What’s Wrong With Financial Planning | Fire Your Financial Adviser

Posts Tagged ‘what’s wrong with financial planning’

Should I Move My Money Out of the Stock Market? Where?

Wednesday, August 10th, 2011

With the Dow losing 15% over the last 3 weeks, many are wondering what to do next. Should we wait it out, or should we get out? When’s enough enough? What if it comes back?

Are you frustrated with how your money has grown (or not grown) over the last 10 years?

If you see virtually every article on this topic, they will tell you to calm down and ride the wave. Besides, you don’t want to get off the roller coaster when it gets exciting, would you? These article contributors will make it sound like you are on anti-depressants and can’t think for yourself because you’re too stupid to keep your emotions in check.

In reality, I think you’re smarter than they say you are. Using fear is a great way to keep their advertisers (investment firms and banks) happy. Despite this, you don’t want to make a mistake either. After all, you don’t want to get out when everyone says to stay in, do you? Shouldn’t we follow the herd and play it safe?

My own personal motto with any kind of investment or business deal is “When in doubt, stay out.”

However, I legally can’t tell you to buy or sell. Besides, it would be bad to tell you what to do without knowing who you are. But, I would have you consider a few things to help you make up your own mind.

Are you avoiding looking at what’s happening so you don’t stress out?
Do you have doubts about the future of the economy and government decisions?
Are you really passionate about the stock market, or do you just want to invest where you can create freedom and security?
Do you know what you’re doing in the market?
Does your financial advisor have any control of the markets, or are they just telling you to “trust them?“
What would you do if the market kept going down?
Why do Chris Miles and Dale Clarke laugh when the market tanks? =)

If you could answer these confidently (except for question #7), then you may be fine keeping your money there. If you had doubts about your investments, you may want to consider talking with a professional (hopefully someone who’s not paid to sell you products) to know what would be best for you. Ignoring what’s happening to your money is as bad as ignoring your spouse. Like in relationships, if you ignore them too long, you lose them. Don’t ignore and lose your money either!

If you want to learn ways to not only make money, but keep it, then I would recommend educating yourself further about the NEW RULES OF MONEY. If you like the gamble, that’s fine too. Go ahead and follow the herd, and let us know how it goes.

The good news is that Dale and I sleep well no matter what the news is saying. How have you been sleeping lately?

Tags: 401k is losing, Financial Education, Financial Freedom, financial myths, Get out of the stock market, investing in mutual funds, investing in the stock market, investment options, Retirement, what is the best investment now, what's next?, what's wrong with financial planning, why not to use a 401k
Posted in 401k/IRA, Investing | No Comments »

Self-Made Millionaires…Really?

Monday, May 23rd, 2011

As a child did you ever dream about becoming a Millionaire? Driving a fancy sports car? Living in a castle in Germany? Wealth beyond imagination? Perhaps you day-dreamed about where you would travel or what you would do with your life if money were of no concern.

Being a “self-made” millionaire is something that is at the heart of many in search of the American Dream. The idea of creating an innovative product or service, starting a business, and marketing that product and/or service to the world is what drives most entrepreneurial minds. The truth of the matter is that there are no self-made millionaires. In fact, every time I hear someone say it, I cringe. It’s simply not true!!! We live in an interdependent world where everyone must work with others to succeed. Our relationship capital and ability to exchange value with others is what accelerates more wealth. Did Warren Buffett, Bill Gates, or Carlos Slim do it alone? Of course not!!!

For instance, I used to be the “jack of all trades” financial advisor. You could come to me for mutual funds, life insurance, health insurance, mortgages, and even help with your debt! Heck, I would even offer to babysit if you would do business with me ;) But seriously, despite all of these services, I struggled to make a decent living. Ironically, I made a lot more money when I began using my financial knowledge and ability to teach the “why” and the “how”, and then delegate a lot of the implementation of those services to others. I found out that I was better off making 50% of something than 100% of nothing. I was happy, the clients were happy, and my team was happy. How cool is that?! I figured out the fastest way to make money is to look for the “win-win-win.”

In the real business world, the more we focus on our using our strengths, and allow others to use their strengths, towards a common objective, the wealthier we ALL become.

What do you offer and who can help you deliver it so you can become more financially wealthy?

