I'm a bit of a gamer. I spend a fair amount of time, and sometimes a fair amount of money, on PC gaming. Usually these are “bigger” titles, like Borderlands, Diablo, and other triple A titles, but sometimes I get sucked in to smaller games. Sometimes these are little indie games, like those featured in the current Humble Bundle, and sometimes they are games for my phone, like Real Racing 3.
Recently, however, I've been stuck on a simple little game called “Cookie Clicker“. It's pretty much as simple as it sounds. You click on the cookie, and you get cookies. You keep clicking, you keep getting more cookies. The faster and longer you click, the more cookies you get. Luckily, there are some alternate ways to earn cookies. When you've clicked enough, you can invest into “buildings” that will assist you in earning more cookies automatically,without you having to do anything. Here's a couple of things you can think of while you're frantically clicking away on cookies.
Make Your Money Work For You
You need a lot of cookies to “win” at this game, and you need a lot of money to retire in the real world as well. For most people, you'll need more money to retire than you think. That's the bad news. The good news is that you can make your cookies work for you by investing in grandmas and factories to create more cookies. Likewise, you can make your actual money work for you by investing it.
There's lots of different ways that you can go in order to invest your income into additional revenue streams. You can get into the real estate business, either by becoming a landlord, by flipping houses, or by investing in an index of the real estate market. You can make other financial investments as well, like into your RRSP, or into your TFSA, or one of a million other options.
The main thing to do, in all situations, is to just do it. In the game, you cannot progress unless you start investing in buildings that automatically produce, and likewise, in real life, you'll have to invest in order to get ahead. Going paycheck to paycheck can only last you so long, so if you ever want to stop working, you'll need to look into your investment options immediately.
Do Research Into the Best Investments
The most important thing to do is to just start saving and investing. It doesn't matter how old you are or when you want to retire, the best day to start investing is today. The second most important thing is to make smart investments.
Not all investments are created equal, and nobody is going to be more capable of making the best investment choices better than you. There are brokers that will do your investing for you, but they can be motivated by making the most money, taking the highest percentage, or other alternate motivations. Only you know what type of investment you are comfortable with, and with the correct type of research, you'll be the best person to make investment decisions.
There's other resources that are more capable of explaining what those options are, but here they are in very broad terms. All investments will have some level of risk. There is no “sure bet” when it comes to investing your money. There are, however, differing degrees of risk that you take when you make certain investments.
Real estate, for example, has historically been a pretty solid choice (except for around 2008). So if you want an investment that is pretty stable, then real estate is probably a good choice. You need to live somewhere, after all, you may as well use your home as an investment property. Just make sure you do your research about home prices in your area, and consult local realtors, friends, and neighbors about market trends and city developments.
Our home, for example, is located close to a new development that won't be done for a number of years. Right now it has no effect on our property values, but in 5-10 years, it could have a dramatic impact on our home's resale value. This wasn't the sole reason we bought our home, but it did contribute. Make smart investments, and they will repay you over time.
You Can't Click Forever
Most people don't think about retirement until they are nearing retirement age. This is a poor way to go about it. No matter how old you are, you should be seriously thinking about best and worst case scenarios for retirement.
Typically, you can assume that you'll retire at 65. If you are around my age (late 20s) then that is an extremely long time away from now. If I doubled my age I still would not hit that magical time of life. That being said, now is the best time for me to figure out when I want to retire, and how I'm going to make that happen.
In Cookie Clicker, you can click all you want, but soon enough your investments take over for you. Every click gets you a cookie, but why would you bother when your investments are making you 20+ cookies per second? It hardly makes a difference, so there quickly becomes no point. Sure, there are upgrades and investments so that you can get more cookies per click, but it very soon becomes such a small percentage of the cookies that you're earning that it just doesn't feel like you should bother.
Even in your ideal retirement plan, you won't be working forever. In a worst case scenario, an accident, sickness, or injury could force you into an early retirement, preventing you from “clicking” any more. Make the right sacrifice now and it won't matter, and if you're clever, you'll plan to retire early. If you're happy, healthy, and fulfilled by your work, there's absolutely no reason to quit when you're 55, but if you can plan to retire a decade earlier, why wouldn't you?
Are you making your money work for you? What's your plan for retirement?