Guarding Against Rising Prices in Retirement

Everywhere we turn, it seems like prices are rising - up up and away! Where will it ever end? The truth is, there probably won't be an end to rising prices so what does a senior do about it when they are on a fixed income?

Therein lies an inherent problem with fixed incomes. Even if you're fortunate enough to have a inflation scalable income, chances are it won't scale enough. This is because the official rate of inflation' is dubiously low. The real rate of inflation will eat more of your retirement funds that you might expect.

The best source of financial padding is some sort of residual income. What is residual income? Residual income is where you do something once and you keep getting paid for it over and over again, well into the future. An example of residual income can be found in the entertainment industry.

Remember the show Kate and Allie from the 1980's? It starred Susan St. James and Jane Curtain. The show was a huge success in its day and is still shown in rerun on various cable networks. Furthermore, the entire series has been ported to DVD sets to be sold and rented. Every time the series airs on reruns or every time someone buys or rents a set of DVDs, those two actresses will get paid. So even though the series went off the air in 1989, Ms. St. James and Ms. Curtain still continue to receive income from it.

That is a classic example of residual income and the entertainment industry is full of similar examples. This type of income is rare outside the entertainment industry, however. Most people work at jobs their entire lives and then quit, get laid off, or retire. Once you leave a job, you no longer get paid from it other than a retirement fund. Retirement funds should not be confused with residual income since you paid into them all along (although your employer might have also paid into them). Aside from that, they are fixed amounts.

But fortunately, residual income is a hallmark of most network marketing businesses. This is one of the reasons why network marketing is such a good fit for seniors and baby boomers. By building a network marketing business, you can keep checks coming in many years into the future for work that you've already done. The more work, the more residual. This is wonderful cushion against present and future prices spiraling ever upward.