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Financial Advisor Alexandria VA | Fischer Financial Group http://www.fischerfinancialgroup.com Tue, 17 Dec 2013 14:42:15 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Your Financial Reckoning Day Is Coming . . . http://www.fischerfinancialgroup.com/430/your-financial-reckoning-day-is-coming/ http://www.fischerfinancialgroup.com/430/your-financial-reckoning-day-is-coming/#comments Mon, 31 Dec 2012 22:26:31 +0000 FFG http://www.fischerfinancialgroup.com/?p=430 Read More]]> By Brian J. Fischer

For those familiar with the title this is not a review of the book by Bill Bonner of the same title (although I highly recommend you read it).  This is about a day of financial reckoning for a lifetime of decisions that you have made financially.  In other words, the day where you finally realize that all (or most) of the decisions you have made about money over the course of your life either worked or didn’t work.

The reason I am talking about this comes from my encounters with people who are the verge of retirement.  Being a financial advisor and author of a book on personal finance I run into people who upon learning about my book or what I do say to me (paraphrasing) “I don’t have any money so you really can’t help me.”  In response, I typically offer a polite smile and simply say “that’s okay, all the best to you” but deep inside I feel a bit of worry for these individuals.  Even though the person is usually smiling I feel this is far from a laughing matter.

Now I realize it is totally possible the person has money and they are just trying to avoid talking about it or getting a “sales pitch” from me but I venture that many of them may not have money.  Not having money on the verge of retirement is a serious issue and one not to be taking lightly.  I understand the whole idea of “wanting to live life” when they were younger but understand for almost everyone there will be a tomorrow.  A future in which a person will either have money or not have money.  A future in which a person might have to decide on spending money for food or on medication for their health care.  A  future in which a person is either living at home or living with their kids or in a nursing home.

Laughing about not having money on the verge of retirement is about as serious as it gets when it comes to your financial reckoning day and means that you have effectively mismanaged a lifetime worth of earnings.  Living a long life will become a curse too many people as they realize that they will live a lot longer than they expected.  Can you imagine working for 40 years then being retired for another 30 years?  Now imagine having no money for those 30 years of life in retirement.

Have you noticed I haven’t even mentioned health care expenses?  This is just about having money for the basics to live.  A recent report by Fidelity found that a couple retiring at age 65 will need $240,000 saved to pay for healthcare expenses throughout retirement and that expenditure will eventually consume nearly 61 percent of a retiree’s social security payment.  The average SSI check is only around $1200.  Another study by EBRI found that outside of home equity (which most people don’t have anymore) and pension plans (which most people don’t get anymore) 60 percent of workers have less than $25,000 saved.

Can you now see the writing on the wall?  Being on the verge of retirement with no money is not the end of the world but it most certainly will mean a lot of changes and soul searching are forthcoming for those individuals in this situation.  Will they make it?  Only time will tell . . .

© 2012 Fischer Financial Group L.L.C.

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Why You Should Kill Your Spouse http://www.fischerfinancialgroup.com/424/why-you-should-kill-your-spouse/ http://www.fischerfinancialgroup.com/424/why-you-should-kill-your-spouse/#comments Thu, 25 Oct 2012 13:35:45 +0000 FFG http://www.fischerfinancialgroup.com/?p=424 Read More]]> Now that I have your attention, did you know there is actually a benefit to killing your spouse?  Now of course I am speaking hypothetically but have you tried it?  From a financial planning perspective it is wise to know what would happen to your life (financially) if you or your spouse ever died or suffered a disability.  So take a moment and think about what life would be like if you, your spouse or both were no longer around.

Ask yourself the following:

Who is the first person you would call?

Can you make it without the other person financially?

Where is the money going to come from?

Do you know where your will or powers of attorneys are located?

Are you co-owners of everything or something titled in one name only?

Do you have life and disability insurance and where are the policies located?

Who is listed as the beneficiary on insurance and retirement accounts?

Will you be able to keep your current house or will you have to move?

What will happen to your children? Who will be the legal guardian?

Will you quit your job or have to keep working?

How will you access that separate bank account?

By now I hope you are getting the picture.   When you got married sure it was till death do us part, unfortunately sometimes the unexpected happens a lot sooner than you imagined.  It is only by being prepared ahead of time will you truly know if you will be able to weather the storm.  If you don’t know the answers to the questions above then perhaps you are not as prepared as you might think.  So take the time to kill one another . . . you’ll be thankful you did.

