Episode 22: The Wealth On Any Income Book – Step 4: The 6 Roadblocks to Complete Financial Choice®– Transcript

Wealth On Any Income Podcast Episode 22

Hi Folks, Welcome to the Wealth On Any Income podcast. This is where we talk about money tips, techniques, attitudes, information and provide inspiration. I’m your host, Rennie Gabriel.

In the previous episodes I spoke about your five year financial goal; how to work with other people to achieve your goals and the difference between good debt and bad debt, and how good debt can support you to create wealth.

Today, you will hear about the six roadblocks to creating Complete Financial Choice®. It will be around 15 minutes.

As I read, I could stumble over some words. I am not a professional voice over actor so please forgive me if that happens.

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The Six Roadblocks

There are six roadblocks that can slow you down on your road to Complete Financial Choice®.

1. Debts

2. Economic Conditions

3. Taxes

4. Asset and Risk Management, Frauds

5. Human Problems and

6. Procrastination.

1. Debt

Debt can slow you down from creating financial independence. As I read to you in step 2, if you make minimum payments on a credit card you could pay 200–400% of retail. This applies to your home as well. A typical 30-year mortgage at 6% will have you pay back $215,838 for each $100,000 you borrow. You’ll be better off both psychologically and financially the sooner you eliminate debt. But this does NOT apply to investment real estate.

Would you pay $565,904 for a new car? If you paid $400 per month for 48 months instead of investing that $400 at 12%, you would have given up over a half million dollars 30 years later for the $19,200 you made in monthly payments.

2. Economic conditions

Economic conditions deal with inflation, recessions and things like a pandemic. Companies may be adding or laying off employees and these are natural cycles the economy will experience. You are in a better position to prevent this from having an impact on you by the level of training and education you have. The more knowledge you have, the better—providing you take action on what you know, and your knowledge is in a field that’s growing and not shrinking. You could know everything there is to know about buggy whips, but that probably won’t provide much economic security. Even if you have your own business, the concept of having more knowledge and taking action on it still applies to avoiding the impact of an economic downturn, or getting more from the economy as it rises. As a read this in January of 2021, we are still in the grip of a global pandemic that has destroyed many businesses.

3. Taxes

Taxes are the fuel to support the system which gives us the opportunities and freedoms we have in the United States. There is no law, and there never has been a law, which requires anyone to pay more in income taxes than is required. The more you know about the income tax code, the more money you will save and the more money you will have available to invest for your financial freedom and to create Complete Financial Choice®. Take advantage of financial planners, Certified Public Accountants and others who know the tax laws if you don’t want to know this yourself. Be aware, you still need to know what’s going on. When you sign the tax return, you are the one who is responsible, not your accountant.

As an example of advice you probably won’t get from a CPA is the concept of how to create wealth and avoid income taxes. Our tax structure is set up to tax income, not increases in wealth. If you own stock or real estate and it doubles in value in one year, you don’t pay any income taxes on that increase in value. You do pay taxes on interest, dividends, or your personal earnings, but not on an increase in your wealth. If you sell a stock, then you have created a taxable event that would now be subject to either income or capital gains taxes. Nothing occurs unless you trigger a taxable event, like selling the asset.

4. Asset & Risk Management or Frauds

Asset and risk management or frauds are areas that represent tremendous opportunity for either growth or major setbacks.  This involves insuring what you can’t afford to lose, and investing in areas where you won’t be ripped off.

When it comes to frauds, I have file folders full of different ways people have scammed others from phony oil wells to fraudulent trust deeds and fake gold. To effectively manage and protect your assets, rely on experts you know and trust. Limit your investments to the areas you know and understand. If you don’t understand it you could lose lots of money quickly and easily. I lost a huge amount of money investing in a restaurant because I was not completely and personally familiar with that business. Many people lost millions of dollars when Bernie Madoff’s Ponzi scheme failed. Prosecutors in 2008 estimated that over $60 billion was lost. On the other hand I have made millions of dollars in real estate because I understand it well.

5. Human problems

Human problems are the items such as sickness, disability, death or divorce that can cause a slow down in the creation of your wealth. Some things can be taken care of by insurance. Others, like divorce, deal with working on relationship skills. A divorce does not have to be messy, angry and a financially devastating event. I know this from personal experience. They were costly to me, but not devastating because we maintained the ability to communicate as adults.

6. Procrastination

Procrastination is one of the largest roadblocks to wealth. Your first step in overcoming it is to continue to listen to me read this book. The next step is to take action on what you hear. Fill out the forms, ask yourself questions, ask other people for support or referrals, pay yourself first and invest your wealth to create Complete Financial Choice®. You’ll learn about these items in the chapters that follow.

Where will you be at age 65?

The following are the results of not having a financial education and the challenge we face. This book will provide you with the tools to use so you won’t have to face these dismal circumstances. This information was compiled from government data (for which your tax dollars paid) and insurance company mortality data. Mortality data is what insurance companies use to determine how long people will live, or when they’ll drop dead. Insurance companies have proven to be very profitable playing the odds.

In the United States the picture looks pretty bleak at age 65. For every 100 people who start working at age 25, the following are the results 40 years later. While the dollar amounts are based on figures from 2011 to 2014, the percentages have hardly changed at all.

20% of the population won’t even be alive at 65. I’m saying that almost 1 out of 5 people don’t even live through the 40 years of work. Just think for a moment. Do you know someone who has died prior to age 65? You probably do.

10% of the remaining population, about 23 million seniors, have an income near the poverty level. In 2014 this was $11,670 per year, or $972 per month

12% will have half their income coming from Social Security which is about $1230 per month, or $14,760 per year! The poverty level for a married couple was $15,730 in 2014. The total income for people in this group is just under $30,000 per year.

16% will have a median annual income of $35,107 based on 2011 figures. The median is a half-way point. This is roughly $2925 per month. Can you picture yourself today living for the next 25 years, or longer, on $2,925 per month? And, this includes social security.

You may be listening to this well after 2014, so don’t dwell on the specific income figures. Inflation will have made the income numbers higher, but the percentage of the population near the poverty level will still be around 22%. The percentage of people who will have to struggle with an inadequate income will still be around 38%. These percentages have remained virtually unchanged since 1970 when they were compiled by the Department of Health, Education and Welfare. What I’ve accounted for so far is 58% of the population.

Only 5%,,, fewer than 1 in 20, will have an income of $7000 per month, or more, after age 65, which would be considered successful. 95% of the population is either dead or dead broke by retirement age.

Do you think someone wakes up on their twenty-fifth birthday and says, “I think I’ll work hard for forty years, make lots of money, spend more than I earn so I can live in poverty for the rest of my life?” No, they didn’t plan to fail. What happened? They just failed to plan.

With this book, I’ll do everything I can to support you to take the actions necessary to create a better future for yourself. If you’re willing to follow my instructions, you will have completed a five-year financial goal. It will be your goal; a goal that will be possible for you. A goal that will be your inspiration to use the tools I’ll provide so you can create Complete Financial Choice®.

If you want to check the accuracy of any of the statistics I used, a simple Google search will provide verification. In the paper version of my book I provided the actual links.

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Here’s your opportunity to grow: Do a Google search to confirm the data I provided about the level of poverty or wealth at age 65.

In the next episode we’ll start the third section of the book where I cover the tool, tips and techniques that will lead to you having Complete Financial Choice®. We’ll start with a tool that will show you how to get out of credit card, or any consumer debt, easily and forever.

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Until next week, be prosperous. Bye, bye for now.

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