True Financial Potential™

The primary strategies and products that make up our financial picture should be sustainable today and for decades into the future; however, there are real threats that we must consider if we want to implement those products and strategies. This attention to sustainability is missed all too frequently as these threats undermine our true financial potential. Three threats in particular are the most common:

1.)  Traditional Financial Planning

  • Needs-based- Is a minimalist approach to “only what I need” versus “what is possible?”
  • Proven Inefficient- Requires continuous monitoring & review; is very costly; often, lose a great deal of money without knowing about it
  • Requires guesswork- Projections seek to attain “hit” versus “miss” scenarios using rates of return, taxes, inflation, interest rates
  • Promotes risk- The projected mind-set that high-risk is based high-reward while downplaying the impact of high-loss sequences in time
  • Based on linear math- Is an accumulation method in growing wealth. It does not use a multiplier-effect theory which our economy is based
  • Minimum protection- Home, Auto, Health, Disability, Long-Term Care, Legal Documents, Life are typically incomplete and/or minimized
  • Little financial cushion- greater emphasis is placed on investing with little attention given to protection, saving & sufficient liquidity
    .

2.)  Financial Disorganization

  • Multiple financial institutions- Tends to create increasing inefficiencies due to the lack of coordination in planning
  • Constant change- Keeping a “current” view of your financial picture in focus is difficult at best
  • Bias origin- products and services based on individual philosophies without considering the buyers best interest (BI)
  • Hype origin- Marketing for profit rather than consultations based on professional ethics
  • Inefficiencies- personal financial information is scattered among multiple advisors, institutions, and accounts
  • Money locked-up- financial institutions utilize strategies for them to make money. Involve hidden economic principles
  • Confusion- Inability to see the “big picture” of your entire financial outlook
  • Penalties- drain wealth-building when sufficient liquidity is not available.  Mechanism used to ensure greater profit potential
  • Lost opportunity costs- a calculation rarely discussed with profound impacts on financial success or failure
    .

3.) The Real Cost of Living

  • Inflation- the increase in the prices of goods and services over time; reduces the purchasing power; increases your cost of living
  • Servicing debt- Interest expenses, principal payments, and sinking fund requirements over a specific time
  • Multiple different taxes- Earned-income taxes, state taxes, local taxes, sales taxes, property taxes, social security taxes to name a very few
  • New inventions- technological advances like Ring Doorbell, video security cameras, Fiber-optic services, vehicles, home improvements, etc
  • Wear & tear on things- planned obsolescence built into products, replacing items like cars, tires, clothes, carpet, furniture, roofs, etc
  • Unexpected support for children- financial crisis, auto repairs, 5 years of college, weddings, divorces, legal, returning home
  • Improved lifestyle- maintaining the sense of reward for hard work, better car, boat, membership, jewelry, vacation property, conveniences
  • Unexpected life events- premature death, lawsuit, disability, property damage, tax increases, assisted living, long-term care, market decline