Live Abundant Radio with Doug Andrew

A Time For Reflection Reflecting about what lies ahead is common for this time of year. We all hope for good news but need to remember that the final choice of whether we whether we take it as good or bad is usually up to us. Many of the greatest teachers, coaches and mentors teach their students to be proactive rather than simply reactive. By doing do, they learn how to turn any kind of news to their advantage. Sometimes, the good news we receive is first preceded by not so good news. For example, it's good news when a stoplight is finally put in at a busy intersection. Of course the bad news may be that the reason that it was put in was because of something bad that happened there. Good news can affect us financially, physically or even in other ways where we learn how to prepare ourselves to avoid the negative effects of bad news when it happens. So what do you see in the days ahead? Could there be another financial crisis like we saw in 2007-2008? Yes or no? Whenever Doug asks this question, roughly 98 percent of the audience he's asking answer in the affirmative. Now that's a pretty clear majority. Often, Doug will next ask his audience if they lost significant value in assets such as their IRAs or 401(k)s or in real estate or their homes during those years. Obviously, a majority of people did. Next, he asks them if they wish to see the kind of losses they saw nearly a decade ago. Their answer is always a clear and resounding “no!” The next question is about what they are planning to do to ensure that they won't experience the same result as before. It's a matter of when and not if there will be another financial crisis. The same factors that set in motion the last crisis are happening again and our government continues printing money like crazy. Enormous spending deficits are still there and the markets are becoming volatile once again. The chances are strong that we're going to see the market take another 40 percent nose dive of up in the near future. So, here's a serious question for anyone who was affected by the last downturn. Why would you continue to use a strategy that hasn't worked in the past? Remember, between 2001-2003, the market dropped 40% and it was four years before people could make back what they had lost. In 2008, it happened once again and required another 3-4 years for most of them just to break even. These downturns were a serious challenge for those who had been saving for retirement. If you were one of them, what are you doing different to ensure that it never happens to you again? Could another downturn actually work to your advantage? Now is a perfect time to learn how to protect yourself in ways that turns bad news into good news? Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

What We Should Expect As we process the reality of Donald Trump's unexpected election victory, keep in mind that a number of economists had predicted a double-dip recession during the next presidential term. Ian Shepherdson who is a economist at research firm Pantheon Research Economics said that now this shock has arrived in the form of Mr. Trump as president-elect, a lot of economists are scrambling to react. He states that the uncertainty that has dogged the U.S. economy in the run up to the election could continue and possibly deepen. This means that a pullback in spending by wealthy households and businesses could halt the economy in its tracks. Could that be enough to trigger a brief recession? Possibly. Doug's take is that the pollsters got it wrong because they were asking the wrong questions. Instead of asking if people were supporting Donald Trump, they might instead have asked whether the people who voted for him were actually voting against the direction this country has been going. President Obama succeeded in flipping the amount of taxpayers and tax consumers from 45% of of people receiving taxpayer-provided benefits and 55% paying taxes to the other way around. It's clear that many Americans were tiring of this trend and wanted their fellow Americans to get back to work again and become self-reliant. The takeaway is this, we are going to continue to have market uncertainty. This would have been the case had Hillary Clinton won as well. Some people on the right feel like we got out of the path of a destructive tornado but that doesn't mean that other storms won't continue to brew out there. What each of us needs right now, more than anything, is clarity regarding what to do. What we're facing could be very similar to what President Reagan faced in 1980 when the economy was struggling. Sometimes the good news follows bad news. Reagan believe that the way to raise tax revenue was to increase the actual revenue by lowering taxes. Of course, his Democratic counterparts disagreed, thinking that the way to raise revenue was by raising taxes. Trump appears to follow Reagan's thinking on taxes and wage issues. As an entrepreneur, he likely has a better feel for basic economics. The thing to remember is that continued market uncertainty and volatility doesn't have to derail your plans for a brighter future. No matter which way the pendulum is swinging, you can and should learn how to take effective steps to protect your retirement savings. