Let's talk about the traditional personal finance model today.
When we think about money… finance… investing… typically it’s all about retirement, right?
Retirement is sold as this magical period where we don’t have to work anymore. Suddenly we will be free to do whatever we want to do, whenever we want to do it.
But look at how we are told to plan for retirement…
The conventional wisdom tells us to save a small portion of our income throughout our working years and lock it away in “qualified” retirement plans.
For wage earners, these are 401(k)s and IRA’s. The idea is that we need to get to a certain “number” that we can live on in retirement.
Maybe it’s $1 million. Maybe it’s $5 million… Whatever it is, the thinking is flawed. For a few reasons.
First off, the “number” we reach isn’t our actual number. At least not with 401(k)’s and IRAs.
Instead, we will be required to pay ordinary income taxes on every withdrawal we ever make from these accounts.
Now, if our only source of income in retirement is Social Security then we won’t have to worry about this very much. We’ve only got one source of income, and it’s tiny. So we won’t pay much in taxes.
On the other hand, if we do have other income sources in retirement, our ordinary tax rate could be 20%, 30%, or even higher.
And that means we don’t have that $1 million or $5 million… or whatever we saved. Because a chunk of it is going to be taxed away from us.
And that brings us to another major fallacy with this kind of retirement planning...
The whole idea that we spend our life working to accumulate capital, only to consume that capital over our life time is both foolish and destructive. That’s my view.
Instead, the capital we accumulate should work for us. It should throw off income for us so that we never have to deplete it. We can live on the income and keep the principal intact.
And that’s why I think we should focus on building cash flow.
In fact, look at what we’re doing with the traditional model. We build up this nest egg – $1 million… $5 million… whatever it is. Then we sell the assets to give us money to live on after we retire.
Think about that.
What this means is that we are really just taking a round-about way to creating income for ourselves in retirement.
So we pour a bunch of money into our retirement accounts for thirty years… then we liquidate them so we have money to spend when we retire.
This forces us to pay a bunch of taxes. And now we don’t have the asset base anymore either. It’s not part of our estate plan. We’re not passing down much to the next generation.
Do you see where I’m going with this?
If our goal is simply to create income for ourselves in retirement – why not just build income in the first place?
Why not just buy assets that throw off income right away?
With the right system in place, I'm confident that anyone can work up to $10,000 or more in extra income each month in a relatively short period of time. That’s done by acquiring assets that throw off income.
Then think about this...
The income comes from owning the asset – not selling it. We get the income as long as we have the asset.
And then when our day comes, we can pass the asset down to our heirs.
So with the traditional approach – it’s a choice between income and assets. With a cash flow model, we get both. And then we pass them both down to our kids.
It’s a no brainer right? Why would we do it any other way?
And that brings us to the big question... what's the right system for going about this?
Our team is hard at work on a new course that will help you implement a step-by-step program for building monthly cash flow.
We've got the foundation for the new program in place... Now it's a matter of optimizing it. We want to make sure that we cover as many challenges and concerns as we can.
And we would like your help with this.
When it comes to retirement, what's YOUR single biggest challenge right now?
Click here now to let me know your feedback.
And please be as detailed and specific as possible.
Your advice on this would mean the world to me and really help us finalize the new program.
We are looking forward to hearing from you!
-Joe
P.S. We really need your advice on this.
When it comes to retirement, what's YOUR single biggest challenge right now?
(Please be as detailed and specific as possible).