The Capitalized Retirement: How to Ensure You Won't Outlive Your Savings

By Matthew P. Johnson

As someone who has been advising clients in the financial services industry since 1999, Matthew Johnson knows what he is talking about. For over two decades, Johnson has practiced the discipline of putting his clients first—a belief he inherited from his father who was also a financial advisor. Johnson knows how challenging the prospect of retirement can be for many individuals. And in The Capitalized Retirement he takes on the role of a personal advisor and walks readers through several practical ways they can maximize their retirement savings. The key is to switch from growth-oriented to income-oriented investment strategies.

The number one fear most retirees face is whether they will have enough money saved for retirement. With the average life expectancy on the rise, retirees are now asking themselves this frightening question: Will I outlive my retirement? In The Capitalized Retirement Matthew Johnson shares practical insights from his several decades of experience as a financial advisor.

Not only does Johnson walk readers through the basics of retirement investing, but he helps them identify the numerous pitfalls along the way. One of these includes the common myth that investing in the stock market is the only valid option for savvy investors. Based on his experience and understanding of the marketplace, Johnson helps readers understand why many financial planners do not always have their clients’ best interest at heart. And often, planners focus on incentives that might pad their own bank accounts at the expense of depleting the principals of investors. And in doing so, they’ve fallen prey to the “disease of ease” and do not have their investors’ best interests in mind.

While the topic of retirement is overwhelming to many, Johnson uses his plain-spoken style to give readers the understanding and confidence they need to make wise investment decisions. The key for retirees, as Johnson shares, is to switch from growth-oriented to income-oriented investment strategies. This simple change can make the difference between someone living a nightmare or the retirement they always dreamed.

• Language: English
• Publisher: Advantage Media Group
• Release date: Mar 5, 2024
• ISBN: 9781642258967

Matthew P. Johnson

MATTHEW P. JOHNSON is President and Owner of Johnson Wealth and Income Management, a third-generation company that has been serving clients for over 75 years. Matthew has been advising clients in the financial services industry since 1999. He strives to educate clients on how to invest for income, help to avoid loss by utilizing more conservative investment options, and is dedicated to helping them achieve a well-planned retirement. Johnson Wealth and Income Management is committed to educating its clients and the community through workshops on topics related to more conservative investment alternatives. He resides in Hardy, IA with his wife, Sarah, and their four children, Naomi, Lydia, Jacob, and Solomon.

Book preview

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INTRODUCTION

While there are many books available on the topics of personal finance, retirement planning, and investing, I wanted to take a moment and thank you for reading mine. I count it as an honor to have you as a reader, and my hope is you will consider this book as money well spent!

Before we begin, let me first state what this book is not. It’s not a magic formula or silver bullet. I haven’t packed the following pages full of technical jargon and complex concepts that will leave you overwhelmed and ready to give up. Likewise, this book isn’t a 50,000-word sales pitch designed to make you visit my website, sell you a service, or sign you up for extra products you don’t need and can’t afford.

Instead, my aim is to keep this content simple and easy to understand so that you can gain the fundamental understanding required to make better financial decisions. That’s the first objective.

The second is to open your mind to new possibilities. The possibility you can retire and have the life and the retirement you’ve always dreamed of. The possibility you can achieve the quality of life you’ve envisioned for your retirement. The possibility you can do it in a manner many consider to be better and safer than the conventional ways many of us were taught. A way that can help you live your retirement with much less worry and stress than traditional cookie-cutter methods of investing.

It was the famous horse trainer, Clinton Anderson, who said, [F]rustration begins where knowledge ends. I couldn’t agree with this statement more. So, let’s embark on opening your mind and exploring new ways of looking at your money. As we do, I am confident you will see how your money can be used as a tool to help you prosper, be a blessing, and create the life you’ve always wanted.

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CHAPTER 1

WHAT IS A CAPITALIZED LIFE?

First things first, let’s take a moment to clarify what I mean by living a capitalized life . In today’s highly politicized age, we must be very careful about the words we use. Certain terms can have negative connotations and can unintentionally offend. And, since the word capitalized is very similar to the word capitalism , I think it’s a good idea to distinguish between the two.