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Is It Really Bad News? This is the time of year that we reflect on what lies ahead. We hope that it will be good news but should remember that whether we take it as good or bad is usually up to us. The world's greatest mentors excel at teaching their students how to turn any kind of news to their advantage by being proactive instead of reactive. Often, good news is preceded by bad news. For example, when a stoplight is finally put in at an intersection, that's good news. The reason that it was put in usually corresponds with some bad news that happened there. This kind of good news can come to us financially, physically or in other ways that teach us how to prepare ourselves to not be affected negatively by bad news when it happens. Do you think there is going to be another financial crisis like we saw in 2007-2008? Yes or no? Roughly 98 percent of the people of whom Doug asks that question answer in the affirmative. That's a large majority. Doug will then ask them if they lost money or value in their assets such as IRAs or 401(k)s or in real estate or their homes during that time frame. Of course, the majority of people did. The next question he asks is whether they want to see the same thing happen next time as what they saw last time. The answer is always a resounding “no!” since they don't want to see the kind of losses they saw nearly a decade ago. Don't Make the Same Mistakes Doug then asks them what they are planning to do to make sure that they are not going to have the same result as before. It's not a matter of if there will be another financial crisis, it's a matter of when. All of the same things that set up the last crisis are happening again and government is printing money like crazy. The tremendous deficits are still there and the markets are becoming volatile again. It's highly likely that we'll see the market take another nose dive of up to 40 percent again. One more question, why do you keep using a strategy that you know isn't going to work, because it hasn't worked in the past? In 2001-2003, the market dropped 40% and it took four more years to make back what people had lost. Then in 2008, it happened again and it took another 3-4 years to come back to break even. That took an awful toll on people who had been saving for retirement. What are you doing to make certain that it never happens to you again? What if you could actually take advantage of a downturn? Would you be willing to learn how to protect yourself in a way that turns bad news into good news? Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Clarity Empowers Are you concerned about what will happen to this great country of America and her economy? Do you worry about what will happen, no matter who is attempting to run the country? First of all, you're not alone. Many people feel powerless and confused about what they can do. Nothing snaps us out of our sense of paralysis and into action like having clarity. It is becoming active that keeps us from merely being reactive to what's going on around us. This should be of special importance to anyone who pays taxes. For instance, in the past 8 years, we went from 45 percent of Americans being tax consumers and 55 percent of Americans taxpayers to exactly the opposite. This means that, for the foreseeable future, there will be more voters electing candidates who will continue to spend without slowing. Remember, the federal government collects $3.1 trillion in taxes every year which is about what they own in interest on the national debt and Social Security and Medicare benefits each year. This means that 100 percent of what the collect is spent before they collect it. The $1 trillion it takes to run the government is 100% newly borrowed debt. The federal government collects taxes, primarily personal income tax, FICA, Social Security and Medicare and corporate income tax. Why Taxes Keep Rising We have 41 out of 50 states with a state income tax and, on top of that, they also collect property and sales taxes. This amounts to about $2.9 trillion that the states collect. If you add that to what the federal government collects, it comes out to $6 trillion. America's Gross Domestic Product or GDP is $17 trillion. That means that a third of our economy goes out in the form of taxes. What most people don't understand is that the government comes up with these slick ways to get other revenue from the middle class and the poor. One of the biggest ways is the $70 billion lottery system. It's a tax that most people don't realize is a tax. The bottom line is that as our government continues to spend unabated and continues to print money at an increasing rate, it's going to be looking for ways to raise more revenue. This should have special significance to all taxpayers. If you haven't figured it out yet, they'll be looking at those who are perceived to have money, especially those who have saved for retirement in order to provide benefits for those who have not. If you're not taking action to protect yourself from rising taxes, you're likely to get fleeced. Knowing your options empowers you to protect yourself and those you care about from the negative impact of higher taxes, rising inflation and market volatility. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

