Jaspreet Singh Says You Can Retire in 8 Years: Here’s How
Written by
Heather Taylor
Edited by
Amber Barkley
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Retirement used to be described as a “three-legged stool.” These three legs included a pension, Social Security and personal savings and investments. These days however, money expert Jaspreet Singh said pensions have become a thing of the past, Social Security is starting to dry up and many Americans do not have enough money in savings to retire comfortably.
How can you retire sooner rather than later? Singh shares a video on his YouTube channel outlining what it takes to achieve financial freedom. Here’s how you can retire in eight years if you’re starting from $0.
Looking at the Retirement Crisis
Many retirees are entering into retirement without enough money to retire.
Right now, the median baby boomer has just over $200,000 put aside for retirement. The average baby boomer has $162,000 set aside for retirement. Baby boomers who want to lead a comfortable lifestyle in retirement, Singh said, need $750,000 to fund their retirement lifestyle. If the median and average baby boomer does not have this amount of money saved in their investments, they are very far away from being able to lead their lives.
Fortunately, there are a few ways you can start building this wealth now.
Two Ways To Achieve Financial Freedom
Those who want to build wealth can do it through savings and cash flow.
Savings is a traditional way to build wealth. Typically, most people follow the 4% rule, with which they pull out 4% of their wealth and live off of this amount of money.
The problem with this method, Singh said, is it doesn’t work so well during periods of high inflation or if you retire at a young age. Singh’s personal recommendation is to use the cash flow method. If you can create enough cash flow from your investments, you can live freely in retirement. This is because your cash flow can grow with inflation to continue funding your lifestyle.
An accessible amount of cash flow you can generate is going to be a 3% to 8% return. Singh uses the example of investing $100 and getting somewhere between 3% to 8% — or $3 to $8 — in cash flow from this investment. The reason Singh likes using cash flow to reach financial freedom is because you don’t have to sell anything to get paid.
How do you get this type of cash flow? According to Singh, you can invest your money into the stock market. This pays off dividends, which is cash flow. You can also invest your money into physical real estate.
Building Wealth With as Little as $100
You can start building wealth with as little as $100. Singh recommends getting started investing as soon as possible. Why? The people who have the most wealth don’t have the best jobs, the best titles or the richest parents. They’re the people who accumulate the most assets.
“The more assets you buy, the wealthier you will become,” said Singh. “You want to use more of your income today to buy more assets, whether it’s stocks or investing in real estate. The more assets you can accumulate, the more cash flow you can generate. The more assets you can buy, the more wealth you can build. It starts with you, starting.”
Avoid These 10 Financial Traps
Certain traps make it very difficult for you to build wealth. As you work to build wealth towards your retirement, avoid these 10 obvious and less-than-obvious financial traps.
- Taking financial advice from people who are not wealthy.
- Stimulating the economy. If you’re spending all your money today, you won’t have enough money to build your wealth tomorrow.
- Emotional investing.
- Avoiding 0% APR.
- Not financially planning for life events or to protect against an emergency.
- Saving all of your money.
- High risk or get rich quick schemes.
- Not investing in your own financial education.
- Spending money based on what you feel you deserve, not what you can afford.
- Getting comfortable, which prevents you from reaching any form of financial freedom.
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