Capitalism, a noun, is defined as an economic and political system in which a country’s trade and industry are controlled by private owners for profit. Other words with the same meaning are private enterprise or free enterprise. A big benefit of capitalism is that every individual has and retains control over their fate. Through capitalism, we are free to establish and pursue our own goals. Many will say that capitalism has helped the United States of America become the great nation it is today.

Others might say that capitalism is one of the reasons why the gap between the haves and have-nots has grown. They’ll point out that corporate stock buybacks are an example of some of the negative aspects of capitalism. Stock buybacks result when corporations use some of their profits to buy shares of their own stock. Instead of reinvesting that money into research, equipment upgrades, or raises for their employees, this money goes toward supporting the price of the stock and ultimately benefiting stockholders.

The good news for you is that this book is not about whether capitalism is good or bad. Instead, this book is all about teaching you how to live a capitalized life and retirement.

So, let’s examine the root word, capitalize. According to the Merriam-Webster Dictionary, capitalize is a verb that means to gain by turning something to advantage. Used in a sentence: Sally was able to capitalize on her opponent’s mistake to win the match. And that’s exactly what we are going to discuss in this book. We’re going to talk about how you can take what you do have and what you have saved so far for retirement and find a way to turn it into something that works for your benefit.

I know this sounds easier said than done, but that’s why, throughout the book, I share examples and personal experiences where myself and others were able to capitalize on what we had and use it to create a more secure financial future.

We are going to discuss potentially new ideas and approaches to retirement investing. And we are also going to explore how you can improve your current situation by being resourceful and making use of out-of-the-box strategies that can provide you with the income you need to stay retired—and enjoy your life with much less stress.

It is my hope that after reading this book, you’ll realize that you do have what it takes to achieve financial security for retirement. But it is not just about your retirement. It’s about being able to capitalize on each day you are given to make your life better so that you can maximize your God-given potential.

I find it interesting that human beings might be the only species that never lives or grows to its true potential. Think about a tree. Trees don’t grow just a little bit and then suddenly decide, I’m tired; time to stop growing. No; regardless of the conditions they face, trees continue to grow. Despite the winds, the rains, the hail, the cold, the heat, they somehow find a way to continue stretching forth to the heavens, spreading their branches further and further.

With humans, the story is a bit different. Benjamin Franklin observed this back in his day when he said, [M]any people die at twenty-five and aren’t buried until they are seventy-five. Benjamin Franklin was a smart guy, considering he was one of the founding fathers and a brilliant inventor. So, what did he mean when he said we die in our twenties but aren’t buried until fifty years later?

Could it be that during our youth, our minds are at their best? They’re filled with ideas, creativity, and big dreams. Then, little by little, as we progress through life, we slowly start to rationalize that our dreams and big ideas aren’t so realistic.

Maybe as we enter our twenties and the responsibilities of adult life start to weigh us down, the parts of our brains responsible for things like dreaming, creativity, and positive thinking start to go into a state of atrophy during our mid-twenties. Atrophy is defined as a gradual decline in effectiveness or vigor due to underuse, or neglect.

This might be what Benjamin Franklin was talking about in that quote. Perhaps as the rigors of financial responsibility start to settle in during our twenties, we start to use our creativity a little less, give up on our dreams, and lose a bit of our positive outlook. And maybe as we go through our thirties, forties, and fifties, that part of our brain suffers a gradual decline in effectiveness because of underuse or following the path of least resistance and doing what everyone else is doing.

Think about it. When we are young, our imagination and creativity allow us to believe the sky is the limit for our hopes and aspirations. But somewhere along the lines, we become more cautious and more realistic about the possibilities for our future. We let go of that the Sky’s the limit attitude and begin to accept the stories we tell ourselves and the limiting beliefs placed upon us.

Sadly, it is often friends, coworkers, family members, and sometimes even teachers who might place these limiting beliefs in our minds. They might not mean us any harm. Most often, they think they are protecting us from failure because they think our dreams might not be realistic.

The Elephant and the Rope

There’s a well-known parable of the elephant and a rope that does a great job of illustrating the tremendous power that limiting beliefs can have on what we’re able to accomplish in our lives. It goes something like this.