What's Making Us Nervous Right now, a lot of people are concerned about where America is headed. They have serious questions about how the election will turn out as well as the economy and what lies ahead. Many are experiencing considerable confusion as to what they should do. Let's face it, the kind of decisions we're currently facing are nothing we've ever dreamed of. Deciding which way to go can be a daunting task. We've allowed ourselves to be painted into a corner through a combination of government spending and nonstop printing of money to cover the deficit. Our national debt has doubled over the past 8 years. To understand what that means, just imagine if every American taxpayer had to write a check to cover their fair share of the national debt. We'd all be on the hook for just under $200,000 each. If this realization leaves you feeling powerless and wondering what can be done, just remember that we cannot sit back, paralyzed, and watch things get worse. We have to take action. It's not unlike a frog in a pot of water that's heating on the stove. Gradually, the frogs become accustomed to the temperature increase until eventually the water boils. Like frogs in a pay, we're being slowly but surely cooked. Don't Wait Too Long to Act The government keeps turning up the heat on us through increasing taxation and greater regulation. We simply cannot allow ourselves to become paralyzed or to procrastinate taking action. This could mean jumping out of traditional tax-deferred vehicles like IRAs and 401(k)s before we find ourselves in a situation where escape is no longer an option. There's nearly $23 trillion saved up in IRAs and 401(k)s. And it's no secret that our national government is eye-balling those funds, intent of taxing them to raise revenue in order to pay interest on the national debt. Rising taxes could make a dramatic difference in whether the folks to whom that money belongs will have enough to see them safely through the golden years. In reality, folks may find themselves paying higher taxes at retirement than they were during their earning years. At retirement, their deductions have usually disappeared. Also, tax rates aren't likely to be going down. The folks who can safely jump out of the pot before the water boils shouldn't have to suffer or worry about outliving their money. They'd be better off considering tax-free methods of accumulating their money than using tax-deferred vehicles. Many of these tax-free alternatives have been around for more than a century. An active approach to getting out of the pot before it's too late isn't simple pessimism. It's decisive action that is based in realism. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Hard Truth or Gentle Deceptions? When Doug speaks at various educational events around the country, he'll often ask his audience whether they’d prefer that someone be completely honest or just be gentle with them. Nearly all audience members, after taking a minute to think it over, say they'd take honesty over the alternative. This can have far-reaching implications in many areas of our lives. For instance, there are many financial advisers who tend to give advice and analysis based on three things: The first one is data. They'll gather data and then explain what you’re supposed to do with your money. The second one is information. They utilize whatever information they have at hand at that moment, typically gleaned from tests, results or tax returns. The final one is knowledge. This relates to what they know at the time they are certified in their specialty. The wrinkle here is that data, information and knowledge all have a tendency to become obsolete and outdated. They become myths that people often continue to follow myths when what they really need is wisdom. Swapping Myths for Wisdom There are a number of persistent myths that we might encounter regarding real estate and retirement planning. For example, one of them holds that it’s better to pay off your mortgage by sending extra principal payments to the mortgage company. Another myth is that rental property is a terrific retirement plan. Some of these myths become so broadly accepted that they become as dangerous as an outright lie. This includes the myth that the safest place for money, during hard economic times, is either in real estate or in the bank. In reality, there were many banks that closed their doors during the Great Depression but not a single reserve insurance company did. This is because reserve insurance companies typically have far stronger guidelines than even the banks. Another popular myth is that people become rich by saving their money in tax-deferred IRAs and 401(k)s. Truth be told, more people become wealthy through upping their level of productivity and by being entrepreneurial. There one final myth you should also steer clear of. It's the myth of being in a lower tax bracket at retirement. Actually, many people’s deductions have disappeared at retirement. Because of this, they may end up paying more in taxes at a time when their income is lower. The antidote to the danger posed by these myths is found in seeking wisdom that stands the test of time. This requires us to be willing to search for it, learn it and apply it. