# Level 5 of 5 Money Management Levels - Investments and Preparing for Retirement

Note: If you're looking for step 4, you can find it here.

Congratulation! You're now at the last level of 5 money management levels.

Not so many people can pass level 1-4, so you can pat yourself in the back if you've done so. It takes  determination and sacrifices to be at the level 5.

Unlike level 1-4, level 5 is a continuous level, you will never leave level 5. You stay on level 5 for the rest of your life.

There are two major parts of level 5; Investments and Preparing for Retirement

Investments

I believe everyone should be educated on different investment types. Don't let financial adviser decide on what you should invest.

Don't get me wrong, we need to leverage smart financial advisers around us to help us get the best investments that fit our situation. But don't be lazy and think that you don't need to know about investing.

You're the ONLY person who should be responsible of your portfolio.

There are too many cases where people lost their money, because they trusted their money to an individual or corporations that promised them mouth-watering returns.

If an investment sounds to good to be true, it most probably is.

Retirement Plan

Do you know how much you need to retire?

Most people don't. They "kinda" know they need a lot of money, but not the exact figure.

As we know,  when something is not measured then it's not managed.

Let me tell you why you should know, it's because it is much BIGGER than what most of you think.


How much do you need to live your current lifestyle when you retire?

That depends on what country you live now, and how many years till you retire.

Let's look at an example:

Tony is 30 years old today, and he spend $3,000 every month. How much Tony need every month when he retires?

In the US, the average inflation rate is 3% / year, so every year from today it will look like this:

So, Tony will need to spend about $8,442 when he retires 35 years from now for the same lifestyle. Almost 3 times the current amount.

Indonesia have higher average inflation rate at 7%/year, so if Tony lives in Indonesia it will look like this:

Tony will spend $32,030 when he retires if he lives in Indonesia. More than 10 times of what he's spending today!


But my income will be increasing with the inflation right?

Nothing guarantees that. Perhaps, if you're good at climbing the career ladder, or managing your businesses. But again, it's not as certain as the inflation rate.

So if it doesn't open your eyes and convince you to start planning for your retirement, I don't know what will.