KEEPING IN TOUCH Newsletter
The number one fear of baby boomers is outliving their savings. Seventy- five percent of Americans can expect their assets to disappear before they die. Forty percent of Americans haven’t even calculated how much money they will need to retire. These facts are disheartening. That is one of the reasons I share a cash-flow analysis with many potential clients so that they can understand how they can quickly turn their finances around and succeed where they never dreamed success was possible.
A guaranteed income stream- a paycheck for life- is the bedrock for success. This is the reason I always try to ask people what kind of an income they would like to have when they have succeeded through hard work to accomplish the goals they set for themselves. With a bedrock income, hopefully tax-free, a person is then free to spend additional funds on the fun things they enjoy.
WHO IS SAFE?
More and more, municipal, state, or federal employees with government pensions have to wonder if the money will be there when it is time to collect. Cities like Detroit and others are declaring bankruptcy or coming very close. How is it that they will be able to make good on the exorbitant promises they have been making for years, knowing all along that it was impossible to keep those promises? To me this means that whether you work for a private business, own a private business, or work for some government related entity, it is impossible to depend on future incomes unless you personally control your own finances.
Taxes are a huge factor to consider in financial planning. Something like 55.5% of the average income of Americans is spent in taxes. This is not simply income tax and social security tax, but it is also various taxes at the federal, state, and local levels. Someday you may want to sit down and take a look at all the taxes you pay for in virtually everything you do. The tax man, in some form or another, is your greatest enemy and this fact needs to be taken into consideration if you wish to succeed financially.
The average American family spends $1,000.00 per year on lotteries. Learning this statistic saddened me greatly. Most of those individuals or families who play the lottery have an income which is very low. In my view, they have given up hope of financial success because they don’t have the knowledge, discipline, or help they need to accomplish the goals they would like to accomplish. As a result, they gamble their money with astronomical odds against winning. The money they could have used as seed money to accomplish great things is thrown into the wind.
BEWARE OF PROPAGANDA
We are drowning in information and conjecture, but starving for wisdom. A great amount of the information we hear over and over again, day after day, is purely propaganda designed to entice us to buy things we don’t need or to gamble our money where we are told we are investing. God himself said, “In the end days, information will grow exponentially but wisdom will fail”. Each one of us has expertise in one area or another. By working together, we can help each other in our own areas of expertise, so that both parties gain.
KEYS TO SUCCESS
You can become financially independent in your life without ever having to make a fortune in annual income by employing compound interest. There are few things that can compare to the power of compounding. This is a quote from the great philosopher in our current century. His name is Bill Bonner. Here are his three rules for financial success.
1) Spend less money than you make.
2) Save the difference.
3) Don’t do anything stupid.
If everyone would follow these simple rules, the majority of Americans would succeed instead of the abysmal fact that 90% of Americans fail to meet the goals they would love to accomplish in their lifetimes.