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Which Way To Go? Are you concerned about America? About its economy and what may lie ahead no matter how the election turns out? Many people are feeling somewhat confused as to what to do. Few of us could have dreamed about the kind of decisions we're currently facing. It can be difficult in deciding which way to go. We've painted ourselves into a corner of sorts through a combination of government spending and the printing of money to cover the deficit. The national debt has doubled in the past 8 years and now if every American taxpayer had to write a check to cover their fair share of the national debt, we'd all have to cough up just under $200,000 a piece. How did we get here? If you're feeling powerless and are wondering what you can do, you cannot sit back, paralyzed, and watch things get worse. You have to take action. Frogs In a Pot We're like a frog in a pot of water that's heating on the stove. Over time, the frogs become acclimated to the gradual temperature increase until they eventually end up being boiled. We're not so different from those frogs in how we're being slowly cooked. The heat is constantly being turned up on us through increasing taxation and more government regulation. The key here is to not allow ourselves to become paralyzed or to procrastinate. If we don't jump out of traditional tax-deferred vehicles like IRAs and 401(k)s, we may find ourselves in a situation we can no longer escape. With roughly $23 trillion saved up in IRAs and 401(k)s, there's no question that our national government is eyeing those funds with the intent of taxing them to raise revenue to pay interest on the national debt. Those rising taxes will make a drastic difference in whether the folks to whom those accounts belong to will have enough money to see them safely through their golden years. Many folks could find themselves paying higher taxes at retirement than they were paying during their earning years. Their deductions are generally gone and the rates aren't going back down. You don't have to suffer or worry about outliving your money if you can safely jump from the pot before the water boils. Instead of accumulating their money in tax-deferred vehicles, they'd be wise to consider tax-free alternatives that have been around for more than a century. This approach to getting out of the pot is based in realism as opposed to pessimism. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

The Power of Honesty If someone were to offer you advice, would you prefer that they be completely honest or that they be gentle with you? This is a question that Doug often asks the audiences to which he speaks. After a few moments of reflection, most people express an overwhelming preference for honesty. This is a great basis for all advice. A lot of financial advisers have a tendency to analyze and give advice based on date, information and knowledge: They gather data and recite what you’re supposed to do with your money, health or whatever. This means the information they have at hand at that moment whether from tests, results or tax returns. Knowledge is what they know when receiving certification in their specialty. The downside with data, information and knowledge it that all of them can all become obsolete and outdated. What stands the test of time is wisdom. This is what helps us distinguish between myths and reality. Common Myths There are a number of popular myths regarding real estate and retirement planning. For instance, one myth purports that it’s better to pay off your mortgage by sending extra principal payments to the mortgage company. Another myth holds that rental property is a great way to prepare for retirement. Some financial planning myths become so widely accepted that they are as dangerous as an outright lie. They would include the myth that money is safest either in real estate or in banks during hard economic times. In reality, reserve insurance companies that have much stronger guidelines than even banks. Numerous banks closed their doors during the Great Depression but not one reserve insurance company did. Another myth is that people became rich by saving their money in tax-deferred IRAs and 401(k)s. The truth is that more people get wealthy by being entrepreneurial and increasing their level of productivity. Another myth that can cost people dearly is the myth of being in a lower tax bracket at retirement. Actually, most people’s deductions are gone by the time they reach retirement. Between their loss of deductions and rising taxes, they can end up paying more in taxes even when their income is lower. The risk posed by these myths is best countered by wisdom. Before we can apply it, we have to first seek for it. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

How Do You Rate? Many of us are suckers for those little quizzes we run across where we score ourselves relative to our health or knowledge or other topics. Here's a little quiz where can score how savvy you are about money. You'll score yourself on a scale of 1-4 with 1 being poor, 2 being good, 3 being better and 4 being best. A prudent investment has 3 key elements. Liquidity, safety and rate of return. The first question has to do with liquidity or your ability to access your money when you need it. Think about where you have most of your savings that you've set aside for the future. Can you access that money without triggering penalties or taxes? If your money is tied up in your house, an IRA or 401(k) or in a CD. You can only score yourself a 1. If you can access your money but it is at a cost such as a tax or some type of penalty, score yourself a 2. If you have predictable cash flow but no access to lump sums, like in the event of an emergency, you could score yourself