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Our Ridiculous Approach to Retirement http://www.fischerfinancialgroup.com/418/our-ridiculous-approach-to-retirement/ http://www.fischerfinancialgroup.com/418/our-ridiculous-approach-to-retirement/#comments Thu, 09 Aug 2012 15:05:00 +0000 FFG http://www.fischerfinancialgroup.com/?p=418 Read More]]> By TERESA GHILARDUCCI – New York Times – 7.21.2012

I WORK on retirement policy, so friends often want to talk about their own retirement plans and prospects. While I am happy to have these conversations, my friends usually walk away feeling worse — for good reason.

Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts. The specter of downward mobility in retirement is a looming reality for both middle- and higher-income workers. Almost half of middle-class workers, 49 percent, will be poor or near poor in retirement, living on a food budget of about $5 a day.

In my ad hoc retirement talks, I repeatedly hear about the “guy.” This is a for-profit investment adviser, often described as, “I have this guy who is pretty good, he always calls, doesn’t push me into investments.” When I ask how much the “guy” costs, or if the guy has fiduciary loyalty — to the client, not the firm — or if their investments do better than a standard low-fee benchmark, they inevitably don’t know. After hearing about their magical guy, I ask about their “number.”

To maintain living standards into old age we need roughly 20 times our annual income in financial wealth. If you earn $100,000 at retirement, you need about $2 million beyond what you will receive from Social Security. If you have an income-producing partner and a paid-off house, you need less. This number is startling in light of the stone-cold fact that most people aged 50 to 64 have nothing or next to nothing in retirement accounts and thus will rely solely on Social Security.

Even for those who know their “number” and are prepared for retirement (it happens, rarely), these conversations aren’t easy. At dinner one night, a friend told me how much he has in retirement assets and said he didn’t think he had saved enough. I mentally calculated his mortality, figured he would die sooner than he predicted, and told him cheerfully that he shouldn’t worry. (“Congratulations!”) But dying early is not the basis of a retirement plan.

If we manage to accept that our investments will likely not be enough, we usually enter another fantasy world — that of working longer. After all, people hear that 70 is the new 50, and a recent report from Boston College says that if people work until age 70, they will most likely have enough to retire on. Unfortunately, this ignores the reality that unemployment rates for those over 50 are increasing faster than for any other group and that displaced older workers face a higher risk of long-term unemployment than their younger counterparts. If those workers ever do get re-hired, it’s not without taking at least a 25 percent wage cut.

But the idea is tempting; people say they don’t want to retire and feel useless. Professionals say they can keep going, “maybe do some consulting” or find some other way to generate income well into their late 60s. Others say they can always be Walmart greeters. They rarely admit that many people retire earlier than they want because they are laid off or their spouse becomes sick.

Like the nation’s wealth gap, the longevity gap has also widened. The chance to work into one’s 70s primarily belongs to the most well off. Medical technology has helped extend life, by helping older people survive longer with illnesses and by helping others stay active. The gains in longevity in the last two decades almost all went to people earning more than average. It makes perfect sense for human beings to think each of us is special and can work forever. To admit you can’t, or might not be able to, is hard, and denial and magical thinking are underrated human coping devices in response to helplessness and fear.

So it’s not surprising that denial dominates my dinner conversations, but it is irresponsible for Congress to deny that regardless of how much you throw 401(k) advertising, pension cuts, financial education and tax breaks at Americans, the retirement system simply defies human behavior. Basing a system on people’s voluntarily saving for 40 years and evaluating the relevant information for sound investment choices is like asking the family pet to dance on two legs.

Not yet convinced that failure is baked into the voluntary, self-directed, commercially run retirement plans system? Consider what would have to happen for it to work for you. First, figure out when you and your spouse will be laid off or be too sick to work. Second, figure out when you will die. Third, understand that you need to save 7 percent of every dollar you earn. (Didn’t start doing that when you were 25 and you are 55 now? Just save 30 percent of every dollar.) Fourth, earn at least 3 percent above inflation on your investments, every year. (Easy. Just find the best funds for the lowest price and have them optimally allocated.) Fifth, do not withdraw any funds when you lose your job, have a health problem, get divorced, buy a house or send a kid to college. Sixth, time your retirement account withdrawals so the last cent is spent the day you die.

As we all know, these abilities are not common for our species. The current model for retirement savings, which forces individuals to figure out a plan for their retirement years, whether through a “guy” or by individual decision making, will always fall short. My friends are afraid, and they are not alone. In March, according to the Employee Benefit Research Institute, only 52 percent of Americans expressed confidence that they will becomfortable in retirement. Twenty years ago, that number was close to 75 percent.

