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After reading many articles about retirement, I have come to the conclusion that most of the financial advice addressed to consumers is bad advice. From the perspective of conventional wisdom, the advice makes sense. The problem is that conventional wisdom is not very wise because it is based on a limited understanding of money.

The essence of much financial advice about retirement is that people have not saved enough money. Experts warn that prices will go up and up. You will probably need more for medical expenses as you age. And worst of all, you might live 20-30 years after retirement at age 65 and will probably outlive your money.

Retirement articles usually explain all the ways you can calculate how much money you will need, what costs will go up and what costs might go down. (They assume that you will pay off your mortgage.) They also assume that your own sources of money will be retirement funds, pensions, and Social Security.

Every single one of these money fears is based on a single assumption. After you retire from your job, you won't earn any more money. This is one of the biggest money limitations imaginable.

You must anticipate an uncertain future in which the money available to you is limited by the amount of money you amassed in your earning years.

A related assumption is that the amount of money you have available to you in retirement also depends on the decisions of other people. Other people will decide whether or not you still have a pension, whether or not you still have Social Security income, the amount of interest you earn on your "safe" savings accounts and CDs, and the returns on your mutual funds.

Such financial advice is based on fear. Your only security is to amass as much money as you can while you are still earning an income, and then use it very carefully before it is all gone. You really can't depend on these other sources of additional income. In other words, you are essentially powerless to increase your wealth after you retire from your job.

There is another way to approach retirement planning based on a different assumption. The fact that you retire from a job does not mean that you retire from the capacity to make money. The fundamental difference is that you continue to make money in retirement and that you take an active role in creating new money.

Fundamentally, it comes down to the difference between earning money and making money.

"Making money" is not the same as "earning money." Making money is a skill that very few of us ever learned as wage and salary earners. When you "make money," you increase the amount of money available by selling something at a profit, not because you get more in your pension or Social Security or from the pitiful interest that the bank might pay you on your savings or CDs.

We live in an entrepreneurial age. People who have businesses understand that money is not only a commodity to be earned and then used up. Money is also a product you can create.

There are so many ways that people retired from their jobs can create more money. They can produce products, invest in real estate, trade Forex currencies, trade in the stock market, write books, do consulting and coaching, and a thousand other methods to make money.

When you know the difference between making money and earning money, you won't have to fear a future limited the amount of money you already have in savings accounts, IRAs, and pensions. And you don't have worry about outliving your money. It all comes down to knowing how to create money. You will either face a future of money limits or you will understand that you can continue to make money during all of those wonderful 20-30 years you live past your job.

Copyright 2006 Debt or Alive, Inc