as high as a 3. If you have tremendous liquidity where you can access your money with an electronic funds transfer or a phone call without triggering taxes or penalties, including access to lump sums, score yourself a 4. The next question regards the safety of your principal. If your money is exposed to the risks of market volatility, give yourself a 1. If you're safe from volatility but you're diversified with some high risk and some low risk investments, you'd qualify for a 2. If your money is somewhat safe but has a very low yield or rate of return, maybe it's earning just 2 or 3 percent, you can give yourself a 3. If you have very low risk, your money is protected from market volatility, it's protected from inflation because it's linked to things that inflate, you can give yourself a 4. This is the best possible position to be in because when the market goes down, you don't lose any money. Yet, when the market goes up, you get to participate in that growth. The final principle is rate of return. If you're earning a negative interest rate up to a 2% return, score yourself a 1. A 2-4 percent rate of return, which is the standard payout recommended by most financial services, score yourself a 2. If you're earning 5-12 percent rates of return but they are taxable such as in a 401(k) or IRA, give yourself a 3. If you're earning a 7-10% rate of return and it's totally tax-free and it stays tax-free when you access it and you have predictable income that doesn't deplete your principal, you can give yourself a 4. There's much more to this but the point is to illustrate that there are better ways to save for your future. If you're not willing to settle for less, consider learning about them. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Choosing Between Truth or Comfort A question that Doug often poses to his audience is whether they’d rather be on the receiving end of complete honesty or if they'd prefer he simply be gentle with them. Most people, after a moment of contemplation, will express a preference for straight up honesty. Even so, our preference for honesty doesn't always translate into the best advice. For instance, many financial advisers analyze and give advice based on three things: Data – This means that they collect data and then recite what you’re supposed to do with your money. Information – This refers to whatever information they have at hand at that moment whether it be from tests, results or examining the person's tax returns. Knowledge – This simply refers to what they know at the time they received their certification in their chosen specialty. Myths tend to arise when data, information and knowledge become obsolete and outdated. The problem is that people continue to follow the myths when they really need wisdom that doesn't become outdated. Sorting Truth From Fiction It's not uncommon to encounter several persistent myths pertaining to real estate and retirement planning. One myth purports that you're better served paying off a mortgage by sending extra principal payments to your mortgage company. Another myth is that rental property is a great retirement plan. Some of these myths become so accepted that they end up as dangerous as an outright lie. This includes the myth that you're safest by keeping your money in real estate or in the bank during hard economic times. The reality is that there are reserve insurance companies that have far stronger guidelines than the banks. Remember that many banks ended up closing their doors during the Great Depression but not a single reserve insurance company did. Another myth is that people become wealthy by putting money into tax-deferred IRAs and 401(k)s. Actually, more people get rich by being entrepreneurial and increasing their level of productivity. Another myth that can cost people dearly is the myth of them being in a lower tax bracket at retirement. The truth is that most people’s deductions have disappeared by the time they reach retirement. Because of this, they may end up paying higher taxes even though their income is lower. The antidote to the danger posed by these myths is good old fashioned wisdom. To put wisdom to use requires that we be willing to honestly seek it and apply it. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Financial Planning Vehicles Over the past four and a half decades, Doug's clients have often asked him about what he looks for in a financial planning vehicle in which they'll be placing their serious cash. Serious cash refers to the money they're not willing to jeopardize that's being set aside for future use. It's been earmarked for very serious goals like retirement or other long-term future goals. The four features Doug looks for include the following: * Liquidity—this means the ability to access their money when they need it with a simple electronic funds transfer or a phone call. Take care not to confuse liquidity with mere convenience. * Safety—this simply means that whatever they've set aside for the future is protected from loss. It also means that any year they make money, it becomes newly protected principal. * Predictable rates of return—efficiency expert Dr. Edward Deming has pointed out that the key to successful management of anything in life is predictability. This doesn't mean pie-in-the-sky rates of return, it means stability and predictable growth despite the market's ups and downs. * Tax-advantaged—this