This week I was logged into my personal HMRC account so I could download previous year’s SA302’s for an HMO refinance. The portal had changed since I was last logged in and I was presented with a new dashboard showing options to look at ‘Income’, ‘Benefits’ and ‘Pensions’. I spotted a link to a ‘View your state pension forecast” so I clicked in for a bit of fun. …..the reality is far from fun however.
This screenshot attached shows exactly what I, and many others, would have to look forward to at the state pension age of 68 (which is what it will rise to for the late 70’s/early 80’s babies, and who knows how much it will increase for younger generations.)
What this forecast is telling me is this – for a man born on or after 6 April 1951 and
a woman born on or after 6 April 1953, if you’ve had at least 10 years working where you paid National Insurance contributions, you’ll be eligible for a state pension of £8,797.31 per year.
So, if I had spent everything I earned by age 68 and not invested in property or private pension, my income would be £168.60 per week, which is £733.11 per month. We all know you can’t do much with that, it doesn’t even rent you a 2 bedroom property in the East of Scotland. Thankfully that will not be my reality, nor will it be for anyone else who has figured out a way to significantly change their future for the better. For me the solution came from self education, specifically in the area of property investing, more on that in a moment.
In the same week I heard a talk from Tony Robbins and Dean Gaziosi on how there is a massive problem to be solved in the world- the problem being that the ‘traditional education’ system is broken. Whilst definitely not a catch all statement, in broad terms, the real world of commerce and industry has advanced beyond the ideals of traditional education. In other words, the plan of yesteryear to study hard at school, progress through higher education, get a good job and retire with a pension is outdated.
The talk I was listening to cited a statistic that only 27% of graduates get a job related to their degree and of those people 52% hate their job. While these are US figures I would imagine that would likely reflect a similar picture in the UK.
[Just to be clear, I’m not saying that university is bad choice, I loved the experience and I hope my kids will too, what’s changed however is that traditional education can no longer be the ONLY option as it’s no longer delivering, and many authors, speakers and mentors are saying the same thing. In fact, Robert Kiyosaki has been telling us that message ever since he published Rich Dad Poor Dad back in 1997 (ironically around the time I was about to go to university).]
Tony and Dean went on to share that the ‘problem is solved through self education’. And I really do agree, as do many others. Jim Rohn is famed for saying,
“Formal education will make you a living; self-education will make you a fortune.”
The knowledge industry is currently estimated to be worth about $355m/day and Forbes Magazine predicts that in 15 years it will be worth $1billion per day. These figures in themselves validate the point that the smart people in today’s economy would rather pay for specialist knowledge (delivered by someone doing the thing) where they can action it immediately to get a return vs learning from professional teachers teaching things that are out of date. The smart people are choosing to cut their learning curve in half and accelerate their results by investing in specialist knowledge shared by people who have the results they want.
CIRCLING BACK TO THE PENSION CHAT
According to research by insurer Royal London in May 2018 called ‘Will we ever summit the Pension Mountain?’, you’d need a pension pot of £260,000 if you want to avoid an uncomfortable retirement. This sum would provide a pension income of just over £9,000 a year in addition to the new state pension of £8,797 a year.
Would £18K income a year support the kind of lifestyle you want to lead in retirement? I’m guessing you’re all thinking a resounding ‘definitely not!’. Research shows that amount would only really cover basic living costs, no nice holidays, no extra needs covered. So what about provisions for elderly care, where would that come from?
It’s alarming to read that the average pension pot of UK workers is around £35,000! Clearly there is a massive shortfall for the average worker in hitting that threshold to avoid ‘uncomfortable retirement’. Hopefully not the case for you smart cookies in these property communities though, many of you have and are investing in self education.
My journey with self education started around 2004 with a book, followed by courses, followed by mentorships and masterminds, and the investment in all of these continues. I’ll be eternally grateful for all of the books, courses and mentorship that have contributed to the different stages of my property businesses, past, present and future. And whilst I have no intention of ever ‘retiring’ in the traditional sense of the word, I have peace of mind in knowing the actions I’ve taken to date, and will continue to take, mean that that come state pension age life will be more than comfortable.
What self education will help you create the life you want to live now, and in retirement?