Wealth Preservation: the endgame for an Early and Richer Retirement.

In this phase during your financial lifecycle your income generating assets should form the basis to pay for all your expenses in the form of dividends and interest receipts.

In other words, other people are paying you for your current and future expenses and outgoings.

The wealth preservation phase

Earlier, I mentioned that there are three distinct periods in ones financial life cycle, including:

I also mentioned, that in each phase of your financial life cycle there are a number of things you need to do. In fact in the wealth preservation phase, this is more important than ever in order to preserve your wealth, so I will repeat them here again.

What happens in the wealth preservation phase?

At the end of the accumulation phase of your financial life cycle, you have arrived in the rather fortunate situation that:

  1. Your immediate outgoings are likely to be getting smaller, in particular during the latter part, as your children have left
    home, you have (almost) repaid the mortgage, etc.

  2. Your income starts to exceed your expenses

  3. Your invested assets are starting to grow rapidly

  4. Your main focus is on maximising wealth for your ongoing richer retirement

You are at the stage that you have accumulated a sufficient amount of income generating assets throwing off more than enough money to cover all your current and future spending. Your cash flow cycle will look like this: Your assets form the basis to pay for all your expenses in the form of dividends and interest receipts. In other words, other people are paying you for your current and future stuff.

As you keep adding to your income generating assets, over time, your asset based income start to increase growing fast. Since this income is more than what you need you re-invest and re-invest.

Both your assets and your income start to compound exponentially which will further accelerate your income leading towards a richer and richer retirement.

At this stage, you may well start considering leaving your employment as a salary is not really required any longer to live comfortably. You will have reached the point that you have truly become financially independent.

Congratulations! You have reached the stage of a rich and early retirement.

What happens next?

Your savings rate may now start to plateau even to turn negative as you start to begin to live off your life savings, such as your pension(s), State Pension and investment income.

In this final stage of your financial life cycle your priorities should be completely focused on making your investments last long enough till the end of your life, and, to have a life style in relative comfort.

During this final stage of your financial life cycle, your main emphasises lies in:

  1. The need to preserve your capital,

  2. Generating enough income for an ongoing retirement in comfort

  3. To finance long-term care, if and when required

What do you think? Is this a realistic scenario?

Share your thoughts with us whether you think that this is possible or not.

Return from this page to Earn To Save Page
Return from this page to Home

If you came here via a search engine, you might want to go back to my main page on early retirement and investment

Do you think that early retirement
is possible or not?

Do you agree or disagree? Share your thoughts with us

[ ? ]

Author Information (optional)

To receive credit as the author, enter your information below.

(first or full name)

(e.g., City, State, Country)

Submit Your Contribution

  •  submission guidelines.

(You can preview and edit on the next page)

Get detailed information on shares and dividend prospects of many
FTSE350 companies completely FREE of charge!

Subscribe to
Dividend Alerts

and get the
Guide to Dividend Investing
at Half Price!

Your E-mail

First Name

Then Click

Check your email to confirm!

Don't worry -- your e-mail address is totally secure.
I promise to use it only to send you Dividend Alerts

Introducing Dividend Income Investor.com

What if you knew when high
quality dividend paying
shares are historically
undervalued or overvalued?

Wouldn't that be invaluable
information allowing you to
make much better informed
investment decisions?

Dividend Income Investor
1. shows you what we buy,
2. when we buy shares and
3. when we sell shares in
our own real-money
Dividend Income Portfolio

CLICK HERE to find out

By continuing to use this site, you agree to the use of cookies.

Click HERE to find out more about cookies and our Cookie Policy.

Get Your Guide to Dividend Investing for just £19.99.

Guide to Dividend Investing cover

Click Here to learn more.

Own foreign shares? Reclaim dividend withholding tax!

Dividend Tax back

Follow me at Twitter, click:

Get live commentary on dividend paying companies and updates of our progress at Dividend Income Investor.com