I hope that fear can make us all get real. The coming retirement income security crisis is a shared problem; it is not caused by a set of isolated individual behaviors. My plan calls for a way out that would create guaranteed retirement accounts on top of Social Security. These accounts would be required, professionally managed, come with a guaranteed rate of return and pay out annuities. This is a sensible way to get people to prepare for the future. You don’t like mandates? Get real. Just as a voluntary Social Security system would have been a disaster, a voluntary retirement account plan is a disaster.

It is now more than 30 years since the 401(k)/Individual Retirement Account model appeared on the scene. This do-it-yourself pension system has failed. It has failed because it expects individuals without investment expertise to reap the same results as professional investors and money managers. What results would you expect if you were asked to pull your own teeth or do your own electrical wiring?

Although humans may be bad at some behaviors, we are good at others, including coming together and finding common solutions that protect all of us from risk. Surely we can find a way to help people save — adequately and with little risk — for their old age.

This article originally appeared in the New York Times.  Teresa Ghilarducci is a professor of economics at the New School for Social Research.

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If You’re Under 40, Don’t Bank on Social Security http://www.fischerfinancialgroup.com/412/if-youre-under-40-dont-bank-on-social-security/ http://www.fischerfinancialgroup.com/412/if-youre-under-40-dont-bank-on-social-security/#comments Wed, 02 May 2012 12:48:30 +0000 FFG http://www.fischerfinancialgroup.com/?p=412 Read More]]> The following appeared on April 28th in the online edition of the Wall Street Journal

If You’re Under 40, Don’t Bank on Social Security

If Plan A in your retirement scheme is Social Security, it’s time to start working on Plan B.

Based on reports last week from the folks responsible for the Medicare and Social Security Trust Funds, Americans—especially those under age 40—need to reconsider their retirement plans.

Absent major action by lawmakers, the annual reports say the combined assets of the Old-Age and Survivors Insurance and the Disability Insurance trust funds will be exhausted in 2033—three years sooner than was projected last year. The Disability Insurance fund will be exhausted in 2016, two years earlier than last year’s estimate.

Come 2033, just 21 short years from now, Social Security will pay just 75% of scheduled benefits, just 75 cents on the dollar. So, instead of getting, say, $1,000 per month from Social Security, you’ll get $750 per month come 2033.

The trustees forecast that Medicare’s hospital insurance fund would begin to run out of money beginning in 2024.

So what adjustments do you need to make to your retirement plan given these latest reports?

If you’re already retired, don’t worry. “The advice I give people is that if they are already retired, I see little risk to benefits,” says Jeffrey Brown, a finance professor at the University of Illinois at Urbana-Champaign. “No politician will cut for current seniors.”

But for those who plan on retiring in 2033 and beyond, the advice is much different.

Anyone younger than, say, 41 today should plan to get just 70% to 75% of promised benefits, Mr. Brown says. Unfortunately, there’s no silver bullet to make up the difference.

Those individuals should consider the usual strategies and tactics: increase the amount they save toward retirement; invest differently, perhaps with an emphasis on creating guaranteed inflation-adjusted income not unlike that provided by Social Security; delay retirement; work part time in retirement; delay taking Social Security; and consider any and all ways to turn assets into income—be it home equity, the cash value in a life-insurance policy or the collectibles in your curio cabinet.

Of all the bromides, however, delaying collecting Social Security is perhaps the most important. The average American who optimizes when to claim Social Security can “make their savings last two to 10 years longer,” says Bill Meyer, president of Retiree Inc.

What’s more, what’s good for you is also good for the Social Security Trust Fund. “Delaying or optimizing Social Security will help lessen the near-term burden on the Social Security liabilities,” Mr. Meyer says.

~ Robert Powell
Marketwatch.com

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Rachel Maddow Calls 401k Plan a “Scam” http://www.fischerfinancialgroup.com/403/rachel-maddow-calls-401k-plan-a-scam/ http://www.fischerfinancialgroup.com/403/rachel-maddow-calls-401k-plan-a-scam/#comments Sat, 22 Oct 2011 12:30:36 +0000 FFG http://www.fischerfinancialgroup.com/?p=403 Watch as MSNBC host calls 401(k) plans a scam on her television show and breaks down the Wall Street lies and our crumbling retirement system. . .