refers to savings vehicles where their money can accumulate tax-free rather than tax-deferred. Tax-deferred savings are subject to whatever future tax rate may be and the harsh reality is that almost no one ends up in a lower tax bracket at retirement. These features strike some folks as too good to be true. They don't understand that these tax-free provisions have been part of the Internal Revenue Code for over 100 years. Just because the crowd chooses to ride the stock market roller-coaster and sock away their serious money in IRAs or 401(k)s doesn't mean that better vehicles don't exist. It simply means that not enough people have yet learned and implemented the strategies that give you the four essential features listed above. There's a world of difference between a vehicle that offers liquidity, safety of principal, predictable rates of return and tax-advantaged rather than tax-deferred status for your serious money. Understanding that difference is what will likely separate those who may end up outliving their retirement savings from those who will not. It's a difference worth knowing. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Why We Follow Myths Given the choice between someone be completely honest or simply being gentle with, most of us would acknowledge that honesty would be more useful.. Honesty helps us see things more clearly. Still, many financial advisers pefer to analyze and give advice based on data, information and knowledge: This means that they'll collect data and tell us what we're supposed to do with our money, health or whatever. Information represents what they have at hand at that moment from tests, results or tax returns. Knowledge boils down to what they learned when they received their certification in their specialty. All three can all become obsolete and outdated. If we keep applying outdated or bad data, information or knowledge, we're simply following myths. Some Myths Can Hurt Us A number of myths persist regarding real estate and retirement planning. These can hit us where it hurts financially. One myth teaches that it’s preferable to pay off a mortgage by sending extra principal payments to your mortgage company. Another one maintains that rental property is a great retirement strategy. Over time, these myths are so widely accepted that they are as dangerous as an outright lie. Another myth holds that money kept in real estate or in banks is in the safest place during volatile economic times. In reality, there are reserve insurance companies that have far stronger guidance than even banks. Remember that a lot banks failed during the Great Depression but not a single reserve insurance company did. Another costly myth is the one that purports that people get rich by putting money into tax-deferred IRAs and 401(k)s. The truth is that more people get wealthy by being entrepreneurial and increasing their productivity. Finally, the ongoing myth that you'll be in a lower tax bracket at retirement can also end up costing people dearly. The problem is that most people’s deductions have disappeared by the time retirement. This means that they may end up paying more in taxes even though their income is lower. The financial danger posed by these myths can be addressed through the antidote of wisdom. Putting this antidote to work starts with honestly searching it out and applying it. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Who Really Owns Your Home? Many Americans try to achieve financial independence but they do it in such a way that it's like they're trying to drive down the freeway with one foot firmly pressing on the brake pedal. The worst part is that most of them aren't even aware that they're doing it. What's slowing them down is how they're going about saving for the future. They are putting their money into tax-deferred retirement accounts like IRAs and 401(k)s or keeping it in real estate. The rude awakening they'll likely face comes when they're not in a lower tax bracket at retirement like they had anticipated. Many will work to get out of debt by sending extra principal payments to their mortgage company but there are better ways to get out of debt more quickly than this. A recent article by Peter Sisco from Resilient Personal Freedom Inc., points out that even people who think they own their home free and clear really don't own it at all. Instead, they lease it from the state in which they live. It's the state that sets the terms that let you keep your home or sell it to another person who will lease it from the state. The state owns the house and land in perpetuity since you cannot pay off your property tax bill. You can't add onto the house without permission. You can't subdivide without permission. How To Take Ownership What this means, depending upon your tax jurisdiction, is that when you die, the state may actually claim a large portion of the value of your home and your heirs may be forced to sell the home to pay the inheritance taxes. If this happens, the state then resets the clock with a new tenant. Remember, throughout the life of the home, the state contributes nothing to the upkeep or the costs of complying with its regulations. Sisco points out that claiming to be an owner under these terms and conditions begs the definition of what ownership means. The point here is that Doug has helped many people get their homes paid off through equity management strategies he teaches in his seminars. There are smarter ways that don't require sending extra principal payments to your mortgage company. They enable you to keep that money working for you and compounding tax-free to where you can pay off that home even earlier, if you wish. The funds also remain liquid meaning they're available if you need them. Ideally, you should be enjoying liquidity, safety of principal, a predictable rate of return and tax-free growth. There's no time like the present to learn how. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

