We shouldn’t have too many worries in our 50s. In fact, our main concerns should be improving the lives of our loved ones and how to enjoy our wealth.
However, too many people struggle financially in their 50s. To put it bluntly, you are behind the power curve if you depend on a job for survival in your 50s.
I don’t say those words lightly; however, I must say them. We all need a wake-up call on the perils of depending on an employer for our livelihood.
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I am talking from experience. For 20 years, from age 18 to 38, I depended on my military paycheck for survival. But that just got me further in debt.
Once I focused on acquiring assets and building passive income, my entire financial situation and overall happiness level changed. I’ll walk you through the steps.
- Planning for Retirement in Your 50s
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- Dividend Investing in Your 50s
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Converting from an employee to a big boss. Americans were once entrepreneurs: farmers, ranchers, doctors, store owners, and woodworkers. They all bartered and traded amongst themselves to build strong communal bonds.
The Industrial Revolution brought massive changes to people’s lifestyles. Most left for big cities to work in factories, and many struggled to adjust to the transition from entrepreneurs and owners to factory workers.
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During this time, people began to believe that working 40 hours a week would eventually make them rich. In addition, in the mid-1900s, corporations began giving pensions to their employees.
Employees with pensions, including myself, could completely avoid saving for retirement. They could save an emergency fund and know that they still had a pension to fall back on.
Unfortunately, we still have the “40-hour workweek” mentality and the pension mindset. Americans work 40 hours a week and don’t save for retirement. It’s time to change the status quo and start building passive income.
Working a job and building passive income. If you are in your 50s, it’s time to double and triple down on retirement planning—your job can help.
Jobs are essential tools you can use to acquire assets when you have none. However, once you gain enough assets, it is time to build businesses and passive income streams.
At age 38, my family struggled because of my lack of financial education. Eventually, I made a hard pivot to understand and build passive income.
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In 2020, I earned over $120,000 per year, but I saved and invested at least $50,000. I had an inner desire to be financially free.
At the same time, I started writing for my blog and publishing books on Amazon. I did this to create assets that produce passive income.
If you are in your 50s, you must have a plan to leave the workforce. With artificial intelligence on the rise, many people won’t stand a chance in the workforce. Let’s look at a high-earners budget.
Let’s say Phil, a 52-year-old, earns $15,000 monthly from his job. How much money should he save and invest? I would say he needs to save $2,000 and invest $6,000 per month for a total of $8,000.
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You say, “Josh, it’s impossible for him to save 53% of his income.” I reply, “Then he needs to continue working until he is 80.”
At what point do we understand the game? The game is that America wants you to keep spending indefinitely.
Then once you turn 80, you no longer add value to advertisers and producers. This is when they want to take your home through a reverse mortgage or long-term care planning.
How to invest 53% of your income. Being financially free should be uncomfortable. If it were easy, most people would do it.
In reality, most people do not want to make the sacrifices required to put themselves ahead of the game. How do you know if you are ahead?
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If you do not need to work a job and have income still coming into your accounts, you’re ahead of the game. How do you get there?
The most important thing you can do to get ahead is to lower your housing expenses. You can do this by moving in with your parents, getting roommates, or living in a destination RV. Pick your poison.
Then, you ruthlessly cut other expenses, such as food and entertainment, to align with your newfound passion for making money while you sleep.
I know it sounds like bullcrap, but it works. And once you get ahead, you’ll never have to look backward. Let’s review my situation.
Living like a king on passive income. I retired from the Marine Corps at age 42 in 2023. The government pays me $9,100 a month in pension income.
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My entire family can live comfortably on this income. In fact, I save and invest $1,500 per month from this pension.
Most military retirees are still in the workforce because they love to spend and upgrade their lives. We decided to live far below our means and our pension check.
More importantly, we still bring additional passive income streams from book royalties ($300), roommates ($1,000), rental properties ($700), dividends ($2,400), and college ($1,800).
You can do the same. When Phil reduces his budget to $7,000, it serves him two-fold: he saves more money and prepares himself to retire early.
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If Phil becomes an income investor and can earn a 10% yield on his money, he would need to invest $840,000 to earn $7,000 in monthly dividends.
If Phil invests $8,000 monthly, he can escape the workforce in eight years or less. The effort you put in equals the passive income you get out.
A strong word of caution. My friends, I write this as a cautionary tale. I am watching my friends in real life struggling to leave the workforce in their 50s—it’s not pretty.
If Phil makes $15,000 per month and lives on $15,000, how can he ever retire? To continue this lifestyle, he must invest $1.8 million at 10%.
My wife and I significantly reduced our lifestyle before I retired from the Marine Corps. Therefore, we knew we could handle it in style when we looked at the numbers ($9,000/month).
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2024 was our first full year of retirement, and our passive income and net worth all jumped significantly—and this was without working a job.
My friends all want to stop working but cannot imagine spending less money or living on a budget. It’s sad, really, but I can’t help.
All I can do is pass along the information via my writing. Let me say this one more time: There is nothing sexy about having to work in your 50s.
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Conclusion. It’s time to choose between living your best life in your 50s with a job or being completely free.
The best part is that if you learn about passive income and the power of compounding, you will have much more money without working than when holding a job.
My wife and I make much more money in retirement than when working, and it grows exponentially faster each year.
I can’t hold your hand on this one. However, as a retiree, I see the faces of people who want to be in my financial position. Unfortunately, they won’t take the steps to get there. I hope you are different. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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