Are Fees Really the Problem?

Financial Advisor Fees

Have you been hearing about “fees” as the reason why 401(k)s and mutual funds are not performing up to expectations?  We certainly have, but the most important part of this question is actually not about the fees, but “not performing up to expectations.”  Why?  Because if our money is increasing by 20%, 15%, 10%, or even 8%, we’re happy!  Fees?  Who cares?  We’re making money!

The problem is that most of us are not making 20%, 15%, 10%, or even 8% every single year.  And fees are eating into your hard-earned savings.  There are all sorts of fees:  some are completely explained, others are not as obvious, and some are downright hidden!  The size and duration of fees should still be a concern because even 1% will have a significant effect on your long-term results.

We’re seeing a shift to “Index ETF’s” with very low fees and a reduction in “active management” of funds, thereby allowing for a lower cost.  So, fees are starting to be addressed on Wall Street.

But, having low fees will not solve our “lack of performance” problem.  The real culprit is volatility of the markets!  Your investments will suffer much more due to volatility because of the time needed to recover from losses, and then the time to make a profit again, only to lose it again during a downturn.

Where is it written in finance that you have to lose 30 or 50 or even 70 percent of your money in order to make money?  Only in the sales manuals at your investment advisor’s office.  Remember signing a risk tolerance questionnaire when you opened the account?  That protects your advisor when you lose money; it doesn’t protect you.  We will expand on this next time.

Fees are important, but a distant second place.

The Finance Fixer Team is uniquely focused on strategies to provide certainty and guarantees for your financial well-being.  Start thinking differently; get past the conventional wisdom and marketing hype!  

All whole life insurance guarantees are based on the claims-paying ability of the insurer. Excess policy loans can result in termination of a policy. A policy that lapses or is surrendered can potentially result in tax consequences. Dividends reflect profits and are not guaranteed.

What the Heck is “Core Retirement Income?”

Core Retirement Income

Millions of people put their core retirement income at risk. What’s “core retirement income”? Core retirement income is the money you need for the basic expenses necessary to live: household, meals, personal care, healthcare, transportation, and some leisure and hobbies.

It may be $35,000/yr., $120,000/yr., or $250,000/yr. Once you determine that amount, wouldn’t it be nice to have confidence that you’ve created a predictable retirement income stream, with inflation protection, tax advantages, arriving on a monthly basis, and accessible?

Let’s repeat: Millions of people put their core retirement income at risk.

They don’t set up a predictable income stream; in fact, they don’t even know the opportunity exists. Many view Social Security as a guaranteed income stream, but rarely does it cover all expenses.

Isn’t it time to start thinking about creating a core retirement income without risk?

Unfortunately, 401(k)s and IRAs are the financial vehicles most people use to save. These are cursed with fees, taxes, risk, and volatility. They will not provide you with a certain income stream.

Why? You don’t know what future tax rates will be, and you don’t know what the value of the investments will be at any given time. Remember, volatility is not your friend.

What can provide the assurance of retirement income you need? A specific type of Whole life insurance and annuities, of course. But only certain types of each. This strategy has been used successfully for over 160 years…Why haven’t you been participating?

The Finance Fixer Team is uniquely focused on strategies to provide certainty and guarantees for your financial well-being.  Start thinking differently; get past the conventional wisdom and marketing hype! 

All whole life insurance guarantees are based on the claims-paying ability of the insurer. Excess policy loans can result in termination of a policy. A policy that lapses or is surrendered can potentially result in tax consequences. Dividends reflect profits and are not guaranteed.

Everyone has 20/20 Hindsight

Everyone has 20/20 Hindsight

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

         What has your hindsight taught you about money, spending, saving, wealth accumulation, and retirement planning?

 

Your current financial status is based on the financial choices you made many years ago.  Some were good; some not so good. 

Now, with your 20/20 hindsight, what would you tell your children or grandchildren to do?

What do you wish someone had convinced you to do when you were younger? 

Would you have listened?  Probably not.  Because in general, young people:

  • Feel immortal
  • Need to experience life for themselves (don’t listen to others)
  • Believe they “have time”

Does this remind you of yourself when you were young?

If you were able to travel back in time and give yourself advice, what would that advice be?

Here is my advice to a young me:

1)  Question conventional math.

How is it possible that industry-stated returns (for example, 5%) match my expectations, but my ending dollar balance is not as expected?  Do the math.

