Money frees you from doing things you don’t like. Since I don’t like doing almost anything, money is convenient. ~ Groucho Marx
Withheld and discouraged?
A study published in 2013 by Research Institute for Employee Benefits shows a record 28% of respondents, indicating that they have little or no confidence to ever retire.
Job insecurity, inflation, tax increases and continued high debt levels are just a few of the legitimate concerns that keep Americans from saving for the second half of their lives.
Another contributing factor is that the same monetary strategies that may have worked, albeit often in a hit-and-miss way in the past, are simply not viable in this new age of economic flux. The evidence of this failure is hard to ignore – it is literally all around us.
I would like to suggest that it is time to move on from conventional financial advice that has not served you well in the last few years and have a more contrarian approach to protecting and growing your wealth.
If you are like most people, you have been content to let your CPA, financial advisor, banker or broker handle the details of your financial future by relying on your monthly statements or an occasional phone call from the agent.
Maybe you’ve extended it with some bad advice from one of the financial entertainment TV shows or a newspaper column or two.
I would be so brave to suggest that you have to change your money habits now or risk being unprepared for what lies ahead.
In the future, I think you will find more and more of life’s big decisions; Decisions on everything from how to protect your cash to how to handle your healthcare land square in your lap. You need to be prepared to take a more informed and proactive role in these decisions.
Is what you’ve always done working as you expected? Are you where you want to be in life right now? Are you satisfied that you’ve done everything you can to ensure that you and your family have the best possible future??
If the answer is “no” to one of these questions, consider what I have to tell you very carefully. It may be contrary to everything you think you know about money, but it may also be just what you need to hear to avoid making mistakes with your money that you can never recover from .
Myth Connections: How what you thought you knew about money is all wrong
In an attempt to wring one last breath out of a very tired cliche, I would like to suggest that you think about building your house on a solid foundation.
I know, I know. You’ve heard it before: at church, from a relative, maybe even at school or at work.
The truth is truth and there is no way to deny the power of a solid foundation for your financial future.
I work with a diverse clientele with people in many different stages of building their own personal economies.
Although I am dealing with my richest and most money-wise clients, I always have them to begin with a stable, secure cash flow management mechanism.
For me, the use of specially designed, “turbocharged” life insurance policies is the ultimate way to achieve steady growth while staving off the erosive forces that are destroying wealth.
Having such funds to secure cash in place ensures that if a client decides that they will benefit from real investment opportunities, they can do so with greater peace of mind.
I am often asked why, if my method is so effective and so much safer than exposing one’s nest eggs to banks and Wall Street, that more people do not take advantage of it.
The biggest barrier, I think, is the lack of economic education in our country. Most Americans are not told the truth about money, especially when they are small.
We are not aware that money is organic, that it is susceptible to erosion from forces over which we exercise little to no control.
They do not call it a “nest cliff”, but rather a “nest egg”.
Imagine you had a big box of rocks. You take these rocks to a secret place, bury them and then return years later to collect them.
What would you find when you opened that box? Stone – still in the same condition as when you left them.
If, on the other hand, you buried a box of eggs and then ten years later you went to retrieve them, what would you like?
Organic reeking boulders that look almost like the original eggs!
The reason for this transformation is, of course, that outside forces, such as heat, rain, and the chemical composition of the eggs themselves, have combined to transform them into something else; something that we can never use.
After all, there is a reason why eggs have expiration dates stamped on the carton.
Money also has its’ version of an expiration date.
While you don’t actually see them printed in currency or advertised in the news, the idea of money expiring becomes visible when we don’t make good money choices; when opportunities are lost or the high cost of financial ignorance, what I call “the dumb tax” has to be paid.
Money only stays fresh for so long. You have a limited window of opportunity after earning sound strategies in place to help it grow safely without exposure to risk, unnecessary taxes and other erosive elements.
Therefore, getting a good financial education is one of the best things you can do to protect your future.
In the United States (and probably elsewhere, too), people are certainly not given as much direction as to what to do with money – how to grow in a safe, stable and healthy way.
The results of this lack of education appear later in life when we make our own money and make our own financial decisions. This is the time when we exchange for what I call “whizzdumb” – information that our friends, family and the financial entertainment industry erodes, which is not very clever at all.
We also watch TV shows and read books that tell us things like “no pain – no gains.” “You have to put all your money on Wall Street to get ahead.” We learn that permanent life insurance is bad and that we should always “buy term and invest the difference.” Slick marketing campaigns have convinced many that they should always take the risk of gaining profits, and approach our friends bankers when we need a loan or a safe place to put our cash on.
There are dozens and dozens of money myths that I could debunk. However, due to space constraints, I want to focus on just a few of the most enduring and pernicious of these myths.
