To be honest, it worked for a while. But the moment President Nixon took the dollar off the gold standard, every idea of retirement savings was sentenced to go down the tubes. But nobody paid much attention. Money devaluation didn’t start in 2008 with quantitative easing. It has been happening quietly all the while, eroding the value of money. And today, the rich don’t have retirement savings and if you are smart, you shouldn’t too. Let me explain.

The 401k Mirage

If you asked the average American what the 401k is, they will answer that it is their retirement plan. That is where their retirement savings are.

And yes, I know some super-rich people who have retirement accounts. But the magic is in how they use it. The rich people I know with a 401k account do not use it as a “retirement” account. They use it as a financial tool for the advantages it gives them today. They use it for the present, not the future.

Those rich people want to find out how much they can have in there. They want to know how it can be used to reduce their taxes legally. They want to know the limits and flexibility of it. And they use their 401k accounts for what it can do today.

Let me repeat that in case your mind skipped it:

They are not putting money in naively like the middle class hoping it will pay off in the future. Why? The rich understand how money works.

The rich understand that you have to constantly weigh your position. You can hold money in different forms — currencies, gold, silver, commodities, stocks, bonds, bitcoin, etc. The secret to staying wealthy is knowing which ones to hold your money in and how to properly allocate that based on the current economic climate.

But most people don’t pay attention. Many have been putting money in their 401k for years and have not even checked their account in 2022.

If there is one thing you take away from this article, even if you want to stop reading now, it’s okay. Go check your retirement account if you haven’t done so in a while. You don’t have to do anything. Just go look.

Awareness is the first step.

Retirement Isn’t What You Think It Is

A few years back my mum retired as a nurse. This year, she went to take a job as a tutor at the nursing school. Yes, she is damn good at her job. Yes, she retired relatively young such that she got multiple job offers immediately after her retirement but said no. And yes, she had sizable retirement savings when she left. But she took a job this year for 2 reasons:

1. Retirement is boring

2. The retirement savings cannot continue to sustain her lifestyle going forward

People forget that their tastes change. They forget that their lifestyle does change. You started saving for retirement when you were living on $50k per year. But you retired when you had a lifestyle of $250k.

Even if you live in a modest European or Asian city, the math is not good. There is no simpler way to say it. Retirement sucks.

If you think deductions on your earnings today will keep you on the lifestyle you want at 65+, you must be living under a rock. You have to understand that retirement plans were not set up because someone wanted to care for senior citizens and aged people.

Remember, governments collected retirements from companies on behalf of people. But after a while, they stopped it and allowed what we know today as Pension Funds to take over. Retirement plans were never about caring for people when they retired (even though they make it seem like it), it is about taking more money from people’s hands today.

In fact, it is rumored that the 401k was created so that the average American could earn less and put money in the stock market. It doesn’t matter whether you know what you are doing or not. Just put your money in.

While there are great advantages of investing in the stock market and countless people have gotten rich, it is a doom recipe if you don’t know what you are doing.

Think Like the Rich

Most people never factor in the cost of their money choices. And this is where the rich play differently. One person says, I have invested a total of $100k in the stock market over the last 10 years and now I have $212k.

Here are questions the rich would ask:

• Did you adjust for inflation?

• What did you invest in?

• Did you check the other investing alternatives to see whether your results outperformed or fell below par?

Most people don’t even know their options. For example, some people reading this can have the belief that you can only invest your 401k in the stock market. And that is wrong.

But I’m a bit on the extreme. I don’t have a 401k. I may have one in the future if I need the tool to create some financial engineering system. But I’m sure not having one because I want to “save for retirement”. I don’t mind working till the day I leave this world. This is the hack of the rich — buy yourself a job you don’t mind doing for the rest of your life. I could be 115 years old and still be doing this.

Think like the rich. Stop comparing trees and stones. My coach would say that if you don’t know what your options are, then you have no options. If you have no options, you are like the guy on the poker table who’s got mirrored sunglasses. You think nobody can read you, but everybody can see your cards.

Act Like the Rich

The first step in preparing for the future is to understand today. If you don’t understand today, you are going to get the future wrong. Dead wrong.

And that may be very costly. Just ask Mark Zuckerberg. In my opinion, he misunderstood the metaverse fad. Now the empire he has built is bleeding money (in 2022) because of it.

Do you understand what you are doing with your money? Do you understand the state of money today? Do you understand what you are doing in the stock market? Do you understand what you are doing with real estate?

There is no such thing as retirement savings. Some people are collecting your money and deciding what to do with it. If you want to be rich, you have to change that. Get in the driver’s seat.

We live in a time when the global economy's fundamentals are changing. If you are not armed with the knowledge to decide what you should do with your money, you will likely experience some financial bad news soon.

As Robert Kiyosaki says, there are no good or bad investments but there are good and bad investors. Don’t be a bad investor.

Conclusion

Super-rich people don’t have retirement savings because they know retirement is BS. Your savings will never be enough (based on how your lifestyle has grown).

And because you are working all your life and paid little or no attention to your investing (disguised as retirement savings), you reap the rewards of being a bad investor.

Know what to measure against. Know what your options are. Be proactive. Have an investing philosophy. Choose control. Choose passive income sources that you understand. Play the investing game in the present. Don’t be a spectator.

I rest my case.