In a great book the I’ve just finished reading by author Erin Botsford, “the BIG RETIREMENT RISK; RUNNING OUT OF MONEY BEFORE YOU RUN OUT OF TIME”, I learned a whole new way of thinking about investing money, and I want to share it with you. Here are the key points:

A) In retirement, cash is king–in other words, cash flow or income is the kingpin of your existence. Well, that’s not exactly “news”, I know.
 B) Investments that provide cash flow can be broken down into these three categories:

  •  Lifestyle Investments
  • Hybrid Investments
  • Non-Lifestyle Investments

Botsford explains that most of us who are so-called, “retired”, probably think of the income that feeds our retirement years as that which we worked for and invested as our pension or Social Security monies. This will include 401Ks, and pensions established for independent business owners. She describes theses sources of income as “Lifestyle Investments.”  This is the source of essential elements of our lifestyle: rent or mortgage, food, utilities, insurances, car notes (if any), basic clothing, etc.– kinda like the “Safety” level of “Maslow’s Higher Archy of Needs.”

The next category, Hybrid Investments, are those that are based on solid sources, such as rental properties, royalties, bonds, and some stocks, but they don’t always yield the same income month-to-month that you can count on. This source, can, however, augment the Lifestyle stuff from time-to-time, or it can supply cash for the next category, Non-Lifestyle Investments. Non-Livestyle Investments, according to Erin Botsford, is money that you might have acquired through unconventional means: inheritance, bonuses, lottery, or other “windfall” sources. It can also just be money you saved for those special DESIRES: a great vacation, a summer cottage, a boat or motorcycle, grandchildren’s gifts, education–you get the point–you don’t NEED it, but it sure would make life sweeter if you had it–paid for!

Looking at the issue of having enough money to live on during retirement was scary, and it generated a huge question mark in my mind, until I began to think about my income in this compartmentalized way. In addition to ordinary income, It has helped me to decide where to put money that I receive from part-time work, ancillary side investments, and the lottery that I’m sure to win someday!  What’s more, it has increased my awareness of cash expenditures that don’t fit into this plan, and that exploit my plans. I’m a new creature! I am very grateful to Mrs. Botsford for her enlightening book. I hope that sharing just this much of it with you has been helpful, too.





  1. nba Says:

    great points altogether, you just won a logo new reader.

    What could you suggest about your post that you simply
    made a few days ago? Any positive?

  2. Shirley Robinson Sprinkles Says:

    I didn’t mean to sound negative–but I can see how the words I used could have created that perception. Admittedly, I am a little nostalgic about differences that I observe in how kids today are growing up compared to those of the previous 2 generations. Most of my friends ( old-timers like me ) bathe in the same nostalgic waters. Maybe we need to get out more!

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