow. In order to keep their money for a long time, they just need to increase their cash flow each month by earning a subtle wage from other means.
Social Security alone is not enough to live on, so when those retirement years come, most couple just dip into their 401(k) accounts and remove 4% per year like the professionals say they can. The only problem is, nothing is safe in the market – not even bonds. Even if your investments are deemed to be safe, you can still lose your shirt by sifting your money through Wall Street. Rather than continually depleating your hard-earned assets, why not do soemthing you enjoy that will earn you a little extra money?
Well What Can We Do?
This was the immediate question from my parents. After working one job for most of their adult lives, they have forgotten all of the other things that they are great at and people would pay money for!
My dad, for instance, is pretty good with his hands, especially when it comes to installing formica onto kitchen counters. Within just an hour or two, he could earn a few hundred bucks by performing his handy work. By doing this just 3 or 4 times a month, he could easily have an extra $1,000 to live on. My mom is an excellent mediator. She listens well and has an uncanny ability to have one individual see the side of the other party. After just a little bit of training, she could earn up to $50 an hour by mediating for others.
By performing these simple tasks that they are already good at, they could plunk their money into a few different online accounts that earn 2%+ and never have to remove any money from there! This is the perfect scenario, which would allow them to stop worrying about money in the future.
This post is from Derek who writes at Life and My Finances.