 

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Why I Don’t Invest In The Stock Market http://www.fischerfinancialgroup.com/376/why-i-dont-invest-in-the-stock-market/ http://www.fischerfinancialgroup.com/376/why-i-dont-invest-in-the-stock-market/#comments Fri, 24 Jun 2011 19:44:09 +0000 FFG http://www.fischerfinancialgroup.com/?p=376 Read More]]> This article appeared online at www.johncolanzi.com

Why I Don’t Invest In The Stock Market
by John Colanzi

I’m tired of hearing everyone from the President on down telling me to invest in the stock market.

If you want to help build America, invest in your business. This country was built by small business men and women.

I don’t invest in the stock market because it’s out of my control. I don’t determine how the company is run or where their profits are placed.

On top of all that, the returns are really peanuts compared to what you can earn from a well run business. When the market dropped they said investors shouldn’t worry they should have their money back in 5 years.

Guess what?

If I invest in a good program, I usually make back my investment plus within 5 minutes. Can the stock market do that?

I’ve invested in programs for $10 or $20 and made back 10 times that within 24 hours. I couldn’t even cover the brokerage fees for the cost of starting a business online.

Take control of your future. Take responsibility for your success. You are the future.

Learn how to market on the internet and you’ll never worry whether the economy is up or down. You’re the boss. Your ability will determine your future.

Why are so many people more willing to invest in the markets and not in themselves?

They don’t believe in themselves. They think big business will make the money for them.

I’m going to tell you something that I hope you take to heart. I know you can succeed. I know you can outperform the stock market.

I believe in you. Probably more than you believe in yourself.

Don’t invest in the stock market. Invest in YOU INC.

In the words of Ben Franklin “Keep Thy Shop and Thy Shop will Keep Thee.”

Take off your blinders and realize, you were born to succeed. Invest in you.

Wishing You Success,
John

http://johncolanzi.com

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Welcome http://www.fischerfinancialgroup.com/1/hello-world/ http://www.fischerfinancialgroup.com/1/hello-world/#comments Fri, 20 May 2011 08:12:35 +0000 FFG http://fischerfinancialgroup.com/?p=1 Read More]]> Welcome to the FFG website! If you are looking for a blend of personal service and expertise, you have come to the right place.  FFG is dedicated to providing  “no-hassle” nontraditional financial advice and service to individuals, families and small businesses.  We believe your financial success is rooted in education not manipulation. Thank you for taking time to visit our website.

Brian J. Fischer, President

Fischer Financial Group

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Mutual Fund Fees http://www.fischerfinancialgroup.com/359/mutual-fund-fees/ http://www.fischerfinancialgroup.com/359/mutual-fund-fees/#comments Tue, 05 Apr 2011 16:54:53 +0000 FFG http://fischerfinancial.wordpress.com/?p=221 Read More]]> I have not written at length about the mutual fund scandal as of yet but this press release from 2009 I happened to come across and thought I would offer quick remarks. Having followed mutual funds for many years, I have come to the conclusion that most (not all) are simply a part of the scam I coin as “Wall Street Greed.” The media entices people to invest in mutual funds saying they are great vehicles because they offer professional management, built in diversification and convenience.

The dark side of some mutual funds is what takes place behind the scenes: market timing, excessive fees and poor performance (relative to benchmark stock indices), shelf space payments – all the stuff you have absolutely no clue about. When all the smoke clears it becomes pretty apparent of what Wall Street’s motive is…to keep your money as long as possible. Why? Because Wall Street makes its money by managing your money…plain and simple.

So when a company like Putnam got exposed during the mutual fund scandal (which continues to this day) for its role in hurting its shareholders with its illegal practices they have to find away to “reinvent themselves” after investors in their funds left in droves. Thus it peaked my interest when I came across this press release in the Boston Globe:

Putnam fund fees will drop or be linked to performance

By Todd Wallack, Globe Staff | July 29, 2009

Putnam Investments, which has drawn complaints from some investors for charging high fees while delivering sub-par returns over the past decade, announced plans yesterday to dramatically overhaul its fee structure.

The Boston money manager said it plans to lower the management fees for many of its fixed income funds on Aug. 1, to make them more price-competitive. And it plans to tie fees for many of its other funds to performance, so Putnam will only be paid a premium if it delivers strong results and will be paid less if it stumbles badly.

“This puts us on the same side of the table as the shareholder,’’ said Putnam chief executive Robert Reynolds.

Among the more dramatic examples, the Putnam American Government Income Fund’s management fee will be reduced from 0.62 percent of the money invested to 0.41 percent a year. The average fee reduction for bond funds would be 13 percent, and 10 percent for asset allocation funds. Putnam has $102.8 billion in assets under management.

