I don’t know if you have heard of the “Three Legged Stool” pension model before, but it is an old model that financial planners used to describe the three types of income for a secure financial retirement.
The Three Legged Stool describes the three parts to a successful retirement, which are:
- Personal Savings.
- Employee Pension.
- Government Pension.
Sadly, our grandparents were probably the last generation to benefit from it because times have changed and the above are no longer considered ‘secure’ forms of retirement income.
Interest rates for personal savings have been at their lowest for decades and so keeping your money in a savings account is not a good way to earn an income.
Workplace pensions may sound like a good idea, but they are a cynical ploy by the government to put the pension responsibility onto companies and their employees because…
They are slowly running out of money and the government state pension will soon come to an end.
The reason they keep pushing up the retirement age is so that they:
- Start paying people their pensions a few years later as a way to save money.
- Have people earning a wage longer so they are not drawing from the government pots.
- Are generating extra tax and NI contributions to help cover the pensions they are paying now.
It has been predicted that unless something drastic happens soon, the pension pot will dry up within the next 15 years.
In our grandparent’s day, companies often paid into a pension pot for their employees, but they became expensive to do and the government would occasionally ‘raid’ these pots when they needed more money leaving workers with less than they were expecting.
Eventually companies stopped running employee pension schemes leaving employees and the government (who were already collecting pension payments) to be responsible for their own pensions.
The government have since forced companies to offer workplace pensions as a way to ‘past the buck’ once again.
Sadly, with job security at an all time low, and people swapping jobs regularly, it is not easy to keep an eye on what workplace pension you are (or were) paying into.
Some people have paid very little into a workplace pension that it would actually give them very little back in return.
Every company has their own pension provider and the average Brit may now have several workplace pensions that should be somehow consolidated.
So, the truth of the matter is this…
You cannot rely on the government, your workplace pension scheme, or your savings to pay you a decent income during your retirement.
This then brings you round to the new “Three Legged Stool” pension model, which is:
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- Government Pension.
- Personal Pension Plan.
- A Dedicated Retirement Income.
For those who are not yet retired and drawing a pension it has been advised that you should start a dedicated retirement income stream that you can work on during your retirement.
Obviously, that income stream should be one that doesn’t require a lot of hard work.
The last thing you want to do during your retirement is to be doing 8 hours of hard work each day.
What you need is something that is as close to a passive income as possible.
Passive income is where you earn money and do nothing for it.
An example of this would be a company owner who is paid an income from a business that runs itself.
A business that runs itself would have a workforce, a manager, and an accountant etc.
Every aspect of the day-to-day working is done by someone else; all the owner needs to do is receive money each and every month.
The other form of passive income is where you earn money each month from financial investments.
For most people, a passive income is less achievable than a semi-passive income.
A semi-passive is where you make a decent amount of money for very little work.
This is probably the number one form of ‘passive income’ you hear about online.
Far too many people online are talking about passive income when they are really talking about ‘semi-passive income’.
Just because you receive payments overnight while sleeping or while you were enjoying a meal with your family doesn’t make it a passive income.
Not when you consider that you first had to spend hours crafting content to get people to your product sales page.
Anything that requires work is not passive.
But, there are incomes which require different amounts of work and those that require little are called semi-passive income because you earn a decent amount of money for doing very little.
Spending an hour each day to generate more than the average monthly wage is a good semi-passive income, wouldn’t you agree?
Would that work for you?
Would you be happy to work a couple of hours a day if it generated more than what you earned while working full time as an employee?
As with most things, the passiveness comes after a certain amount of work at the beginning which is why it has been suggested that people in their 50s and 60s, and even their 40s, make a start as soon as possible so that by the time retirement comes around, they have an established business that requires less work and is paying out a decent income each month.
Most people do not like the idea of starting their own businesses and as they get closer to their retirement age they may like the idea even less.
But the good news is that as we get older, the tools, services, and technology that are used today become simpler and easier to use.
For example, I watched a short video the other day from a guy saying that he makes money by simply using his smartphone to record short videos which he then shares online on multiple platforms.
Those videos are edited using a free software called CapCut – there is a premium paid version but he usually only uses the free version – and a description is written in the free-to-use Google docs which he copies and pastes into the description boxes when he uploads them to several platforms.
Those videos then point to a specific sales page where he makes money whenever anyone purchases a product.
That is all he does.
He uses nothing more than his smartphone and free apps and tools.
It takes him an hour or two to knock up a few new videos which he shares over several days.
Now, I am not saying that this is something you would want to do, I am only telling you because I want you to realise how easy things have become.
None of what he does today was doable just a few years ago.
The idea of recording videos on your phone would have been unimaginable years ago, let alone the idea that you could share them with potentially millions of people for free AND earn an income from sharing them.
Today, it is just the norm.
People are using their phones daily to record videos which they are sharing online.
We are living in the the most documented period in all of human history.
Everyone is documenting their lives and sharing it online for other people to see.
The smart ones are doing it intentionally to earn an income.
Now, as I say, this is probably not something that appeals to you… but again, I wanted to highlight the potential of the phone that you are carrying around with you.
It is incredibly powerful when you really stop and think about it.
Another example is that of Dan Edwards who makes money using his smartphone, the Betfair app, and football games.
He never sees a game through to the end, though.
Why doesn’t he wait until the final whistle?
He doesn’t need to.
He usually ‘cashes-out’ in the first half.
If you would like to know why he ‘cashes-out’ during the first half, go here:
The Z15 Profit System
Kind regards.
John Harrison.
PS… Thanks to apps and mobile data, this can be done from wherever you are using a smartphone or a tablet.
It takes a few minutes to learn and a few minutes to implement. It is one of the simplest methods we have ever shared.
Here’s that link again:
The Z15 Profit System
