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Missed Fortune – Increased Government Spending Equals Higher Taxes

Posted on | September 6, 2009

Most Americans believe that if GM can’t be profitable it should simply disappear.

If there is any single event that will hurt the current presidency it is the involvement of bailing out General Motors, a monstrous unprofitable organization that has been failing since the 1970s.

Survey after survey over the last six months shows that 70% of Americans are opposed to any government assistance to this corporation.

Over the past century Americans have seen hundreds of corporations that were listed on the Fortune 500 disappear.  The birth, growth, decline and death of large corporations is a natural fact of life.

Here are a few segments of Doug’s interview with guest Aaron Andrew:

What is the fundamental difference between what a traditional financial planner tells people to do and what you prescribe for your clients?

Most financial advisors tell people to put money in 401(k)s and IRAs.   Because we are an instant gratification society, we want the tax break today even though this only makes our tax situation worse during retirement.

Putting off taxes while this money continues to grow and compound only makes the tax problem greater down the road.  As the government continues to increase taxes to pay for increased government spending, money inside 401(k)s and IRAs will most likely have higher taxes when it is withdrawn.

What we do is help people have a tax-free retirement income so that half their money is not going to Uncle Sam.

Why have most traditional investments in IRAs and 401(k)s not been successful during the last decade?

With the huge downturn in the market from 2000 to 2002 people lost a ton of money.  Let’s work with an example of say $100,000.  When people have a 50% drop they only have $50,000 remaining.  They have to have a 100% return to get back to their original investment.

It’s going to take a long time to make that money back and with the recent downturn again in 08, investors have lost a lot of money again.

Why didn’t your clients suffer any loses this last year?

The financial products that we use provide safety so that when the market tanks our clients don’t lose a dime.  They have a floor and little risk because their money isn’t in the market.

This year with market picking back up they are on track for a 16% rate of return.  This is all part of a lock-in and reset strategy.

Attend our one hour event live with Guest Aaron Andrew over the internet this coming Tuesday, September 8th at 11:00 am and again at 6:30 pm Pacific: Don’t miss your chance to understand how to protect your money during this economic crisis and get competitive rates of return during the good years. This strategy is called indexing and you need to know all about it. Call 888-76-Radio (888-767-2346) to register.

 

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

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One Response to “Missed Fortune – Increased Government Spending Equals Higher Taxes”

  1. Lance Miller
    September 7th, 2009 @ 1:49 pm

    Doug,
    The teachings in your books are INCREDIBLY important regardless of one’s political outlook … and I THANK YOU DEEPLY for them. I wish I had known of you and your ideas YEARS ago! (I wouldn’t have made some of the mistakes that I am STILL trying to recover from financially!)

    But I feel that, despite your CLEAR understanding of the points you make in your books (AND in ’4 Quadrants’) I am disappointed to hear your constant criticism of ‘workers’, “unions”, ‘Obama’, and in today’s theme, your criticism of ‘Cash for Clunkers’ and the rescue of GM.

    You don’t seem to understand some “basic” “facts” of economic theory. For example, in a collapsed economy, how would you suggest that Obama restart a ‘stopped’ economy?

    Would you simply wait the years or DECADES for the “free market” to somehow absorb the losses, stabilize and re-start manufacturing?

    What happens to the millions of people affected by such a collapse in the meantime? Would you say “too bad for them!”? ((“I’ve got mine!”))

    (And, how would such a collapse impact the world? “Who cares?”)

    What I haven’t heard you mention in any way (perhaps I’ve missed those talks) is any explanation for how the economy got to the point where GM needed to be ‘rescued’ in the first place. (Despite GM’s self created decline … as you DID mention. Which I totally agree with.)

    What you haven’t mentioned (that I’ve heard) is anything in regard to the criminal and outrageous activities of the banks, AIG, and “Wall Street” that CAUSED the final collapse of our economy last year.

    Since you are always criticizing President Obama for trying to SOMEHOW rescue America’s consequent slide into an even worse Depression than that in the 1930s, I would love to hear your analysis and recognition that EVERYTHING that destroyed our economy happened under either Republican control of Congress, the Presidency …. or both.

    I would love to hear your thoughts on (former Goldman Sachs Chairman & GW Bush’s U.S. Treasury Secretary) Hank Paulson’s personal destruction of Goldman Sach’s #1 rival, Lehman Brothers, while providing HUNDREDS OF BILLIONS of Tax Payer dollars … with virtually NO STRINGS ATTACHED to the “Too Big to Fail” Banks and Wall Street …. AND all without virtually ANY oversight.

    Yet, you scream about helping GM and its thousands of workers (and their families) and the workers and families of their suppliers, and their suppliers, etc, etc, who are all making pennies by comparison. Pennies that all have HUGE oversight (and Republican screaming) with obligations to be repaid … while our auto industry (what’s left of it) is the LAST industrial, manufacturing sector in the U.S. economy …. except airplanes and war-making manufacturing. (If it disappears, then what?)

    Everything else has been off-shored, with millions of Americans left unemployed. ALL by YOUR Republican party (and mine, formerly).

    I would love to hear your thoughts on those topics ……. and, YOU ARE RIGHT, you are correct, TAXES WILL GO UP.

    But, not because we “bailed out GM” and it workers but because the FED has given or obligated TRILLIONS of TAX PAYER DOLLARS to the very people (banks, Walls Street, etc.) who caused the problems in the first place.

    GRATEFULLY & RESPECTFULLY Yours,

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