As a country, nation and even globally, we are in the middle of one of the biggest financial crisis since the great depression. The folks in Washington can’t seem to balance our budget. As each year passes, our national debt that is now in the trillions of dollars keeps increasing. Investors have suffered yet another major setback in their financial planning goals with the most recent stock market crash. Questions abound with seemingly little answers about how to solve the social security crisis. Unemployment is at near historic levels and the average worker has very little savings to speak of and is basically living paycheck to paycheck.
Nationally and internationally, we are suffering a really bad case of “financial insanity.” Insanity has been defined as doing the same thing over and over again while expecting different results. Financially speaking, people nationally and internationally have been doing the same thing over and over again expecting different results. All you have to do is look at the American consumer. Not once but twice within the past decade, they have seen their wealth ravaged by “systematic risk or market forces” as some would say. Just because a ship is sinking doesn’t mean you sit quietly and die with the rest of the passengers.
Between 2000 and 2002, trillions of dollars were lost in the financial markets. Again between late 2007 and 2009, trillions more of dollars were lost in the financial markets. Not only did investors see as much as 50% losses in their stock, mutual fund, IRA and 401K portfolios, but they also witnessed their homes lose their values by as much as 50%. And where has the general population been accumulating much of their wealth for decades now?
Thanks to “the go-go years” in the real estate market when homeowners only thought their homes could appreciate in value but never depreciate in value, they got very used to using their homes as an ATM bank. Every few years as the homes would appreciate in value, they would refinance the home, pull out that equity, and use it to finance their lifestyle consumption. Reality finally set in during the most recent housing crisis and the next time they went to the ATM bank, it said you have “insufficient funds” to make a withdrawal.
All the while that this was happening, those who were saving any money at all from their paychecks, had the vast amount, if not all of those savings, going into their 401K’s at work, self-employed retirement plans at their place of business or their IRA’s at their brokerage firm. When the most recent crash in the stock market happened, as much as 50% of those hard-worked-for savings disappeared in the air along with the trillions of dollars that disappeared in the stock market. It’s time for a wake-up call in America. It’s time for a wake-up call in Britain, Greece, Germany, Africa and all other nations of the world. What you’ve been doing financially isn’t working.
I suffered a financial meltdown myself just after the market crash of 2001. It resulted in my filing for bankruptcy in 2003. In just 5 short years after my bankruptcy filing, I went from being broke to being financially independent. I did it by realizing the insanity in some of my prior financial decisions and by making a vow to change what I was doing for the better. Today, I am financially independent and secure because of those changes and the fact that the vast majority of my wealth isn’t sitting in the two most risky and volatile financial vehicles – the stock market and my home.
We have so many financial ‘gurus’ in the media yet so many are financially poor. We have so much financial advice available online, at financial institutions, from your financial advisor, and in the media, yet there isn’t much fruit being seen from this advice. If all of the financial advice you’ve been receiving from the media darlings and the guru’s is great, why didn’t the masses avert some of the losses seen during the most recent financial meltdown?
Why are we as a people and as a country in the financial mess that we are in? How is all of that advice you are getting working for you? Is it possible that perhaps you’ve been misinformed? If the information you thought to be true about achieving financial independence and paying less taxes, turned out not to be true, when would you want to know?
What if the quicker way to pay OFF your mortgage was with a 30 year mortgage and not with a 15 year mortgage? What if the quickest way to get out of debt was to actually stay in debt? What if contributions to your 401K and IRA actually cost you more in taxes than they were saving you? What if everything the financial media was telling you to do would cause more financial harm than good? When would you want to know if what you thought to be true about achieving your financial goals turned out not to be true? In my book, Winning The Money Game: Separating The Myths From The Truth, Everything You Don’t Know About Achieving Financial Independence, I outline at least 9 myths that financial advisors disguise as financial advice. To get somewhere financially you’ve never been before, you’re going to have to do something financially you’ve never done before. As Robert Frost said in his eloquent poem, “I took the road less travelled and it made all of the difference.” Perhaps that’s what you need to do financially as well. It’s what I did and I can tell you it has made all of the difference!
Helping you avoid the financial insanity that many are facing is a crucial component of your financial plan and a critical step to achieving peace of mind. It’s just another way we help our clients with winning the money game and achieving financial independence.
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