Developing a Financial Strategy Part 1

Here is a key thought to consider about financial planning. Wealthy people tend to make fast decisions and are also slow to change. That is if it is a good plan, better than they have, they change. If it is working and there is nothing better, they stay the course. In contrast, people who have a poor mentality tend to make slow decisions and are also quick to change usually to the wrong thing.

In the same thinking, people who are more wealth minded are concerned with market fluctuations, portfolio loss, and inflation! Market risk and volatility, medical expenses, and taxes ruin many lives financially. At the same time, those who are conceded about their retirement and future are thinking, will I have enough money? Such as, will I outlive my money? Or will I die too soon and leave my family destitute

Yet, there are tools you can implement to prevent such losses.

The big financial concerns people are facing now:

People are concerned with not having enough money for medical expenses, especially in retirement. I have been told by many people over the years and have seen it happen far too much. Will I get ill and spend all I have on hospital bills and have nothing to live on? Yes, if you do not have a good plan.

Another concern, first world problems you know, capital gains will be adversely affected with the Biden tax plan. Because most people, rich and poor, have most of their money in variable accounts and have suffered greatly from the market downturns.

Many people have had bad experiences with bad annuities and CDs only paying 1%. Yet, an annuity is a contract with a financial institution and yes, many of them have been written for the benefit of the company, not the client. However, there are now better contracts with low to no fees and high gains. We can show these to you along with other options.

Taxes will go up, be prepared! Taxes in 2022 are 20-37% what will happen in the next 5 years after the Trumps era tax cuts expire and the Biden tax plan goes into effect? Consider this; the stimulus money overwhelmed the national debt. Thus, the low-end tax rates will go up to 25-35%+, the middle tax rates will be in the 60% range, and the high end is 88%, which happened after WWII, so we need to prepare.

Current savings interest rates are down, people are buying houses, while housing prices are going up. That causes CDs and Bonds to go down. Now the Fed interest rates are going up rapidly making money scarce and can cause even more businesses to go bust. And now we are in the same situation as we were in 2007 with housing and 1920, 1945 and 1979 with inflation!

Solutions to market risks.

The rate of return is no longer the main concern; it is holding what you have without loss.

What is even more important is diversification, being protected. Banks are not where you make money, such as CDs with less than 1% whereas other financial institutions and a few insurance companies are giving 4-12% returns without incurring any loss. Now clients with some proper setups can be fully protected with no worries about market fluctuations.

How can Insurance help? By transferring the risk from the policyholder to the company; then, you can be properly protected and can pass on wealth to the next generation without paying taxes or paying very low taxes.

Of course, work with a good CPA too.

Go after qualified money first, IRA, ROTH 401k tax differed can also be great, IF, it is with the right A-rated company. How do I know; check your statements? If you have lost any money in your ROTH or 401k in the last few years, you do not have a good one. As the good ones gained 4%-6% when all the others lost 20-60%!

Annuities in the State of California are protected by the insurance company and by the FDIC up to $250k, NJ is $500k. You do not like annuities? Neither did I for many years, because they were very bad. Now there are a few good ones that we can do some amazing things with. There are also protected ROTHs and other financial tools to save and protect your money.

Would you rather have your money where it is protected and guaranteed? You can be guaranteed by a financial institution that takes the risk, not you. Some cooperations buy into insurance companies that issue back to the bank, which guarantees you against loss. That is the FDIC and there are others we can help you with all of this and more.

What Are The Financial Risks to Avoid

Suggestions for Year-End Financial Planning

Why Should you have a Financial Plan?

Do you have market correction protection on your account? If not, we need to meet.

Dr. Richard Krejcir is a licensed and experienced Financial Consultant with over thirty years of experience. He has worked for major banks, insurance companies, nonprofits, and families too. He is also an author, pastor, Special Ed Teacher, and financial blogger and holds a doctorate in Stewardship.

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