Tags: Become Wealthy, Bill Gates, business tips, Carlos Slim, Chris Miles and Dale Clarke, Financial Education, Financial Freedom, financial independence, financial interdependence, financial myths, how to be a millionaire, Money, self-made millionaire, Soul Purpose, Universal Laws of Wealth, value creation, Warren Buffett, what's wrong with financial planning
Posted in Business, Financial Freedom, Soul Purpose, Universal Laws of Wealth | No Comments »

How Can I Be Financially Independent Faster?

Tuesday, September 14th, 2010

This last week, I had a coaching member ask me how we apply our model to know how much they will have in retirement. Although I hadn’t heard this question for awhile, several others had the same question this week.

They would all ask, “Chris, we know that what you teach works better, but (notice it followed by a “but”) we aren’t sure what it will eventually equate to be. What do you think?”

My honest reply was, “I really don’t know. My crystal ball is broken. I could tell you what it could likely be, but I might be limiting your expectations or you may not be alive to see the bigger results. This is why we focus on generating more cash flow TODAY rather than 15-30 years from now.” Let me explain more what I mean.

Traditional Planning Model

This brings back painful memories, but it is useful to understand =) If I were a traditional planner again, and you sat down with me, I would pull out my fancy little financial calculator to “predict” your life.

Let’s say you are 50 years old, have $80,000 to work with for your retirement, and you are currently putting away $600/month. I would “assume” that you would earn 8% average in a mutual fund. I remind you that past returns does not guarantee future results. (See our video on how traditional planning can manipulate figures.)

If you were to retire in 15 years and everything worked out perfectly, you would have $457,640. To some, this would sound like a good deal of money. However, traditional planning will tell you to live off the interest (Listen to our podcast as to why they say this).

Therefore, to be “conservative” in our figures, I would suggest that you “plan” on living off of 5% of the balance each year. In this example, this would be $22,882/yr.

How many of you could live off of that? You could live off of more, but now you risk running out of money before you pass away.

But wait! A really good planner will account for inflation at 4%. Naturally, in 15 years, it is very likely that you will have to have more to live on. Your purchasing power is now only worth $254,111! That would be like living on $12,700/yr. today!

Note: the REAL inflation rate is much more. Listen how!

This was the dilema I was caught in that caused me to question if this really worked. To have at least a $50,000/yr lifestyle, you would have to put away at least $5000/month in this example! Pocket change, right? Sense the sarcasm? You could work an extra 10 years to age 75, and then “only” have to put away $2500/month…as long as inflation stays down and you actually get 8% average (which many haven’t).

Recommendations from a truthful financial plan? Live on less income, get a 2nd job, and put away more!

Our Model

Our answer? Live your appropriate lifestyle and create more cash flow TODAY thru better use of your money! Although it’s not mainstream, it’s simpler and more attainable.

For example, last week I showed one of my coaching members how to free up at least another $15,000 or more this year by using their money more effectively without having to spend more money! On top of that, as we show people how to leverage their human capital by coordinating it with their money, they realize that having a $50,000/yr. lifestyle is not as hard as they thought. This is the same thing I did to do it with virtually no financial capital and only investing a few hours of each week.

It doesn’t take a lot of money to make money, only simple creativity!!!

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Tags: Become Wealthy, Cash Flow, Financial Education, Financial Freedom, financial planning doesn't work, how to retire faster, Money, Retirement, what is the best investment now, what's wrong with financial planning, why don't financial plans work
Posted in Cash Flow, Financial Freedom, Investing | No Comments »

Which Financial Advisers Should You Hire?

Thursday, August 12th, 2010

Have you ever been caught in a dilemma? Have you ever been at a crossroads where you knew in your heart what was right, but afraid to take the leap of faith?

In March 2006, I was stuck between a rock and a hard place. A few months prior, my friend, Doug, and I had an argument about whether someone should invest in real estate or stocks. I was convinced that the stock market was best, even though I was beginning to have doubts. Doug finally asked me, “How many of your clients are financially independent and worry-free?” followed by, “How many of you (financial advisers) are financially independent from investments (not from commissions)?” Answering honestly, I said, “None.”

