LET THE MONEY RUN

It wasn't until I was 35 that I realized money could work for me. Of course, I knew that money could be invested and in return I would get a small portion back each year in the form of interest or dividends. What I didn't realize was that this money could be brought up to a level equal to my expenses, and then the money could be spent as if it were earned income. I think many people have the same mental block because the savings account is either so small that the annual expenses might only cover a night on the town, or because the savings in the retirement account are blocked and those expenses go right back into savings. This prevents people from thinking about capital income, just as deducting income taxes directly from your income before you receive your paycheck prevents people from thinking about taxes as anything other than an uncontrollable abstraction.

If you decide to make the money work for you, over time you will become very familiar with the tax code. How to take money out of retirement accounts while paying as few penalties as possible, and how to take care of the principal and keep the earnings sustainable to at least at a competent level. Again, individual plans will vary widely, but the guiding principles will be very similar. It is the general principles to follow over the next 100 years, rather than specific investment plans that may change over the course of a decade.