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Missed Fortune – Skip These Mistakes & Own Your Financial Future

Posted on | November 6, 2011

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Welcoming the Prospect of a New Painful Era of Self Reliance

ABC News recently reported on president Obama speaking at a San Francisco fundraiser warning that America was poised to enter a “new painful era of self-reliance in America.”

Do you know what they call people who rely upon themselves?  Adults.

Taking ownership of one’s future is not only possible; it’s essential if we wish to be free to prosper.  Aren’t we supposed to be self-reliant?

It’s not reasonable to expect government to pay off our mortgages, to pay for our healthcare or to pay for our kids’ college education.

If just 20% of the $3.6 billion in stimulus spending were instead given to employers to expand their workforces, it could have created a $50,000/year position for two years for every unemployed person in this country.  Instead unemployment went from 7.2% to 9.2%.

We need to get out of the mindset that big government should be taking care of us.  We need to take ownership in our future.   Ownership makes great things happen.

When’s the last time you washed a rental car or changed the oil in one?   If you own your residence, it’s almost certain that you’ll take better care of it than if you were just renting it.

Taking ownership and being self-reliant is the American way.  This is especially true regarding our financial future.  When we have incentive to take ownership of our own future, we can redirect otherwise payable taxes to causes you support.

These aren’t tax loopholes, they’re decades-old, grandfathered sections of the IRS code that even tax attorneys and CPAs are rarely taught in their training.  These include section 163 of the Internal Revenue Code, which provides tax incentives regarding home ownership.

You need to take ownership in providing for your own retirement instead of counting on the government to provide it for you.  After all, the government is still on the hook for $115 trillion in unfunded liabilities including Social Security and Medicare.  They’ll gladly try to take care of your retirement, but you can do better.

If you take ownership of your own health or even caring for the poor, you get incentives in the form of tax deductions.  All of this is possible if you understand legally how to redirect otherwise payable taxes to the causes you support.

So why don’t more people do it?

The problem is that we simply don’t know what we don’t know and powerful opportunities are missed as we follow the herd.

Seven Ways Most Financial Advisors Fail to Protect Their Clients’ Money

Here are seven things that more than 90% of financial advisors don’t know how to do to protect their clients’ money.

  1. Give you guarantees with an upside potential.   Traditional financial planning in this country usually gives you guarantees but usually without upside potential if the economy does well.  Or they may give you upside potential without any guarantees if the economy loses.  This is one of the reasons so many people lost a third or more of their IRAs or 401(k)s during the last decade. Missed Fortune Indexing strategies enable you to earn a predictable, conservative rate of return even if the economy loses.  At the same time you can enjoy upside potential up to a certain capped rate of return when the economy grows.  Few advisors know how this is done.
  2. Protect you from loss of principal.  The key here is not only to protect your principal you invested, but also in any year that you make money, to turn that money into new protected principal that’s not subject to loss.
  3. Protect you from the effects of inflation.  We’ve been fortunate for the past two decades to have inflation remain steady around 2-3%.  But those days are gone and inflation is likely to rise due to the incredible amount of money that’s been and is being printed.  This means that your rate of return must be able to outpace the rate of inflation, and most investment advisors don’t know how to do that.
  4. Protect you from the danger of rising taxes.  Most advisors simply hope that when the future arrives, you’ll find yourself in a lower tax bracket when you retire.  But that often doesn’t happen for various reasons.  Your dependents have moved out.  Your home is paid off.  You’re not only missing out on these deductions, but Congress is looking to raise taxes too.
  5. They don’t know how to get tax-free returns rather than just tax-deferred returns.  Most people are in a for a rude awakening when they see just how quickly taxes will eat up their nest egg as they’re taxed before contributing to their IRA or 401(k).  They’re then taxed upon withdrawing their funds and taxed again when they try to transfer what’s left to their heirs.  A better way is through investment vehicles that have been grandfathered for more than 4 decades and have been around a lot longer than IRAs or 401(k)s.   They’re safer than municipal bonds and pay a higher rate of return than municipal bonds, plus they accumulate money tax-free and the money transfers tax-free at your passing.
  6. Provide predictable rates of return.  The stock market has only averaged a 3.83% rate of return for the past two decades.  Trying to get an average return of 12% is just not realistic.  But if you choose, you can convert all of your income to generate predictable rates of return of about 8% tax-free.
  7. Help people get their money out of their IRAs or 401(k)s with the least amount of tax impact.  This is where a strategic roll-out can help protect you from some of the tax-deferred woes by getting your money out of those IRAs and 401(k)s and into a vehicle that will allow it to grow 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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