Retirement are you ready for it, did you plan well enough, where you informed enough?

Fifteen years ago, invited to a seminar for small business, I discovered a fact I was unwilling to face. The seminar covered financial planning for the future, and our standard of preparedness. Being in a small town, the seminar attended by only fifteen business men and women.

The financial planner, expert, or wizard, I'm still not sure what he was, let's call him the Guru, delivered within the first fifteen minutes of his opening, nothing except bad news for us all. You see on entering, we handed a blank sheet of paper and requested, without names or any personal details that could link us to that paper, to supply certain details. These details where to include age, bank balances, debits owing and being owed, financial planning for retirement, financial turn over of the business, investments, insurances and savings.

The Guru spent ten minutes looking over the papers and delivered his opening statement. Of all attending, not one of us would be in a financial position to retire at age 65, if at all. That 85% of us did not have a business that could, under the present income and future, ever place us in a better place to improve these circumstances. This was devastating news, but if the truth be told, probably not unexpected by some. The Guru then explained why this was. His theory, that financial circumstances, linked to world trends, follow a curving line alternating between the positive and the negative. His theory, we all belonged to a generation, experiencing a negative downturn.

His theory, that the generation before ours, subsequent to the end of world war two, born to a period of growth and prosperity, low-interest rates as well as lower inflation, where better placed to save. Our generation, born to a period of easy available money, (banks offering loans against value inflated security) high interest rates, increasing inflation and general “See what tomorrow brings” attitudes, would need to drastically change our thinking. He continued that the following generation would be the financial Gurus. Those that would enrich themselves and either continue till meeting their demise, or would retire early and set up smaller retirement businesses suited to their life styles, enabling a time for playing.

His solution, take the risk and grow the business, increase savings, invest in property, or find an employment in which you can work till incapable of continuing, and then retire on the meagre pension that your investments will supply.

This is not the news you need when fifteen to twenty years away from the promised period of retirement. Retirement Annuities, promised to insure your financial freedom when retiring, had little to no growth, the decisions to continue or end, difficult. Should this money be used elsewhere, to grow the business as suggested, invest in other enterprises, or buy property. The discussion that followed and the questions asked of the Guru on completion of his seminar, heated, to say the least.

Your first reaction is to defend the small business that you started years earlier, and built to where it is today. The growth of income you expect or foresee in the future, the expansions you have planned, the very fact that you see this business as your retirement. In the future, run by someone else, that can pay you a pension and even buy it from you, making you financially independent. The Guru warned us all, that the future in our country, would depend upon our ability to adapt to the foreseeable changes envisaged.

Tightening financial controls due to world economies collapsing, runaway inflation rates, increasing unemployment and more competition. More small businesses would open, being the only survival route for an unemployed skilled labour force. These the retrenched, with packages of cash to start their own businesses, would fight for segments of the available market in the only way they knew, slash prices!

The predictions of the Guru fifteen years ago, did they come true? Yes, his ability to foresee the coming trends, remarkable. Did we all follow his advice? Most tried, but found the going impossible to keep up, financial constraints, belt-tightening, increasing overheads forcing closures and the reassessment for use of existing finances. Of the fifteen that attended only one is in place to retire without compromising his standard of living. The the rest will get there eventually, but not without a major compromise to their standard of living. Others unfortunately, due to their type of vocation, will need to work till the end, and this they can only do by maintaining their own small business.

The next generation is already in a commanding place to continue till time suits them, for whatever they see as their future. The work hard and play hard attitude of this group, will make sure of their future. Is this the case for all of them? No, but those with enough “savvy” and drive will survive, education not being the backbone to success today, the ability to “grab the opportunities” and “milk the cow” will see this generation carry out their dreams.