We need more than retirement savings to secure our financial future

Savings alone won't sustain us once we reach retirement age. Why investing is the new retirement plan? 

The greatest approach to spend our retirement funds is to have them work for us.

Changing our mentality is a necessary part of being ready for affluent retirement.

A record number of members of the Baby Boomer generation are now legally eligible for retirement. The statistics showing how little retirement funds will actually do to maintain a comfortable standard of living, however, are horrifying.

The median retirement savings for Baby Boomers, according to Yahoo!, is little over $200,000. The 4% guideline results in an annual retirement income of only $8,000 when taken into account.

And to make matters worse, 40% of Baby Boomers acknowledge they haven't saved enough for retirement. 

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Just refuse bad financial advice

The issue is more complex than just people not having enough money saved for retirement. The conventional wisdom that is disseminated as personal financial advice makes up the other portion.

The solution is not to cut costs to save money

Saving money is better than doing nothing at all, but it's still quite close—especially when we take into account that the inflation rate chips away at any interest savings we may have. And let's face it, almost anyone can make financial savings. Saving money is such a bad strategy for planning for retirement that we've even labeled it a scam.

Scam #5: Save Money.

Saving money is not, in fact, the solution to the retirement issue that most face today. It might improve our mood, but it won't make things better. Even worse, saving money doesn't teach us anything about how money functions in reality. It is not personal finance wisdom. It is merely standard, unoriginal thinking.

Investing the saved money for passive income is the solution

We will need to do much more than simply put a small amount of money aside each month and let it sit in the old bank account if we truly desire financial security and independence in our lives including retirement.

It's not that we shouldn't save money; rather, we should save with a goal in mind. money is barely worthwhile to leave money in a bank account until retirement because the return is so low. It's really difficult to accumulate enough capital for a comfortable retirement. Instead, we should set aside money with the intention of investing it for higher returns in the form of passive income, and capital gains income.

When we know how to invest our money, we can put it to work for us, increasing the rate of return from one percent (what a friend's 4-year-old boy is getting on his freshly opened savings account) to 10, 15, or 20 percent returns or more.

Master Investor partners and its operations have achieved infinite returns on his investments thanks to the effectiveness of investing with other people's money (OPM). Whether that is using good debt, or capital form investors. 

Changing our mindset

We can receive advice that saps our desire to work for a living as people are ready to start drawing pensions checks in retirement. This can include remarks that discuss the financial cost of things like increased taxes, diminished social security benefits, or work-related expenses. A person can even feel scared by the prospect of retiring with a higher tax rate if a person earns too much money.

These are but a few illustrations of the underlying issue with the majority of retirement advice. It assumes that you must be poorer in retirement rather than richer. It's unfortunate that the majority of people have to worry about having too much money in retirement, and it illustrates the contrast between two quite different mentalities.

The mentality of scarcity

There are two different types of financial issues. Too little and too much money. Which kind of financial issue do we want?

There is never enough money for individuals who have a scarcity mindset. Even worse, when it comes to retirement, having too much money becomes a serious issue because people are terrified of all the forces that can take it away, like taxes.

Because they are preoccupied with not having enough, people with a scarcity mindset fail to see opportunities to earn more money.

The persistent anxiety that permeates the scarcity mindset prevents creativity.

The lack mentality puts people in poverty.

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The attitude of abundance

People who have an abundance mindset have a completely different perspective on the world. They view the issue of having too much money as a positive one rather than one that should be avoided.

The issue of having too much money does require a solution, as with all difficulties. However, with the optimism that comes from having an abundance mindset, we can come up with inventive ways to leverage excessive amounts of cash, such as making investments or starting a company that pays taxes.

The abundant mindset comes at a price: our time. We use our free time to think creatively about money and pursue intriguing topics that can earn our money rather than engaging in activities like shopping or watching TV. Some people make a living off their interests. Others turn their businesses or investments into a pastime. They spend time with friends who share their opinions and frequently fantasize about the future rather than lamenting the present.

People who have an abundance mindset lead fundamentally different lives that are probably more satisfying.

What kind of life do we want?

We are unable to offer us a solution to our retirement savings problems. People have the choice. However, we are aware that adopting a scarcity mindset will never lead us to financial freedom and wealth.

The scarcity mindset is familiar to many, and it can be difficult and frightening to change our perspective. It's worth it, though.

And if we know someone who might have to work till they pass away, be a decent friend and let them know there is another way.

Always keep in mind that a different today leads to a different tomorrow.

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• What are the 10 New Rules Of Money? 

• How to build cash flow with the internet? Turn Passive Income On

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