The new price structure is just the latest in a series of changes introduced by Reynolds, a longtime Fidelity Investments executive, who took over Putnam a year ago. Over the past 13 months, Reynolds has added products, recruited dozens of investment professionals, and changed the way Putnam manages its funds.

Where they sorely lagged in previous years, Putnam funds generally have performed better than average so far this year, according to Morningstar, a Chicago research firm that tracks mutual funds.

Morningstar analyst Jonathan Rahbar praised the fee reduction as “shareholder friendly’’ and said it could help Putnam in its battle to attract investors.

“It’s something that opens another door for them’’ Rahbar said. “But performance and consistency will be the main factors behind whether investors go back to Putnam.’’

Avi Nachmany, executive vice president of Strategic Insight, another research firm that tracks mutual funds, said Putnam management fees are currently about average for mutual funds. But Nachmany said the changes are another example of how Putnam has become “very innovative and forward looking’’ under Reynolds.

Reynolds said the management fees for its stock funds are already among the lowest in the industry and he wanted fees on Putnam’s fixed income funds to be as well; currently, he said, the fees on fixed income funds are about average.

Fees on mutual funds have been getting a bad rap lately as seen by the number of lawsuits filed and congressional involvement. So let’s get this right…Putnam is enticing investors back to their funds by promising to lower fees that are already too high and if they beat performance expectations (not defined in release) they get MORE money but if they don’t they get less money. This sounds like a WIN-WIN for Putnam. Any way you slice it Putnam makes money…its just a matter of how much. Now the underlying danger lies in how rich risk Putnam will take with its funds in an effort to “beat performance expectations.”

If Putnam truly wants to be “on the same side of the table with investors” how about Putnam saying they make money ONLY if their shareholders make money. That’s true innovation!

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15 Reasons Why Your 401(k) May Be Your Riskiest Investment http://www.fischerfinancialgroup.com/358/15-reasons-why-your-401k-may-be-your-riskiest-investment/ http://www.fischerfinancialgroup.com/358/15-reasons-why-your-401k-may-be-your-riskiest-investment/#comments Mon, 14 Mar 2011 16:12:00 +0000 FFG http://fischerfinancial.wordpress.com/?p=334 Read More]]> 15 Reasons Why Your 401(k) May Be Your Riskiest Investment

By Garrett Gunderson, Author Killing Sacred Cows

Financial institutions are genius marketers. They are able to get millions of Americans to hand over their money with very little thought taken, very little knowledge of the so-called investments offered, and even less control of their investments.

When the evidence is plainly presented, it becomes overwhelmingly clear that putting money into 401(k)s and similar qualified plans is not investing at all — it is one of the riskiest gambles for most individuals. Read the following reasons why I say this, and ask yourself if it’s time to reconsider your 401(k).

1. Limited Opportunity For Cash Flow

Qualified retirement plans, such as 401(k)s and IRAs, do not provide immediate cash flow, which means that you cannot benefit from them through velocity and utilization. The theory is that letting the money sit allows it to compound, but for most people this really means that it stagnates.

Most people will not choose to utilize these funds even when a particularly compelling opportunity arises that will make them far more than the 401(k) would, even accounting for the penalties. This means that numerous legitimate opportunities are passed by as people stay “in it for the long haul.”

2. Lack of Liquidity

The money is tied up with penalties attached for early withdrawal. Although there are a few technicalities that allow penalty-free withdrawals, the restrictions are so numerous that very few know how to get around them.

3. Market Dependency

The performance of the funds is dependent upon market factors that most individuals do not have the knowledge nor the ability to understand or mitigate.

This means that your retirement plans are based on unknowable projections, making for a dangerous and uncertain planning environment. Uncertainty causes fear, and fear leads to mistakes, worry, scarcity, and ultimately lost hopes and dreams. Do you want to live your ideal life only if the market cooperates?

4. The Match Myth

“Take the match — it’s a guaranteed 100 percent return before you even get started in the market!” You’ve heard that before, right?

The problem is that it’s a complete myth — were it true most 401(k) savers could end up with literally billions of dollars at retirement. What is the true impact on the bottom line to you? When do you utilize the match?

5. Lack of Knowledge

How much do you really know about your 401(k)? Do you know what happens to the money? Do you know what funds you’re invested in? Do you know the companies that your funds are invested in? Have you seen financials for these companies and do you know their key executives?

Do you know the fund manager by name, her history, her investment philosophy, her performance? How can you expect to gain a return from something you know so little about? How can you create real, tangible value in the world in the 401(k) scenario?

