Income behavior marks well-differentiated stages or financial cycles throughout life:
The first stage, which goes until the age of 18, is the period of basic education and is characterized as a period without income, a period of dependence on parents.
At this stage the brain acquires and stores most of the financial paradigms that will shape our behavior throughout life.
The stage of professional training
The second stage, between 18 and 30, approximately, is the stage of professional training, in which we choose a career, a profession or a trade that allows us to start generating our own income, gain financial independence and Define our economic future.
It follows the period of the formation of the family, between 31 and 45. It is the period during which the income grows with greater acceleration, as well as the expenses. Here most of the essential goods are acquired: the house, the furniture and, finally, all the baggage that involves the development of a family. To achieve a good administration of financial resources, if it has not already been done, it is essential to start a regular Financial Planning program. The plan – as a whole – should be reviewed whenever there are important changes in our lives, such as marriage, the birth of children or similar events. However, there are parts of it, such as the budget for income and expenses, which should be reviewed much more regularly. Ideally, do it monthly.
Maximum financial development
The fourth stage, between approximately 45 and 55 , is that of maximum financial development. It is the period of consolidation of family wealth. Revenues will continue to grow, but with less acceleration, until reaching the top at some point in the stage. Then they will begin to decrease.
About 56 years of age the pre-retirement stage begins. The income decreases, but so do the expenses, since the children must have already begun to have financial independence. This means that we can maintain the savings and investment program for the pension fund without seeing our quality of life deteriorated. If we have not prepared in advance for retirement, we will have to start implementing an emergency plan, and cut costs drastically to try to have something for the retirement stage. It is preferable to do it voluntarily, during this stage, than to be forced to do so in the next, when our resources will be more decimated.
An adequate age to retire
And so we reach the sixth and last stage of life. Theory tells us that 65 is an adequate age to retire. However, the retirement age will depend on how we have prepared financially. If we have done it intelligently, we will have a quiet retreat and we can enjoy the same quality of life we had during the years of higher income. If we have not prepared, then we will not have a withdrawal as such and we will have to continue working to survive until the end.