Frequently Asked Questions (FAQ)

With complex financial account types and everyone being busy enough to miss some details through their own research, people usually have a few questions on their mind that they commonly ask.  Here are a few:

What's the difference between Qualified and Non-Qualified money?

Qualified Money is the label given to money set aside pre-taxation for Tax-deferred Retirement Programs (TDRPs) such as 401(k), 403(b), and IRA accounts.  People often choose to divert a portion of their earned income into these accounts to put off paying income taxes until they are in a lower tax bracket in retirement; at least, that's what has been promoted to them.

While deferring taxation sounds like a good option, that stance comes with some of its own problems and hoops through which a person must jump.  The main draw for diverting your earnings into this system is often the employer match that may offer an instant 100% gain as your employer matches every dollar you contribute with another dollar (1:1, or a percentage) of employer benefit into your account.  It can be very tempting to "take the free money".  The strings attached to this system are outlined in my TDRP video.

Non-Qualified Money is money that a person has already paid income taxes upon and is therefore free of any governmental restrictions, fees, penalties, and further involvement; except for sales taxes applied as you may choose to spend this money.

Don't I need money to invest to get started?

To get started you need information.  You may need to learn a skill set or augment your current skill set to better manage your cash flow and expenses to create some money.  Waiting until you have money to invest will almost always guarantee that you never will have money to invest.  Simply put, 'People who have money have planned to have money'.

What's your plan?

You need information so that you know where you want to go.  There are many choices.  When should you start?  How should you start?  What goals do you have?  What investment ideas or financial vehicles are right for you?  Having a pile of money without a plan can guarantee failure with absolute certainty.

Time is your most valuable ally on this journey.  Procrastination is your most underhanded foe.  Make a decision and get started.  Then do something everyday to take steps toward your first goal; read an article, listen to a podcast, watch a video... While you take a break from doing that, focus your thoughts on the 2nd and 3rd goals!  So, what are you going to do right now to take your first step?

Aren't 401(k) and IRA accounts the preferred retirement option?

401(k), IRA, and other Tax-Deferred Retirement Programs are the options that are most often promoted to the populous through employment, government, Wall Street, and advertising channels.  One might stop and ask "why are these promoted so heavily?"

Back in the 1970's these programs were heavily lobbied to the representatives in Congress by Wall Street.  It's certainly no mystery when you consider the results.

At the time of this writing, there are approximately 167-Million working US citizens.  Of those, approximately 40%, or 66.8-million participate in their employer-sponsored 401(k) tax-deferred retirement programs.  For each participant paycheck, whether weekly, bi-weekly, or monthly, a significant number of dollars is channeled to Wall Street into shares of mutual funds (to a large degree).  That value cannot be accessed by the account holder by law until they are age 59-1/2.

How long until you are 59-1/2?

If they access the fund early, the government levies taxes that year, which may bounce the employee into the next tax bracket, as well as levying a 10% penalty for accessing funds prior to 59-1/2.  The result?  ...More money for Wall Street and more money for government.

Wall Street stands to benefit.  The government stands to benefit.  Your broker stands to benefit.  Your employer, to a much lesser degree but still, stands to benefit.

Ask yourself "how much money is channeled to Wall Street through these programs" and you'll have a good explanation of why these programs are promoted to the working populace and why highly effective options to these programs are so rarely discussed or even mentioned by anyone selling the tax-deferred options.

Is your tax-free strategy a Roth IRA?

No, it is not.  If you already have a Roth IRA and would like to apply a risk-free strategy away from a market that has you nervous, we can help with that.  However...

Our tax-free strategy focuses on obscure areas of the tax code most often taken advantage of by corporate leaders, presidents, CEO's, entrepreneurs, and the wealthy who have a financial capacity to hire a team of attorneys, accountants, insurance, and tax specialists that find the 'juicy bits' in the 70,000 page tax code.

The good news is, if its in the tax code for them to use, its in the tax code for you to use.  You just need someone to make that information understandable, and help you to implement it.  That's the help I offer to my clients.

I listen to Dave Ramsey and/or Suze Orman, can they help me too?

I've listened to each of these financial coaches and both of them have good ideas and valuable advice for people looking to reign in out-of-balance budgets and get a handle on out-of-control debt.  To their credit, both have helped millions get out of debt.  Bear in mind, these speakers and authors make a great deal of their profits marketing to the negative-net-worth masses.  Why?  Because it's a very, very large audience!

They have good things to say in general, and while I don't have issues with their general content, each has some shortcomings once they've helped you escape oppressive debt.  For instance, Ramsey’s system does help people tunnel out of debt onto an improved financial footing, but his total disregard for the ability to use credit to leverage your financial opportunities is very shortsighted.  His outspoken disdain for assets that are not soaked with third-party-risk is another highly suspect perspective.

Keep in mind who their audience is and don't just look only at their proprietary materials for all your answers.  Get curious and look elsewhere and compare what you learn from one person to what you learn from the next.  The truth usually surfaces through a little compare and contrast effort!

I found the Google Search on "Is Dave Ramsey's advice accurate?" quite interesting.  You might do the same for Suze Orman and Robert Kiyosaki.  Each is popular and well marketed, while I'm still building a business and a following.

I take my clients beyond getting out of debt and focus on building and passing wealth over generations.  If you aren't quite ready for wealth building, you'll find the skill set to get you there in my MoneySmart Solutions book.

Isn't your level of assistance expensive?

Through my Wealth Strategy services, no; not to my clients.  My clients don't pay for my financial services.  The companies that issue the contracts to the clients pay me as an agent that:

  1. produces potential clients through personal marketing,
  2. educates potential clients as to the features, advantages, and benefits,
  3. helps the clients through the application process, and
  4. makes themselves available to coach the client as needed.

You don't get one of these accounts just because you want one!  We're not a bank... A potential client has to make an application and be approved before being issued an account.  I help clients with that process and also teach them how to take maximum advantage of the account features that they have available to them.

My MoneySmart Personal Financial Solutions, 2nd Ed. is roughly $25.00 USD plus tax and shipping.  The price of a nice lunch that can change your relationship with money forever.  No, not expensive at all.

Is it ever too late to start planning for retirement?

It's only too late to start planning to achieve the level of success that you would like.  Given that time is your most effective component of the time value of money, leaving yourself any less time than starting right now can limit your success.

A better way to phrase that idea might be, "Is it ever too early to start planning for retirement?"  The answer to that is a definitive "no".

When you are working to grow your wealth with compound interest, time is your most effective component.  Given a fixed interest rate and amount of capital, more time to allow earning interest on interest will help you earn a higher return on your money.

Planning for retirement is building your wealth so that you have both it and its annual earnings as cash flow to work with later in life.  Locking your wealth into government-sponsored tax-deferred programs that limit your liquidity and investment options has serious issues, from my perspective.  Qualified government programs are not the only answer for retirement, however, especially when safer, more liquid, less restrictive, and less expensive options exist.

Ready to find out more?

Help me understand your situation by providing some very general information.  I'll respond within 72 hours (2 to 3 days) by email or by phone and put you on track to the information that you need to get where you want to go.

The most powerful factor in the time-value of money is time.  Don't waste anymore time wondering, let's get started!