No Such Thing as 'Free' It's very intriguing to listen to the various politicians as they appeal to their intended audiences regarding various concerns. Oftentimes, their solutions are actually just thinly disguised agendas. A good example of this is the prospect of so-called “free” college for all. Recently, Julia Freeland Fisher wrote an opinion piece for CNN about the high cost of free college. She noted how, over the course of Hillary Clinton's campaign, a bevy of ideas have been floated regarding improving higher education in America. One idea that has really struck a chord is the prospect of eliminating tuition at state colleges and universities for families making less than $125,000 per year. It sounds wonderful on the surface, and young people have been quick to jump on the bandwagon without considering what the hidden agenda might be. The biggest problem with this solution is that it focuses reform on the wrong side of the affordability equation. Free college may allow more students to afford college but it does nothing to make higher education more affordable. That's a very important distinction to understand. Examining Root Causes Rather than ratcheting up aid to meet ever-increasing price tags, we'd be better off addressing the root causes by examining the higher education business model. When we do this, we discover a stockpile of embedded inefficiencies and warped incentives. According to Fisher, the biggest problem is that higher education institutions pursue three distinct and incongruous business models that cause a surge in overhead and direct labor costs. The higher costs are inevitably passed along to the students without actually increasing the value of their degrees. We tend to tolerate these broken business models in spite of the fact that while higher education costs are going up, across the board, employers are increasingly frustrated with what colleges and universities are producing. Even though 96 percent of chief academic officers believe they're doing a good job of preparing students for employment, only 11 percent of business leaders agree that graduates have the necessary skills for success. Subsidizing tuition isn't going to solve that problem. There are also hidden agendas found within the financial services industry. The solution in all areas of life begins with taking ownership of our own future. This means learning to distinguish between truth and error and to apply newly acquired wisdom in our own lives. This will help secure a brighter future, not only for us, but also for our children and grandchildren. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

Shall I Be Honest or Gentle? Doug often asks the audiences to which he speaks whether they'd prefer that someone be completely honest or be gentle with them. To their credit, nearly all of them prefer honesty, after giving it a few moments of thought. Many financial advisers tend to analyze and give advice based on three things: Data – They gather data and recite what you're supposed to do with your money, health or whatever. Information – This means the information they have at hand at that moment whether from tests, results or tax returns. Knowledge – This is what they know when they receive their certification in their specialty. The problem is that data, information and knowledge can all become obsolete and outdated. People often continue to follow myths when they really need wisdom. Putting the Myths To Rest There are persistent myths you may encounter regarding real estate and retirement planning. One of them purports that it's best to pay off a mortgage by sending extra principal payments to your mortgage company. Another one is that rental property is a great retirement plan. Some myths become so widely accepted that they are as dangerous as an outright lie. This includes the myth that money in real estate or in banks is in the safest place during hard economic times. The truth is, there are reserve insurance companies that have far stronger guidelines than the banks. Many banks closed their doors during the Great Depression but not a single reserve insurance company did. Another myth is that people got rich by putting money into tax-deferred IRAs and 401(k)s. Actually, more people get wealthy by being entrepreneurial and upping their level of productivity. Pursuing the myth of being in a lower tax bracket at retirement can also cost people dearly. In reality, most people's deductions have gone away at retirement. This means that they can end up paying more in taxes even when their income is lower. Wisdom is the antidote to the danger posed by these myths. That means we must be willing to honestly search it out and apply it. Start by visiting with a wealth architect today. *Life insurance policies are not investments and, accordingly, should not be purchased as an investment.