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Missed Fortune – What is an Indexing Strategy?

Posted on | August 9, 2009

Cash for Clunkers Program.

I’m all for better gas mileage and for more efficient cars, but  I really wonder what the ulterior motives for this program really are.

One motive is to look as if the government is green.  Another motive is to stimulate the automotive industry.

But some wonder why the government is investing billions into bailing out one industry and not others that are failing.  The privacy act and security statement on the http://www.cars.gov website has been modified since the airing of this show.

See the website at Truth or Fiction for more details on this story.

Why I don’t own an IRA or 401(k) and never will.

If you are like many Americans, you may have seen a loss of 30%, 40%, and 50%  in the value of your 401(k).  I predict the worst hit is yet to come and it isn’t what you think.  Recovering from losses can be tough.

Did you know if you lost 50%, you need to get a 100% return to get your money back?  That isn’t everything that we need to worry about either.  The biggest loss you’ll may ever incur is the day you start to pull out your money from these accounts.  Most likely, you’ll be in a higher tax bracket and future taxes will be higher than they are now.

I’ve always put my serious cash such as college savings, retirement, and home equity into investments that will accumulate money tax free. And then when I access that money it is tax free, including the gain. When I die it also blossoms and transfers income tax free. I make sure this money is liquid, safe, and earns a competitive rate of return.  I choose to put my cash into Maximum Funded Tax Advantaged (MFTA) Life Insurance.

What are the three simple tests for determining a wise and prudent investment? I call this the L.S.R.R. test. 1) Make sure you have liquidity. Can you get your money back when you need it back? 2) Is it safe or guaranteed? Is the principal safe so that no matter what happens in the economy you will not lose your principal? The people that followed the Missed Fortune strategies didn’t lose, even this last year. Did you know you can have your money liquid and safe at the same time? 3) They earn a nice rate of return that is tax free.

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

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