And how can this be called investing? Without full knowledge of an investment, placing money amounts to little more than gambling, which is the desire to get something for nothing. The “something-for-nothing” attitude – no matter now subconscious – is exceedingly destructive.

6. Administrative Fees

The funds are subject to various administrative fees in addition to expense ratios and 12-b1 fees (for marketing expenses). This is a fact which most people and even many advisors ignore. This means that your returns will be negatively impacted and your projections can be substantially off.

7. Under-Utilization Because of Tax Deferral

If you don’t like paying taxes today, why would you want to pay them any more in the future? In other words, the tax deferral aspect, which is touted as a great boon, is actually a primary factor contributing to qualified plan money being notoriously under-utilized.

Most retirees let the money sit, even during their retirement years, for fear of triggering tax consequences. If you just have to pay the taxes as a later date how is it a tax advantage? The reason there is no tax paid is because you have deferred income by never taking constructive receipt of your earning and instead deferring them into a qualified plan.

8. Higher Tax Brackets Upon Withdrawal

Closely related to the previous problem, the other issue with taxes is that most advice fails to take into consideration the likelihood of you being in a higher tax bracket during your retirement years than you were previously.

Think about it: If you have achieved any measure of success living the accumulation theory, you should actually be in a higher tax bracket at retirement, although most advisors project that you will be in a lower tax bracket.

So this means that deferring your taxes results in a far greater tax burden than would otherwise be incurred using different products and strategies than the conventional route. It’s profound irony that people project healthy returns on their qualified plan while also projecting that they will be in a lower tax bracket at retirement.

9. Estate Taxes

401(k)s are sitting ducks for estate taxes. Much qualified plan money is never utilized by those who actually accumulated it because they hold off so long on withdrawing it in fear of paying taxes.

Yet when the money is passed on to the next generation, there is not only an income tax that can be triggered, it may be subject to an estate tax that there is no internal provision to avoid either. So when the money is passed to the next generation, the government taking a healthy chunk before it passes hands. This begs the question of who is the real beneficiary of the program.

10. No Exit Strategy

Getting into a 401(k) seems simple enough. In fact, many companies start employees’ 401(k) contributions automatically upon hiring them. They sound great – you’re getting a match, tax deferral, a wide choice of funds relating to your risk tolerance.

But how are you going to get out of it? How many people take this into consideration when they start contributions? How many people understand the penalty and tax consequences? Most people don’t fully realize the implications until it’s too late, and so their qualified plan money sits unutilized.

In that case, what is the real rate of return of your money? Once again, in that scenario, who are the real beneficiaries? Not them, and not their heirs to a large extent – it’s the institutions and the government.

11. Subject to Government Control and Change

Did you know your 401(k) does not even technically belong to you? Read the fine print and you will find that it is what’s called an “FBO” (For Benefit Of). In other words, it’s technically owned by the government, but provided for your benefit. It’s essentially a tax code.

If history proves to be a reliable guide, 401(k) funds are therefore in great jeopardy. In the same way that the government raises and lowers taxes at their whim, what is to keep them from changing the rules and taking the money that you so diligently saved?

12. Golden Handcuffs

Are you at your current job because it aligns with your passions and purpose, or because of the great benefits? Are you just holding on long enough until your qualified plan funds are fully vested? Are there ways that you could create more wealth and opportunity by living your Soul Purpose, rather than being attached to the deceptive security of a 401(k)?

13. Disinvesting

Suppose you’ve retired and want to begin taking interest payments from your qualified plan. You project that you can withdraw 6 percent a year, based on an average return of 8 percent a year. However, what happens to your principal when the funds are volatile and the market experiences down years?

Your funds may be receiving an average 8 percent annually, but that means that some years will be lower, some will be higher. If in one year your fund is down 10 percent, you’re tapping into your principal to take your interest withdrawal. At that point, you have only two choices: 1) start withdrawing principal, or 2) leave the money alone until your funds are up again.

14. No Holistic Plan

I’ve witnessed on many occasions people whose finances are in shambles and although they have much more pressing needs, they diligently contribute to their 401(k). They’ve been convinced to do so, of course, because of the match, tax deferral, etc. It’s like a person trying to take care of a scraped knee when their wrist is slit.

What they really need is a macroeconomic approach to their finances that will help them identify, prioritize, and manage all pieces of their financial puzzle, with all pieces coordinated and working together.

15. Neglect of Stewardship

Ultimately, the most destructive aspect of 401(k)s is that they cause many individuals to abdicate their responsibility, abandon self-reliance, and neglect their stewardship over their own prosperity.

