'Getting Started on the School System' Pt. I: Don't Get Me Started

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What were you taught in school? Poetry of Ancient Mesopotamia? The differences between the Illiad, the Odyssey, and the Aeneid? Calculus with Analytical Geometry? All these subjects are useful, but it depends to whom and what field. Does the average American need to know about ancient pottery? Probably not. What does the average American need to know? Maybe how to change a tire; how to sew on a button; how to write a check; how to do their taxes. In my opinion, most importantly: finances. For some idiotic reason, finances, credit scores, and financial strategy are left out of the school curriculums. The only thing we are really taught about (and it’s not even really discussed, more of just briefly touched on) is the stock market, not  even scratching the surface of the fundamentals. It’s more of just “there’s this thing called the stock market,” and then we go about the next topic. Unfortunately, most Americans get out of date information from people that have names that rhyme with Rave Damsey. Invest in the market, pay off all your debts (regardless of interest rates), only buy mutual funds, ect. According to the National Council on Aging, 43% of seniors rely on their social security check; otherwise, becoming “homeless” would be an unfortunate reality. So, are these ancient ideas of making money and investing the true recipe for financial optimization? The answer is “not really.” Here is why.

 

An overwhelming myriad of Americans work, work, work, hustle, hustle, hustle, and it just doesn’t seem to be enough. They keep failing even though they do what needs to be done. If you’re a Boomer, you did what you were told to do. You worked, bought a house, went to college (at a time that it was affordable), invested in your employer sponsored retirement plan/IRA. Yet, now that (thank God) you are blessed to live a longer life, that savings account, that CD, that IRA, just doesn’t seem like it will last. The idea of moving in with the son/daughter and their family’s is on the horizon. If you’re a Gen X’er, you did what you were supposed to do. You went to school, you work your tail off, you bought a house. Yet, both you and your spouse work 70-hour weeks and make just enough money to be broke. You don’t see your kids as much as you’d like. You’re tired all the time. It might even make it challenging to remember to be husband and wife (or wife and wife or husband and husband, no judgement here) because next to keeping a roof over the family’s heads, being a good parent is a long and time-sensitive task. Your dollar doesn’t go nearly as far as your parent’s might have gone. If you’re a Millennial: you did what you were told to do. Since birth, I personally remember everyone chant “Go to College!” Millennials are constantly told to go to college, get an internship, work, invest, the whole nine yards. But at the present time, going to school might not be possible. Not everyone wants to start $100,000 in debt for a job that might not exist once out of school. Or for a job that doesn’t pay enough to pay off the student loans, anyway. And by that time, with the debt and poor job choices, there is no way in Hell that you can save for retirement, buy a home, or stimulate the economy with your expenditures.

 

Guess what. We were all lied to. We were all taught bad information. We were taught what worked for the Boomer generation, and even they are running out of money. Boomers had the economy where the father could work, the mother could stay home, the mortgage could be paid, and everyone could go to college. Now, if both parents aren’t working at least two jobs, you get evicted out of your crummy apartment. The only thing that everyone has heard the same is to put all your chips in the casino known as the stock market. There’s this common misconception (you can thank great marketing by Wall Street, greedy financial advisors, and Big Banks for this) that you need risk to create wealth. If that was the case, why are your grandparent’s money most likely going to run out?

 

Here lies the issue. Two things that most people don’t ever plan for: taxes and medical expenses. Baby Boomers mostly invested in mutual funds/IRAs/and other qualified vessels. IF they were lucky enough to not lose 40% in 2008 and were able to make most of it back up, odds are, they are giving away/gave away 25% to Uncle Sam as an income tax. According to AARP, a man retiring today at age 65 will need $189,687 to pay medical costs not covered by Medicare. IF you were responsible, invested wisely, and accrued let’s say $500,000, after taxes and medical bills (not even considering God forbid you need extended care or nursing care), you’re only looking at around $185,000 left to last you let’s say 20 years. Let’s pray you don’t have a mortgage or car payment left. Here’s the issue: according to the Employee Benefit Research Institute (EBRI), the average IRA for an individual over age 70 is roughly $219,000. That’s a tad lower than the $500,000 I suggested. So, are you willing to risk your money, lock up your money, get taxed on your money, to maybe, maybe have enough to live on come retirement?

The millennials or the Gen X’ers, who don’t really have enough funds to continuously contribute, is it realistic that you’ll have enough to live on come retirement? We are 20 Trillion dollars in debt. Regardless of short-term politics, do you think taxes are going to go up or go down? Do you think with our spending and borrowing habits from Social Security, that it is really going to be there in 40 years?

What if there were a strategy, an instrument, that if correctly designed, could give you a constant return, no liquidity risk, no market risk, tax-free, pays for major medical bills, income for life, and will allow you to earn interest on withdrawn money? What if you could buy a stock, sell it immediately, receive the settled funds, yet still receive the dividend and appreciation for that year? Would you buy it? Would you want to learn about it? Would you enroll in that program? Think it’s too good to be true? Fortunately, it’s not. It’s just the best kept secret since the JFK assassination. It isn’t really spoken about. Until recently, it was only meant for incredibly affluent individuals or large institutions. Between Bank of America, Chase, and Citibank, according to FDIC records, they hold roughly $35 Billion in tier one assets in these instruments that help them pay bonuses, taxes, and expenditures altogether. If you are curious to see how you can secure not only your retirement, but working years financial optimization as well; if you want to secure your children’s education, if you want to earn interest on the money you spent on vacation, please feel free to set up a no-obligation, free consultation and see if it is the right match for you.