That was the beginning of a conversation that eventually got me to attend a seminar put on by Garrett Gunderson, NY Times Best-selling author of “Killing Sacred Cows” and his late partners. They asked the audience, “How many financial advisers are in the room tonight?” Since I believe I was the only one who was, I timidly rose my hand no higher than my shoulder and quickly dropped it (That was the first sign to me that I wasn’t so sure I wanted to be a financial advisor anymore). At that moment, they read an article written by a highly acclaimed financial planner, and then brought up every flaw in this planner’s “wise” counsel (some of which I will address below).

At the end of his seminar, I thought to myself, “Who would be crazy enough to teach this junk?” Suddenly, it hit me. I was teaching this junk!!! I then realized that I could no longer claim ignorance while keeping my integrity in tact. Although my business was really beginning to take off for the first time in 4 years of financial advising, I submitted my resignation that week.

Key Point - Quick action is more likely to get you quick results. I can attest to the fact that turning my back on the traditional financial industry has been a tremendous blessing in my life, my family’s lives, and my coaching members’ lives. To learn what else I discovered, listen to the podcast we posted previously, and/or see a condensed list down below.

How to Hire the RIGHT Financial Adviser

Ask yourself the following questions to see if you have the best financial adviser for you, or a salesman in a suit.

1. Do they earn commissions from your business? Have you ever noticed that the best investment many advisers recommend are often what they sell? Even the best intentioned advisers are tempted to advise you to buy only what they sell.

- Hire someone who is fee based, not commission-based.

2. Do they keep quoting figures 20, 30, or 40 years down the road? Will you even be alive then? These advisers will not teach you how to create cash in your life today, but instead, quote speculative numbers in the future. Nearly all financial advisers tell you to invest for the “long haul”…however long that is.

- Hire someone who teaches you how to create more cash flow today

3. Are they asking you to invest in their products, or in investments that are right for you? I was stumped when my brother-in-law said that he would rather invest into his own business and earn greater returns than 12% in the market (if you’re lucky). Almost every adviser or planner is guilty of this.

- Hire someone who is willing to tell you to invest where it is best for you, but possibly not them.

4. Do they tell you to take high risks if you want high returns? This is another lie! How can a higher chance of loss give you a better chance of winning? If this were true with money, you should ignore all financial products and only invest in lottery tickets since those have the highest risk of loss (FYI - I obviously don’t recommend this course of action).

- ONLY hire someone who counsels you to take lower, calculated risk.

5. Do they tell you to invest in the market whether it goes up or down? If they are so good at what they do, wouldn’t they only tell you to buy low and sell high? Have you ever noticed that it is always the right time to put your money with them, regardless of what’s happening in the market?

- Hire those that keep you away from speculative investments.

If your financial adviser works by any of these 5 myths, or others, then today is the perfect day to Fire Your Financial Adviser!!!

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Tags: Cash Flow, Financial Education, Financial Freedom, how to fire your financial adviser, Investments, Money, Retirement, what questions to ask when interviewing financial advisors, what's wrong with financial planning
Posted in Cash Flow, Financial Freedom, Investing | No Comments »

Are You Frustrated With Your Investments?

Saturday, August 7th, 2010

How many of you are frustrated with losing money in your investments and not sure where to turn?

Are you confused because you don’t know who to trust because your financial adviser makes money even when you don’t?

Are you unsure where you should be invested? If so, you’re right to feel that way!

So many times I hear people express their frustration telling me “I’m frustrated because I’m losing money in my investments and I don’t know what to do or who to trust!” To that, my response is “Good! You should be!” It’s better to have that happen now than to have it happen to you when it’s too late.

For example, if your child were to go to a casino to gamble, would you prefer them to win their first time where they feel they have that “lucky touch,” or would you rather have them lose the first time to understand the consequences of gambling their money away? Personally, I would hope my kids wouldn’t gamble in the first place, but if they did, I would want them to fall flat on their face.

With investing, people think they’re financial adviser, or themselves, are brilliant when they make money, but then when it goes down, they want to blame the adviser or someone else. Here’s the reality: You can’t gamble your way to wealth, and your financial advisers are just nicely-dressed gamblers! They can’t perfectly predict the stock market any more than you can know exactly what will happen to you next week. The only thing guaranteed is the fact that your adviser will get paid for managing your money, regardless of the results.

The Solution: Stop trusting financial advisers that get paid to gamble it for you, and learn to control your own finances. There is a previous podcast about the best investment in today’s economy that can offer a deeper perspective on what might be right for you. The good news is that we are not going to sell you any investment. Education will make you a lot more money than ignorance.

