Premier Financial Solutions / Wed, 26 Oct 2016 20:45:17 +0000 en-US hourly 1 https://wordpress.org/"false">http://gpswp.com/premierfns/?p=620 One of the things I find when I talk with people when they come into our office is, they have their retirement savings in places they don’t really want it. A typical client has their retirement money in stocks, mutual funds or bank accounts where they’re making basically no interest. [...]
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]]> One of the things I find when I talk with people when they come into our office is, they have their retirement savings in places they don’t really want it. A typical client has their retirement money in stocks, mutual funds or bank accounts where they’re making basically no interest.  During our initial visit I always ask the same question.  “When deciding what to do with the money you are saving for retirement, what is most important to you?”

  1. Making sure our money is safe.
  2. Having the potential to earn higher interest and growth
  3. Being able to move our money at any time.

Most people I talk with tell me safety is their number one priority.  When I ask what the second concern is, most people tell me interest and growth potential.  So of the three factors, safety is #1, interest and growth potential are #2 and liquidity is #3, or least important.

For most people there is a difference between what they want and what they have.  If a client has their retirement savings in a stock mutual fund, what does that give them?  Interest, growth potential and liquidity. The opportunity for growth is there along with liquidity but their money is not necessarily safe.  Think about this if the market declines so does their retirement savings.  So if safety is most important, do you see the disconnect?  What about retirement money in bank accounts or money markets , what does this give them, #1 Safety, #2 liquidity, but what about interest and growth?  If this is important, do you see the disconnect here

In both cases there’s a difference between what the client wants and what he has.  In all my years as an advisor, this difference is the reason many clients don’t sleep well at night.  So, what are you really trying to achieve with your retirement savings?  #1 Are you trying to create a steady reliable income in retirement?  #2 Do you want your income to be guaranteed to continue for the rest of your life? #3  Do you want to be able to know right now what your income will be without guesswork?  If the answer to these questions is yes, make sure the way you have your money positioned matches what you want.  As always talk to your financial advisor about your best options.

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]]> Seven Mistakes People Make with Their Money /seven-mistakes-people-make-money/ Wed, 26 Oct 2016 20:43:50 +0000 http://gpswp.com/premierfns/?p=618 Mistake number one is paying taxes on the same dollar more than once. Albert Einstein was quoted as saying, “compound interest is the eighth wonder of the world”. But Albert never lived under our current tax system. Today we have what our politicians call a progressive tax system; the easiest [...]
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]]> Mistake number one is paying taxes on the same dollar more than once. Albert Einstein was quoted as saying, “compound interest is the eighth wonder of the world”. But Albert never lived under our current tax system. Today we have what our politicians call a progressive tax system; the easiest way to say, “the more we make, the more they take”.

Nevertheless, most people think that compound interest is a good thing, and it would be if we lived in a perfect tax-free world. Trouble is, we don’t. If you think about certificates of deposit, taxable bonds, mutual funds, real estate, money markets and individual stocks, to name a few, all of these certainly can grow an compound to sizable amounts of cash. The problem is, as these accounts grow and compound, so does the government’s fair share call taxes. Let me show you what I mean.

In the perfect world of compound interest, $1O,OOO earning 5% over a 30 year period, grows to a little over $43,000.

But don’t get too excited. The government has something to say about this magical compounding.

With any kind of growth, it becomes our patriotic duty to share with the IRS even if it means paying taxes on money that’s already been taxed. But that’s not all we need to take this one step further. The money we pay taxes with creates another wealth-eroding problem called lost opportunity cost.

What is lost opportunity cost or LOC? It is the understanding that we not only lose the dollar, but would also lose the interest we could’ve earned if we had to avoid the cost.

So how do you avoid all these taxes and the lost opportunity cost? Two ways: First, find financial products and strategies that allow you to defer taxes. Secondly, you deal with the original tax upfront and avoid future taxes altogether.

As always, talk to your financial advisor about your best options.

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