2)  Question conventional wisdom.

The financial industry has us accustomed to accepting too much risk, has us believe mutual funds are the answer, touts 401(k)s, and has fees everywhere in their products (hidden and open).  Look for safe, secure, consistency of growth leading up to and through retirement.

3)  Question your peers’ advice.

Peers tend to hail their wins and forget their losses.  Talk to many peers and learn to separate the wheat from the chaff.  Investigate; do your homework.

4)  If your financial advisor states, “Don’t worry, you have plenty of time!” get a new advisor.

Your goal should be to find consistent, reasonable returns.  Volatility is not your friend; it destroys compounding.

5)  Don’t ignore or neglect tested, proven, and traditional financial vehicles. 

Whole Life insurance, CD’s, savings bonds, etc. have their place. New and shiny (and well-marketed) is not always a good fit.

6)  Plan for the worst; hope for the best. 

No matter what happens in life, do your best to provide a certain and secure positive financial outcome.  Life’s events will take a toll on the best of plans. Disability Income insurance, Whole Life insurance, and Long-Term Care insurance can contribute significantly to outcomes.

Stay tuned…more details will be provided in future posts.

The Finance Fixer is uniquely focused on strategies to provide certainty and guarantees for your financial well-being.  We concentrate on your personal situation to help you make the best choices for you and your family. 

If you would like to schedule a time to discuss your financial needs we ask you to please take our “2 – Minute Survey” linked below. This will allow us to understand your needs and put you on the path to Financial Success. Upon completion of the survey, our team will follow up with you to review your specific Financial Goals.

Friends and family members that you refer to The Finance Fixer will receive a free copy of Pamela Yellen’s New York Times Best-Selling Book, “The Bank on Yourself Revolution” and her CD titled “How to Grow and Protect Your Wealth.”

All whole life insurance guarantees are based on the claims-paying ability of the insurer. Excess policy loans can result in termination of a policy. A policy that lapses or is surrendered can potentially result in tax consequences. Dividends reflect profits and are not guaranteed.

See The Top 5 Whole Life Policy Advantages

5 of our top advantages that High Cash Value, Dividend-Paying Whole Life Policies can provide.

There is a chance that you might have heard the old joke where a man hears a knock on the door. He goes to the door to find a man with an IRS badge held out in his hand, and a smile on his face.

The homeowner says, “Hello, how can I help you?” filled with dread as to what his visitor could possibly say next.

The visitor says, “Hello good sir! I’m an agent from the IRS, and I am here to help you with your tax and finance situation.”

You may have had a good laugh at that little joke, but the reality is that there are some instances in which the IRS is, in fact, trying to help you with your current financial situation

Keep in mind, I am not a certified public accountant and don’t pretend to be one in public or on the internet, but there are five ways that a High Cash Value, Dividend-Paying Whole Life Policy and The Finance Fixer can help you potentially save thousands, tens of thousands or even hundreds of thousands of dollars over the course of your life.

Here are 5 of our top advantages that High Cash Value, Dividend-Paying Whole Life Policies can provide.

1) Retirement Savings Withdrawals that Are Tax-Free

The tax rates are going up over time, which is why you may be better off paying your taxes up front, while you know what the rate is. This will allow you to keep more in the long run, and will help you save a lot of money on your taxes.

2) Cut the Taxes that You will Pay on SS Benefits

This can be misleading. Don’t think that just because you have your own 401(K) or IRA that the government can’t get your money. What you take in from the High Cash Value, Dividend-Paying Whole Life Policy will not be included in what the IRS includes in how much your social security is going to be taxed.

3) Get More Federal Student Financial Aid

The money in your High Cash Value, Dividend-Paying Whole Life Policy will not count against you when your kids are applying for aid from the government. This may qualify them for more federal financial aid.

4) Business Expenses

When you finance expenses for your business through your High Cash Value, Dividend-Paying Whole Life policy, this is a great way to some tax deductions for depreciation and interest.

5) The Death Benefit

The death benefit of this type of account gives you the ability to increase the value of your account exponentially, and gives you the ability to leave your loved ones income that is tax free.

Thank you for being a member of The Finance Fixer Community

All whole life insurance guarantees are based on the claims-paying ability of the insurer. Excess policy loans can result in termination of a policy. A policy that lapses or is surrendered can potentially result in tax consequences. Dividends reflect profits and are not guaranteed.