Fire your financial adviser if they are telling you to be in it for the long haul, they tell you to buy when the market is high or low, and only invest in what they sell. Why have them gamble with your money, retirement plans, potential lifestyle, and financial freedom? Hire those that practice what they preach and believe that you shouldn’t take high risks to get high returns.

What are some of your frustrations with the financial planning advice you have received?

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Tags: bad financial advice, bad financial advisers, Become Wealthy, financial adviser, Financial Education, Financial Freedom, Investments, Money, Retirement, what is the best investment now, what's wrong with financial planning
Posted in 401k/IRA, Financial Freedom, Investing | 1 Comment »

How Are Financial Advisers Losing YOUR Money?

Wednesday, July 7th, 2010

How do you know whether you should fire your financial adviser before it’s too late? How do you know if you have the right one working for you? How are the wrong ones costing you money and you don’t even know about it? What are some simple questions to ask when interviewing for the right financial advisor or planner?

Chris Miles and Dale Clarke expose how financial advisers are costing you your retirement and your ability to have the life you dream of today. Learn a few fast questions to easily know if you have the right adviser or the expensive adviser, and which ones can help you create wealth today, rather than wishing for retirement someday.

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Tags: 401k, bad financial planning, Become Wealthy, best financial planners, best strategies to eliminating credit debt, Cash Flow, Chris Miles and Dale Clarke, Debt, financial adviser, Financial Education, Financial Freedom, financial planners, investment options, Investments, Loans, Money, Podcast, protection, Real estate, Retirement, Soul Purpose, Universal Laws of Wealth, what's wrong with financial planning
Posted in 401k/IRA, Cash Flow, Financial Freedom, Investing, Podcast, Real Estate Investing | No Comments »

Why Doesn’t Retirement Planning Work?

Monday, July 6th, 2009

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
Posted in 401k/IRA, Business, Cash Flow, Debt, Financial Freedom, Insurance, Investing, Soul Purpose, Taxes, Universal Laws of Wealth | 4 Comments »

So You THINK You’re Going to Retire?

Tuesday, June 23rd, 2009

You’ve been “had” by what sounds ideal! Listen why!

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Tags: Cash Flow, Chris Miles and Dale Clarke, Debt, Financial Education, Financial Freedom, investing myths, Investments, Money, Podcast, Retirement, Soul Purpose, what's wrong with financial planning
Posted in 401k/IRA, Cash Flow, Debt, Financial Freedom, Investing, Podcast | 1 Comment »

Why Is Dave Ramsey Not Helping You Become Financially Free?

Tuesday, December 2nd, 2008

Why are so many people NOT financially free?

Is it only because of debt?

Does it only apply to those living beyond their means?

Are there others who have, by most people’s standards, a good amount of money that are still in financial bondage?

Is being out of the financial “rat race” REALLY financial freedom like many are claiming? (Click Here for more on this topic)

Can any amount of money make anyone TRULY free?

Financial freedom is a state of being, NOT a state of your wallet or purse! It’s a choice, not a circumstance! Do you know someone (like your grandparents, parents, friends, etc) that had/has plenty of money and no “debt,” but never wants to spend it and complains about having no money? I have met many of these people who worry more about money than many who survive month to month. I know people who would be Dave Ramsey’s poster children, but have a hard time driving 20 miles because gas prices are more than $1 per gallon!!!

Financial pundits, like Dave Ramsey, have added value to those that are uncontrollable spenders. What about those of us who are not? Can paying off a mortgage and calling into his radio show screaming “We are debt free!” while Dave plays Mel Gibson’s voice screaming “Freeeeeedommmm!” really make me free??? Please! If that’s the case, I’ll sell off my home, rent, pay off my credit cards and auto loan, and then play my Braveheart soundtrack so I can feel warm and fuzzy inside!

The only “tyrant” that threatens our freedom is our own mind, not debt or the seeming lack of money. It’s relative to our perspective. Although financial conditions can affect us, we still choose how we act in that moment. Wise stewardship of our resources will help create conditions towards financial freedom, but ultimately, our perspective determines whether we are broke or free.

To hear more, listen to our podcast on this subject. To hear strategies to pay off debt safer, and potentially faster, than Dave Ramsey recommends, listen to Pay Off Debt Better Than Dave Ramsey.