Many believe that if they do everything they are taught by the financial industry, they will be financially free. From what I’ve seen and what common sense tells us, it’s a load of *%&@! Here’s a few reasons why:
1. Traditional savers still feel broke after years of saving. I have yet to meet someone in retirement that KNOWS their money will last for the rest of their life. Listen why. Some can do it for a certain number of years before they can’t enjoy retirement anymore. The only people I know that have peace of mind are those that invested outside of 401k/IRA’s, OR the financial advisers getting paid commissions on their clients hoping for better returns.
2. Numbers aren’t reality and people aren’t numbers. Just because some suave salesman pulls out his fancy calculator and tells you it’s going to be alright, doesn’t mean it will be. Can he/she foresee your future? What if something changes in 20 years? 20 minutes?
By the way, Mr. Adviser, stop looking at my financial assets to produce returns for you and look at me as the REAL investment!
3. Average returns are not actual returns. If they tell you “Historically, this ‘investment’ has done ___%…” ask them if they will guarantee it in writing. THEY CAN’T!
Also, you can have a positive average rate of return, and in reality, still be losing money. Watch this video to learn how.
4. Inflation is much higher than what many believe. This is the most subtle way to tax the poor and middle class so the politicians look better. Listen here.
5. Your taxes will likely be higher. Even if taxes don’t increase (which I’m sure they will), you will likely have to pay more solely due to inflation. Things get more expensive over time meaning you need more money each year.
Besides, if your retirement accounts actually succeed like your adviser crosses his/her fingers for, wouldn’t you be in a higher tax bracket? If not, it’s probably because your accounts failed.
6. You cannot accumulate enough to only live off of the interest. Like I mentioned in one of my recent podcasts, it’s nearly impossible for even the best savers to live off of 4-5% of their money each year.
7. Paying off “debts” early will shrink your nest egg. Although I am in favor of paying off liabilities, there’s a catch. If pay off your liabilities, it will take money away from your retirement. Unfortunately, you cannot eat a paid-off home. Paying off “debts” is more in the self-interest of the banks than for you. Many retirees are currently asset rich/cash poor which restricts their freedom. For alternative strategies, listen now.
Stop “planning” for retirement!!! Instead, make it happen by DOING THE OPPOSITE which gives you a better chance. Learn the “art” of investing to start becoming financially free today!
If you need further convincing, check out these scary stats!
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Tags: 401k, Cash Flow, Debt, Financial Education, Financial Freedom, Inflation, Insurance, investing myths, Investments, IRA, Loans, Money, Mortgage, Retirement, Soul Purpose, Tax Savings, what's wrong with financial planning, why financial planning doesn't work