The first step in wealth creation and preservation is to
begin investing now. Time and interest will be your financial friends, and the
sooner you take action, the sooner you begin creating a wealthy retirement.
Even if you are older or already retired, it’s never too late.
While I have no objection to stocks, bonds, mutual funds and
the like, to some extent, it needs to be understood that the financial markets
have risks and the indexed annuity does not.
It should be noted indexed annuities should not be confused
with variable annuities or fixed annuities, and I have long favored them for
retirement and other financial needs as opposed to other risky investments. In
fact, over time they have been shown to outperform the market and have many
features that are not found anywhere else.
In the last few months or so, the market has been flat at
best, and if you are not earning money you are losing it. Here is an
illustration. Suppose you invested $100,000 in the stock market and lost 25%.
You would then have $75,000. Let’s say next year you get back 25% thinking you
have broken even, but in reality you have only gotten back $18,750 of the
$25,000 and you have also lost a year of trying to play catch-up when you could
have been earning steadily elsewhere.
Once the market drops as it did severely in 2000, 2001, 2008
and early 2020, you have lost money in plain English even if the market comes
back. If the indexed annuity is set up properly and followed, it will earn in
good and bad markets, and this is the secret why they win over time.
The next step is never get emotional with money. If your
pipes break you would probably call a plumber, and if your teeth hurt you would
probably call a dentist.
If you want to have a successful retirement or financial
security for any other reason, you should utilize an experienced financial
professional who specializes with seniors and retirement planning.
Attitude is also very important in wealth accumulation. We
become what we think, and if you think, speak and act wealthy even if you’re
not, you begin to attract wealth to you. The same is true with poverty. Two
classic books in this regard are “Think and Grow Rich” and “The Power of
Positive Thinking.”
Years ago when I first began my career, I was with a couple
who at the time were earning far more than I was, but were living in a state of
poverty. I understood the reason was that they were not properly managing their
money. From that point on I was never again intimidated by anyone’s wealth, and
neither should you be. What matters is how much you keep, not what you earn. I
realized if I wanted to have a successful and early retirement, all I really
had to do was to learn from those who had done it and copy them.
If you need some money to begin investing, try to spend less
and save more.
Break down your finances into two categories: things you
need and things you want. You can also add a third category: things you don’t
need. And this includes wasteful cash value life insurance and overspending on
all forms of insurance and other areas of your financial life.
I have already had a family with 16 whole life insurance
policies. While this is legal, it is plainly outrageous and wrong, and I was
able to help them recover about $110,000 in cash value that they never would
have seen otherwise.
If anyone tells you to purchase cash value life insurance
(whole life, universal life, etc.) ask him/her what kind of policy they have
and ask to see it. Throughout my career I have never told anyone to do anything
that I didn’t do first, as leading by example is the way to go.
Other steps to consider: Get out of credit card debt as soon
as possible and pay off your mortgage early. The process of paying off your
mortgage early is known as amortization and can be done by paying some extra
money each month toward the principle. This will save you a ton of interest
which can also be used for further wealth accumulation and retirement.
No matter what, remember to pay yourself first and keep in
mind money never gets tired and will work for you 24/7. Put it to work in the
right place now and you are on your way!
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