The true purpose of money is to acquire assets.
That’s the key lesson in the classic board game Monopoly. If we acquire assets, we will always have the financial means to take care of ourselves and our families. That’s even if our active income were to go away.
If we accept this statement as true, the only remaining question becomes: what assets should we acquire?
Our core focus in these pages is how to get our personal finances right given the shifting macroeconomic climate we find ourselves in. My belief is that simply funneling a little money into 401k funds won’t cut it anymore.
So what’s the solution? Here we run into the information problem.
It’s funny… it used to be that a lack of information was one of our biggest challenges. Before the internet, finding information was much more difficult and time-consuming.
Today we have the opposite problem. We are inundated with incredible amounts of information all day, every day.
And if we go online and search for investment ideas and strategies, we are going to find an avalanche of what I call piecemeal investment advice.
There are plenty of services that focus on buying stocks or bonds in a particular sector or market. There are also scores of trading systems out there. They all promise to help us line our pockets with big gains.
To be sure, some of these services are decent. But none of them provide a comprehensive approach to finance.
They don’t provide an integrated system for becoming financially independent. Nor do they help us implement a complimentary tax strategy to maximize our investment returns. Most of the time they’ll keep mum on the tax issue for liability purposes.
I spent the first ten years of my professional life chasing these kind of piecemeal investments.
I would stumble upon a few stock ideas that I liked, so I would buy them. Then I would hear about a great set-up in the corporate bond space, so I would buy it. Then I would learn about a new approach to trading options, so I would try it out.
As a result, I was always bouncing from one thing to another. There was no structure or system to it. And taxes were an afterthought. When it came time to file my tax return, I just hoped for the best.
And I made all the common mistakes along the way.
I’ve poured too much money into short-term speculations that went nowhere. I’ve watched one of my stocks go from $7 a share to $80 a share… only to ride the elevator all the way back down to $10 per share. That wiped out nearly all my gains.
And because I didn’t have a tax strategy in place, one year I found myself having to dip into my individual retirement account (IRA) early. I took out a sizeable withdrawal to cover myself. Then the Internal Revenue Service (IRS) hit me with a 10 percent early withdrawal fee for my efforts.
I had to pay income taxes and a big penalty on the money I took out. You just can’t get financially independent by making mistakes like that.
As a result, I spent nearly ten years in corporate banking for my first career… and I walked away with almost nothing to show for it.
That’s because I squandered my savings on short-term speculations and piecemeal investments. Sure, I made a little money on some ideas. But that was often offset by losing money in other areas.
Needless to say, I didn’t start to see any real financial results until I wised up and developed a comprehensive investment strategy. Once I got my system in place, the rest was history. Results came far faster than I ever thought possible.
And here’s the thing – nothing about it is overly difficult or complex. I’ll share with you my system and how to implement it tomorrow.
-Joe Withrow
P.S. Don’t forget that we’ll be opening the doors of our investment membership The Phoenician League very soon. This will be just the third time we’ve accepted new members since we launched last year.
If you’re interested to learn more about what we’re doing, you can do so right here: The Phoenician League Waiting List