Have you ever thought of Making Your Money Hard to Reach as a young investor? I’ve got your back today
A pile of savings that is serene and pain-free to reach is an easy solution to life’s troubles.
And to us that’s a bad thing, right?
Your car breaks and you use your savings to buy a new one. You get laid off and use your savings to carry you through until the perfect dream job arrives. Life throws you curve balls and tantrums and savings without barriers to protect them are an easy target for solution.
That is why I love the government-aided retirement plans with all the difficult rules and penalties you must overcome to access your money prior to retiring. These obstacles provide a measure of discipline for those who inherently deficient this life skill.
Even if you have the discipline of a celibate monk, the rules and penalties provide a formidable barrier for your inescapable moments of human weakness.
The rule is simple: When you build a nest egg for yourself, don’t raid it. Never borrow money from it for contemporaneous lifestyle and don’t spend a dime of it until after you retire.
Just relax and let it grow and grow until you are financially free. I know this is easy to understand but hard to live by.
That is why many quick-witted investors place their retirement money in hard to access investments like real estate or government-aided, tax-deferred retirement plans. This fortifies discipline by making the money just difficult enough to reach that you don’t raid your own nest egg when those inescapable “emergencies” arrive.
Retirement plans allow you to compound your money while deferring or avoiding taxes entirely (depending on the plan and your circumstances), while real estate provides tax savings and deferral through depreciation deductions and 1031 exchanges.
After thorough research, I got to realise that building wealth for retirement is not just about how much money you make, but about how much money you keep. That is why tax savings is a crucial element of your plan.
Conveniently, both real estate and government-aided retirement plans offer both tax savings and barriers to access, thus fortifying discipline while enhancing savings.
As a young investor, you would be wise to put these tools to your advantage. Are you in?
Autonomy to Financial Freedom 
I like those thoughts. Life insurance an option too
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Thank you Mr. Sidney. You are right about Life insurance.
Because ideally what most junior investors don’t know is; some of the money paid into your whole life policy accumulates “cash value” in the form of a tax-sheltered investment account that the policyholder can borrow against. Insurance companies like Prudential tout these policies as not only a way to leave a financial legacy to your heirs, but also as a good investment tool.
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