When the reality of saving for retirement sets in

As you approach your peak earning years and start to reap the rewards of the time and effort you have invested in your career, saving for retirement takes on a new sense of urgency. Having crossed the halfway mark in his career, Sikho Tatana shares his approach to long-term investing and sheds light on the lessons he wishes he had learnt sooner. 

When I started working, my views around money and long-term investing were very different. When we first start out, we don’t truly understand how our responsibilities and expenses will increase as we get older. We take our health and time for granted as we focus on living in the moment, under the assumption that the money will come. Like most of my peers, I spent the first few years concerned with furthering my education, establishing my career and meeting the needs that come with raising a young family. My focus has shifted in recent years. 

Long-term investing and retirement planning really become a priority when you have lived long enough to truly appreciate the value of time. With the bulk of your working years behind you, you have to make very deliberate financial decisions to make sure that you can enjoy your current standard of living and meet your financial needs in the years to come. 

Make money work for you
One of the most important lessons I have learnt is that you should make your money work for you. We spend a lot of time and energy working to earn our money, so it should return the favour. 

Most of us are all too familiar with how money can work against us: If we spend more than we earn and take on debt to fund our day-to-day lifestyle needs, we create long-term problems. Sadly, we are less familiar with how our money can work for us. It takes discipline to sit down, draw up a budget, and figure out how to use income to build lasting wealth. I encourage my peers to do the work, take the time to understand their finances, seek expert advice and invest in assets that will grow over time. 

Making money work for you also involves making tough decisions. The reality is that many of us are responsible for supporting members of our extended families and need to step in when times are tough and unexpected expenses arise. This can mean dipping into money that has been put aside for long-term needs. It can be extremely challenging to balance the needs of our loved ones with our future needs; I try to prioritise as best as I can. 

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August 11 2020 By Sikho Tatana - allangray.co.za Personal Investing