People think that if they just throw enough money at the “experts” that somehow, some way, and without their direct involvement they will end up thirty years later with a lot of money. And when things don’t turn out that way they think they can blame others – despite the fact that they only have themselves to blame.

Conclusion

Qualified plans are promoted on such a wide scale because those promoting it have vested interests – and their interests don’t necessarily coincide with yours.

If you currently contribute to a 401(k), stop and think about it for a minute. What is it really doing for you, now and in the future?

The desire to save money for retirement is wise and prudent, but after reading the above, do you think it’s possible to find other investment philosophies, products, and strategies that would meet your financial objectives much more quickly and safely than a qualified plan? Are you really comfortable exposing yourself to this much risk?

How can you mitigate your risk, increase your returns, and create safe and sustainable investments? How can you create more control and better exit strategies, reduce your tax burden, and increase your cash flow?

Your financial future depends on your answers to these questions.

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America Is ‘Not’ Broke http://www.fischerfinancialgroup.com/357/america-is-not-broke/ http://www.fischerfinancialgroup.com/357/america-is-not-broke/#comments Mon, 07 Mar 2011 04:16:13 +0000 FFG http://fischerfinancial.wordpress.com/?p=328 Read More]]> The following is a transcript and video of a speech Michael Moore gave to workers in Wisconsin…definitely eye opening

America is not broke.

By Michael Moore – 3.5.2011

Contrary to what those in power would like you to believe so that you’ll give up your pension, cut your wages, and settle for the life your great-grandparents had, America is not broke. Not by a long shot. The country is awash in wealth and cash. It’s just that it’s not in your hands. It has been transferred, in the greatest heist in history, from the workers and consumers to the banks and the portfolios of the uber-rich.

Today just 400 Americans have as much wealth as the bottom half of all Americans combined.

Let me say that again. 400 obscenely rich people, most of whom benefited in some way from the multi-trillion dollar taxpayer “bailout” of 2008, now have as much loot, stock and property as the assets of 155 million Americans combined. If you can’t bring yourself to call that a financial coup d’état, then you are simply not being honest about what you know in your heart to be true.

And I can see why. For us to admit that we have let a small group of men abscond with and hoard the bulk of the wealth that runs our economy, would mean that we’d have to accept the humiliating acknowledgment that we have indeed surrendered our precious Democracy to the moneyed elite. Wall Street, the banks and the Fortune 500 now run this Republic — and, until this past month, the rest of us have felt completely helpless, unable to find a way to do anything about it.

[youtube=http://www.youtube.com/watch?v=wgNuSEZ8CDw]

I have nothing more than a high school degree. But back when I was in school, every student had to take one semester of economics in order to graduate. And here’s what I learned: Money doesn’t grow on trees. It grows when we make things. It grows when we have good jobs with good wages that we use to buy the things we need and thus create more jobs. It grows when we provide an outstanding educational system that then grows a new generation of inventers, entrepreneurs, artists, scientists and thinkers who come up with the next great idea for the planet. And that new idea creates new jobs and that creates revenue for the state. But if those who have the most money don’t pay their fair share of taxes, the state can’t function. The schools can’t produce the best and the brightest who will go on to create those jobs. If the wealthy get to keep most of their money, we have seen what they will do with it: recklessly gamble it on crazy Wall Street schemes and crash our economy. The crash they created cost us millions of jobs. That too caused a reduction in revenue. And the population ended up suffering because they reduced their taxes, reduced our jobs and took wealth out of the system, removing it from circulation.

The nation is not broke, my friends. Wisconsin is not broke. It’s part of the Big Lie. It’s one of the three biggest lies of the decade: America/Wisconsin is broke, Iraq has WMD, the Packers can’t win the Super Bowl without Brett Favre.

The truth is, there’s lots of money to go around. LOTS. It’s just that those in charge have diverted that wealth into a deep well that sits on their well-guarded estates. They know they have committed crimes to make this happen and they know that someday you may want to see some of that money that used to be yours. So they have bought and paid for hundreds of politicians across the country to do their bidding for them. But just in case that doesn’t work, they’ve got their gated communities, and the luxury jet is always fully fueled, the engines running, waiting for that day they hope never comes. To help prevent that day when the people demand their country back, the wealthy have done two very smart things:

1. They control the message. By owning most of the media they have expertly convinced many Americans of few means to buy their version of the American Dream and to vote for their politicians. Their version of the Dream says that you, too, might be rich some day – this is America, where anything can happen if you just apply yourself! They have conveniently provided you with believable examples to show you how a poor boy can become a rich man, how the child of a single mother in Hawaii can become president, how a guy with a high school education can become a successful filmmaker. They will play these stories for you over and over again all day long so that the last thing you will want to do is upset the apple cart — because you — yes, you, too! — might be rich/president/an Oscar-winner some day! The message is clear: keep you head down, your nose to the grindstone, don’t rock the boat and be sure to vote for the party that protects the rich man that you might be some day.

