CHAPTER 9The Income Trap

How you receive money shapes the way you think about it, and affects your ability to create wealth.

No God has commanded worshippers to their pious duties more forcefully than income, as it subtly directs the fabric of our lives.

Gregory Clark

I remember vividly when my parents retired; they had a decent amount of retirement savings — just enough assets that they didn’t qualify for a pension. My mother, an intelligent, professional woman, said to me: ‘But what will we do for income when I stop working?’

I looked at her quizzically.

‘I need money each week to pay for the groceries,’ she explained.

The answer may seem obvious to you (or if not — hang in there), but the fact that it didn’t to my mother was a real eye opener. I was used to living outside of the Income Trap, but after a lifetime of working for a salary, she wasn’t.

Starting retirement should be the high point of a person’s savings in their lifetime. Sadly that’s often not the case for many people, but even for those people who have saved a nest egg, the transition from the regular comfort of a pay cheque to going without one can be a shock. I pointed out to my mother that they hadn’t really been living pay cheque to pay cheque before, so why did she think they would suddenly start doing so now?

She looked at me curiously, so I explained: ‘You shop weekly for food at the moment right? But you get paid fortnightly? How are you able to shop on the weeks when you don’t have a pay cheque coming ...

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