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A man was walking down the road when he passed a group of elephants and noticed these huge creatures were held in place by nothing more than a rope tied to their leg that was secured to a spike in the ground. These weren’t special heavy-duty ropes or spikes. Just a regular rope and spike. It seemed obvious to the man that, at any time, the elephants could kick their huge legs to break free from the rope and escape. But, for some reason, they didn’t. Intrigued, he asked the trainer why these mighty beasts did not attempt to break free.

The trainer explained that when the elephants were younger, and much smaller, they used the same-sized rope and spike to secure the elephants. Sure, the young elephants might try to escape, but the rope and spike were strong enough to withstand the efforts of these small animals. After attempting to get away a few times, they would eventually give up.

After that point, the elephants simply accepted the fact that the rope and spike were strong enough to prevent them from escaping. And even after they had grown to their full size and strength, the elephants do not realize that they can easily snap the rope and be free—if they only tried.

The moment the elephants accepted the limiting belief that they could not break the rope, this became their reality—whether it was true or not. And, unfortunately, many of us have accepted some sort of limiting belief in our lives, relationships, and finances that hold us back from achieving our full potential.

We allow our circumstances, other people’s opinions, and external limiting beliefs to hold us back. Many of us go through life not realizing we do have what it takes to achieve our greatest dreams—if we only tried. Where many could continue to grow, we stop. Where we could become and do so much more, we simply give up.

Or, maybe like the mighty elephant, we just don’t realize we do have what it takes to reach new heights. A big problem with this way of thinking is that it’s unfair. Not only is it unfair to you, but it’s also unfair to those around you. Someone once said that cemeteries have the richest soil in the world, because buried in them are all the ideas, inventions, designs, patents, and formulas that could have made this planet a better place.

This is especially true when it comes to the way we manage our finances. If you accept a limiting belief and allow it to dictate where you will end up financially, it has the possibility to negatively impact not only yourself but also your family, friends, and loved ones. Consider for a moment what life would be like if Thomas Edison had given up on this dream to create the incandescent bulb. What if he had listened to all of those around him who told him time after time, you’re crazy, it’s impossible, or it’s not realistic. How different would our lives be today?

The Power of Breaking Through Limiting Beliefs

Until we experience a breakthrough, it’s easy to hold on to limiting beliefs. Think back to when Roger Bannister broke the four-minute mile barrier in 1954. Prior to this point, this was a feat thought unattainable as for over a hundred years, runners had made one failed attempt after another. But after Bannister’s breakthrough, something fascinating happened. Just over a month later, a runner from Australia broke Bannister’s record with a time of 3:58. Three years after that, someone else broke that record. And today, this is a feat numerous collegiate athletes complete each year.

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Once Bannister broke through this limiting belief, it opened the floodgates for many runners to do so after him. It just took one person who didn’t buy into that limiting belief to show the rest of the world that it was possible. And, once others believed it was possible, they were able to do the same.

For many of us, where we are today is a result of the limiting beliefs we’ve accepted. While this is hard to admit, it’s true. Granted, we have no choice in being born a certain way or whether we’re diagnosed with a disability. But regardless of our situation, we do have the ability to choose how we let certain events impact our happiness, our motivation, our dreams, and our aspirations.

Each day we have the power to influence how the rest of our lives will play out. And it’s this ability to decide how we’ll live our lives, how we’ll handle the problems that arise, which will go a long way in determining if we are able to live a capitalized retirement and life.

Many years ago, a dear friend of mine, Pat, told me about how he had volunteered at a women’s prison to teach meditation. During one of his visits, he noticed something he didn’t expect. Some of these women seemed happy and content. Pat wondered how it was possible for these women, some who wouldn’t see the light of day for decades, to be so happy in a place most would consider miserable.

Reflecting on his experience, he said, I learned an important lesson from those women. I learned that each of us do have the ability to make a heaven into hell. And we also have the ability to turn a hell into a heaven; the choice is ours. It’s all in our minds. As shocking and simplistic as this might sound, consider this. Have you ever run into someone who was well off financially, yet they seemed to be miserable? They drove the luxury vehicle,