2. They have created a poison pill that they know you will never want to take. It is their version of mutually assured destruction. And when they threatened to release this weapon of mass economic annihilation in September of 2008, we blinked. As the economy and the stock market went into a tailspin, and the banks were caught conducting a worldwide Ponzi scheme, Wall Street issued this threat: Either hand over trillions of dollars from the American taxpayers or we will crash this economy straight into the ground. Fork it over or it’s Goodbye savings accounts. Goodbye pensions. Goodbye United States Treasury. Goodbye jobs and homes and future. It was friggin’ awesome and it scared the shit out of everyone. “Here! Take our money! We don’t care. We’ll even print more for you! Just take it! But, please, leave our lives alone, PLEASE!”

The executives in the board rooms and hedge funds could not contain their laughter, their glee, and within three months they were writing each other huge bonus checks and marveling at how perfectly they had played a nation full of suckers. Millions lost their jobs anyway, and millions lost their homes. But there was no revolt (see #1).

Until now. On Wisconsin! Never has a Michigander been more happy to share a big, great lake with you! You have aroused the sleeping giant know as the working people of the United States of America. Right now the earth is shaking and the ground is shifting under the feet of those who are in charge. Your message has inspired people in all 50 states and that message is: WE HAVE HAD IT! We reject anyone tells us America is broke and broken. It’s just the opposite! We are rich with talent and ideas and hard work and, yes, love. Love and compassion toward those who have, through no fault of their own, ended up as the least among us. But they still crave what we all crave: Our country back! Our democracy back! Our good name back! The United States of America. NOT the Corporate States of America. The United States of America!

So how do we get this? Well, we do it with a little bit of Egypt here, a little bit of Madison there. And let us pause for a moment and remember that it was a poor man with a fruit stand in Tunisia who gave his life so that the world might focus its attention on how a government run by billionaires for billionaires is an affront to freedom and morality and humanity.

Thank you, Wisconsin. You have made people realize this was our last best chance to grab the final thread of what was left of who we are as Americans. For three weeks you have stood in the cold, slept on the floor, skipped out of town to Illinois — whatever it took, you have done it, and one thing is for certain: Madison is only the beginning. The smug rich have overplayed their hand. They couldn’t have just been content with the money they raided from the treasury. They couldn’t be satiated by simply removing millions of jobs and shipping them overseas to exploit the poor elsewhere. No, they had to have more – something more than all the riches in the world. They had to have our soul. They had to strip us of our dignity. They had to shut us up and shut us down so that we could not even sit at a table with them and bargain about simple things like classroom size or bulletproof vests for everyone on the police force or letting a pilot just get a few extra hours sleep so he or she can do their job — their $19,000 a year job. That’s how much some rookie pilots on commuter airlines make, maybe even the rookie pilots flying people here to Madison. But he’s stopped trying to get better pay. All he asks is that he doesn’t have to sleep in his car between shifts at O’Hare airport. That’s how despicably low we have sunk. The wealthy couldn’t be content with just paying this man $19,000 a year. They wanted to take away his sleep. They wanted to demean and dehumanize him. After all, he’s just another slob.

And that, my friends, is Corporate America’s fatal mistake. But trying to destroy us they have given birth to a movement — a movement that is becoming a massive, nonviolent revolt across the country. We all knew there had to be a breaking point some day, and that point is upon us. Many people in the media don’t understand this. They say they were caught off guard about Egypt, never saw it coming. Now they act surprised and flummoxed about why so many hundreds of thousands have come to Madison over the last three weeks during brutal winter weather. “Why are they all standing out there in the cold? I mean there was that election in November and that was supposed to be that!

“There’s something happening here, and you don’t know what it is, do you …?”

America ain’t broke! The only thing that’s broke is the moral compass of the rulers. And we aim to fix that compass and steer the ship ourselves from now on. Never forget, as long as that Constitution of ours still stands, it’s one person, one vote, and it’s the thing the rich hate most about America — because even though they seem to hold all the money and all the cards, they begrudgingly know this one unshakable basic fact: There are more of us than there are of them!

Madison, do not retreat. We are with you. We will win together.

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