1. All you need to retire is to fully fund your 401K
As the current economic crisis hit, millions of ordinary Americans saw their “safe and secure” 401 K accounts lose hundreds, sometimes thousands of dollars.
Unfortunately, many of these people were at or near retirement and had little time to recover the lost money.
The same people also discovered another dirty secret:
Many 401 K plans include hidden but very expensive fees that some financial advisors do not take into account when designing plans for their clients.
If you are one of those rare people who actually read your monthly statement, the fees may not seem significant to cause concern.
Dog just 1% too high fees can hurt you … big time!
To further compound the problem, there are many plans where the fee is charged based on a percentage of your balance. This means that becoming a diligent saver actually VALUES you.
What if there was something you could do to help you avoid paying unnecessary fees and help you get back some of the thousands of dollars you have given away simply because you do not know the alternatives?
Would knowing this information help you achieve your goal of having a secure, prosperous pension?
I think it would …
That is why I sponsor webinars and workshops to educate ordinary people on how to become their own sources of funding for major procurement, business expansion, university education, etc.
Using a simple yet effective system, you can accumulate wealth faster and more safely than you ever thought possible, and accelerate the process of getting out of debt.
Bad advice and myths share something in common: when one of them is repeated often enough and by the right people, they become so ingrained in a culture that anyone who challenges them is seen as a virtual heretic.
In a world of personal finance, as in other areas of life, myths can do a lot of damage, causing people to make decisions that the right information would never normally choose to take.
Another of the most common and, in my opinion, worse financial advice, I have heard over the years is the venerable and often repeated mantra:
2. “Buy term life insurance and invest the difference”
You’ve heard it on TV from the talking head financial gurus.
Or maybe it was your mother or father who looked strong and waved a finger in your direction as they repeated it to you.
Your significant other swears that “Warren Buffett does it this way.”
Your hair stylist, car mechanic, the guy at the grocery store are all true believers in the idea that buying term and investing on Wall Street is the way to achieve financial security.
“Buy term insurance and invest the difference” sounds logical, doesn’t it?
But when you dig a little deeper, there are problems that “buying term and investing the difference” do not solve.
1. Most of the expression policies put forward by financial “experts” do not increase the death rate during the policy period. This means that there is no remedy for inflation. (and I think inflation will be much higher in the future!). Best selling author (Bank on yourself) Pamela Yellen made the math, and she figured it out: A $ 20,000,000 20-year policy, adjusted for 4% inflation, will have lost 56% of its’ value! Even policies that include a “rising benefit rider” may not be elevated at a rate that will overcome the erosive effects of inflation.
2. What if you lose your health during your insurance period? Some term policies are written, so if your health deteriorates during the policy period, your rate of renewal increases. If you do not renew and try to seek coverage elsewhere, you may find that you are uninsured- at all costs.
3. You can invest the difference easily enough, but you cannot “time market” or accurately predict how much money will be in your account when it is time to retire. No one may know the future, as according to best-selling author Barry Dyke (Pirates of Manhattan) is one of the reasons why investing in Wall Street is so risky and usually ends up losing your money. With the types of accounts I design for my clients, they always know exactly how much they have at any given time, which is absolutely crucial to accurately planning one’s financial future. My clients don’t have to worry about timing the ups and downs of the stock market and they have access to their money, when they need it.
4. Lawyers for “Buy term and invest the difference” usually don’t know anything about the specially designed life policies I use to structure my financial plans. The reason for this is that these policies are written only by a few select companies and have special provisions that are unlike those that are traditional throughout life. insurances. Any counselor who assists his or her clients with this type of specialized policy must have a thorough education and must also be willing to forgo the usual high life-time commissions to make the plan work for their clients. THEREFORE. Policies used to create your own personal bank are far beyond ordinary life-long policies in both complexity and purpose.
5. Most financial gurus fail to include the huge amount of money saved on interest and fees that result from implementing this type of plan. By financing your big purchases yourself (eg: your car) you avoid having to pay thousands of dollars in interest and fees. (my clients LOVE this!)
Now just for the record …
I believe everyone who can afford to do so should have as much life insurance as possible.
Term IS is a great way to get more coverage for less money, and if you can get term, you should have it.
However, the primary reason for getting one of the specially designed life-long policies has little to do with the death benefit.
Instead, the idea behind these policies is to provide you with a savings and cash management tool that gives you growth, stability and security in sharp contrast to the ups and downs of the stock market.
You will also be able to pay yourself the interest you used to pay when you borrowed from banks or loan companies, allowing you to grow your account much faster than usual all your life …
The permanent insurance you also get is just icing on the cake …
You can find out more about how to avoid paying too much money to banks and finance companies.
There are many more financial myths that threaten your savings. Do your own research and take action. You can start by getting my free report and other valuable financial planning information now. Just visit our site and fill out the form to request your financial education material.