It seems to me that the majority of americans who are not part of the top 10 percent of high earners were never taught or were never aware that they have been sold a bill of goods that is only good for Wall Street and our Government.  What I mean by that is this;

ALTHOUGH THE STOCK MARKET DOES GO UP OVER TIME… IT DOES NOT MEAN YOUR PORTFOLIO WILL!!!

I keep on hearing from people that “I have time”, “the market will turn”,  ”it can’t be that bad”… seriously, what if all of that is not true???  All I want to know is what is your safe money doing? If the market exploded 2 to 5 years from the time you intended to retire, what would you do and how long would it take you to recover…

Why not have some money (a portion of your portfolio) in a safe and appreciating financial vehicle that if there is bad news one day you can deal with it.  Not get stressed from it and never worry that it would drop with the market… and build it tax free.

I am not sure, but all indications are that we are headed towards a hard few years and higher taxes and less benefits… would it not be better to hedge for that?

Yes, I know this was a shameless plug for financial planning… but it is a better way than what most advisors work with.

What I don’t get is why people fail to protect their income and cashflow.  Everything else is covered except for the one thing that made all those things happen in the first place.  In the example above, if you were in the house that blew away and could not work because you were too hurt how would you continue to pay your bills?  If you are a business and were hurt physically and could not return to work, how would your business continue to function without you.  How do your employees get paid, your vendors, your associates, your OVERHEAD?

It is so simple to get a Cashflow and Income Protection Plan, but less then a fourth of the people that need it actually buy it.

Here are some sobering statistics:

     In the last 10 minutes, 490 Americans became disabled.
- National Safety Council®, Injury Facts® 2010 Ed.

    There is a death caused by a motor vehicle crash every 12 minutes; there is a disabling injury every 13 seconds.
- National Safety Council®, Injury Facts® 2008 Ed.

So, why would you wait to protect your paycheck, income or business overhead?  It’s not expensive or difficult!  in some cases you can buy the coverage and if you don’t use it you can get all the money you spent refunded to you.  Again, why wouldn’t you?

If you believe that taxes will be going down than you can stop reading now… if you believe they are going up and therefore tax freedom day will only get further out than what you need to do is figure out how to avoid paying more in taxes.  Everyone I know tells me they have a 401k and some IRA’s… I commend them for that.  However, what all my conversations with them reveal is that none of them know exactly what will happen to the money they save when it is time to distribute it.

What I am saying is this… accumulation of assets is great… accumulation of assets with out a plan of how to distribute those assets, not so great… What if you are one of the lucky ones and put away a million dollars in a 401k/IRA environment.   When it comes time to get some of it, your partner, NO not your spouse, the IRS wants its share first.  So even if you are in the lowest tax bracket and nothing changes you will have a 10 to 15 percent hit to your income.  What if uncle sam said he is short on cash and wants 30 percent?  what then?  what if your state government decided they have to charge you more on everything from income to property taxes… How much do you have to work with then?

What if there was a better option?  What if you could put money away and grow it Tax Free and then distribute it that way as well.  Conventional wisdom has failed most of us… look for the options that give you the best possible outcome once you remove the false beliefs we were fed for years.

http://www.investinganswers.com/a/when-your-states-tax-freedom-day-2536

Answer:  NEVER LOSE ANY MONEY!

In order to realize what is needed you must first understand inflation. The only way to explain inflation is with an example:

If you are in your twenties making 30K a year you will need an income of about 250k to 350k per year in retirement  just to maintain the same lifestyle you currently have.  if you are in your 30′s and making 60k you will need about that same amount in 30 years.  So the question you must ask… Is my income going to increase by that amount over the next 30 to 40 years? 

The trick from now on is going to be to keep the money you have, not speculate with it, not hope for the best “hope is not a strategy”, and make sure that that money is left for your family when you are gone.  Regardless of where you live in the USA or the world, inflation has an impact on our money and if not taken into consideration will hurt your long term planning.

An article in USA Today speaks to this in a way that most people can understand… Check it out, it is titled “A burger can teach inflation’s lessons” 

In your planning you should have a fundamental decision process that guarantees at least a portion of your money. Then, if you can afford risk, you can choose to speculate.  Make sure your money can play multiple roles.  The trick will be to have one dollar perform the job of Ten.  Avoid inflation and Taxes and you will be on your way to a smooth retirement ride.