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Missed Fortune – Why Sometimes Traditional Just Won’t Cut It

Posted on | March 3, 2014

Some Investments Are Risky By Nature

Confusion is very common among a lot of us today. Many people are feeling isolated and concerned about what the future holds.

This is especially true with the Baby Boomer generation that has seen its financial well-being shaken twice in the past decade with market volatility. Even younger generations are feeling the challenge after struggling to find a good job after going to college.

Feeling powerless is no way to go through life.

If you’re one of those people who feels uneasy, even though you’re somewhat disciplined and are doing what you can to prepare for your future, you still have choices. Choosing the right investments is more important than many people realize.

Investments are really just financial instruments. To understand the word investment we must first understand how it has evolved.

This evolution is due primarily to regulations from the Financial Industry Regulatory Agency that cover what can and cannot be said about “investments.”

The things that FINRA generally categorizes as investments include stocks, bonds, or securities. In other words, you put your money into those investments and it is inherently subject to certain risks.

These risks include taxes, inflation, and market volatility.

Because of the narrow definition that is applied by FINRA, many people forget that there are other ways to invest besides those that are subject to risks.

For instance, we invest in our children’s education. When we put up a year’s supply of food, fuel, and other preparedness necessities, they can also be considered investments.

So, what would you call something that you can put money into and it can be used for income that is not tax-deferred but tax-free? In fact, what if that income could be used to see you safely through your golden years?

Ideally, this instrument would have liquidity meaning you could access your money with a simple phone call or an electronic funds transfer. It should have tremendous safety so that any year the markets go down, you don’t lose money. Likewise, in those years when you make money, this instrument should lock in those gains so they become new principal.

Finally, this instrument should have stable rates of return that is not only realistic at an average of 7, 8, or 9%, but is also tax-free. And when you go to take out this money, it also remains tax-free.

Remember, this is not a retirement plan as defined by the industry. To them, a retirement plan is something you do under the Internal Revenue Code section 401(k) or as an IRA.

But what we need isn’t a traditional retirement plan or investment as defined by financial industry regulators. We want something that doesn’t have all those risks.

You Deserve Something Better

If you were going to play in a professional golf tournament, would you rather have Phil Mickelson’s golf clubs or his golf swing? The smart answer is: Phil’s swing. The clubs are merely tools, but the know-how and technique is what it takes to win.

In this same sense, too many financial advisors focus primarily on the commodities—or clubs—when they should be focusing on the swing of optimizing assets and protecting their clients.

This is especially important regarding the “back nine” of life that we all hope to be playing in our golden years.

Traditional life planning involves the Learning years for the first 20 years of our lives. Then comes the Earning years where we spend about 40 years working and producing until reaching about age 65. Finally, we have the Yearning years that last for roughly another 20 years until we are either dead or dead broke.

Again, we want something far better than that.

We want a lifetime of learning. We want a lifetime multiplier of abundance so when we reach our golden years, we are enjoying a predictable, tax-free income that never depletes the principal we’ve saved.

This is what enables us to leave a legacy to our children and their children. It’s what gives us incentive to live to 100 years old because we have something to look forward to because we know we won’t outlive our money.

Learn how to make this your reality by visiting with a wealth architect today.

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

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