Tom's Blog

In Tuesday's USA Today, there was an article on the front page of the Money section with this title. The article quoated several financial advisory firms as saying that they are now recommending that people have enough money on hand to replace 126% of the pay in retirement instead of the "traditional" 70-90% because of rising medical costs.

Of course, this begs the question of why you would want to merely replace your current income and force yourself to maintain your current lifestyle in retirement instead of improving your lifestyle in retirement. I have not met anyone who has ever told me that there goal for retirement is to "get by." When you retire, you want to improve your standard of living, not maintain or decrease it.

The article goes on to say that only 19% of employees are on track to meet their retirement "needs" (there's that word again - needs). About 67% of workers are expected to have less than 80% of their proposed needs. So people are not even meeting the minimum. The financial advisors in the article suggest that people need to save more so they can meet their retirement needs.

What's wrong with this picture? It's not simply that people are not planning for their retirement. It's that they are not being successful with their investments!!! Why not? My experience is that a) they are listening to the wrong people; b) they are investing in the wrong assets; and c) they have no strategy for building lasting wealth.

With a decent wealth strategy, a good wealth coach, and sustained effort, EVERYONE should be able to retire the way they want to and in a much shorter time than these financial advisors would suggest. Please, if you haven't already, go to the ProVision website to read more about Wealth Strategy. For those of you who are serious about building long-term wealth, download our Financial Freedom Now! home study kit at http://www.provisionwealth.com/products.

Whatever you do, take action now!!! The most important investment you will ever make is in your financial education. Financial Freedom comes to those who understand how to make money and give their wealth building a focused, sustained effort with a strong financial team.

Warmest regards,

Tom

Aloha from the Big Island of Hawaii. I'm here on my annual trek to total relaxation. Normally I don't do work during this 2-week break, but I have a little break from activities (strenuous ones, you know, like golf and scuba - more about this in a later email).

Sheila L. asks the following question: Any thoughts on... a Self-directed IRA versus a Solo 401k as a better method for reducing taxes while maximizine investment opportunities for retirement funds?

As always, a question like this prompts an important additional question - What are you going to invest in?

What you invest in has a huge impact on whether you should contribute to either a 401(k) or an IRA. If you are investing in real estate, it is almost always better to invest OUTSIDE of your IRA or 401(k). For more on this, see our course about investing in real estate in an IRA at http://www.provisionwealth.com/products.

On the other hand, if you are doing option trading, an IRA or 401(k) can be great, so long as it is a Roth IRA or Roth 401(k). In this case a solo Roth 401(k) is probably better, since you may be able to contribute more than you could to your IRA.

If you are investing in a business, normally you are better off investing outside of your IRA or 401(k). However, there are siutations where investing through your Roth IRA or Roth 401(k) can be hugely beneficial. If this is your situation, I strongly suggest you call our office at 866.467.5809 and schedule an appointment with us so we can discuss how to best help you. We have developed some unusual techniques for investing in business through an IRA or 401(k) that I have not seen elsewhere (I'm not talking just about using a C corp for this - there are even better ways for those of you reading this who are aware of the C corp IRA strategy).

I realize you did not really ask the question of whether to invest through an IRA or 401(k) versus investing outside of an IRA/401(k) but I would be remiss in not mentioning that sometimes you just don't want either one.

Thanks for sending such a great question. Glad you are thinking about maximizing your tax benefits.

Warmest regards,

Tom

Aloha again from Hawaii!!! Wish you were here. Seriously, I wish everyone could have the opportunity that blesses my life every year of taking a 2-week vacation in Hawaii, Paris, the Carribean, or the mountains of Utah. If you haven't every tried a 2-week vacation, I would strongly encourage you to plan to do so soon. If done right, it can have a huge, positive impact on your business and wealth. Let me explain.

I'm guessing that most of you take your vacations 1 week at a time. This is a big mistake. The goal of a vacation should be a renewal of your energy so you can be more effective and more efficient the rest of the year. In most cases, a one-week vacation cannot accomplish this. Why not? Well, if you work hard all year and need a vacation to relax you, then the first 2-3 days of your vacation will be spent coming down off of your stress level. The last 2-3 days, of course, you are thinking about what you need to do when you get back home. So you really only have 1-2 days of true relaxation. That's just not enough.

Now add 7 days to your vacation. This is an additional 7 days of pure relaxation and for most people 8-10 days of total relaxation is enough to reinvigorate you for the next 12 months. And while you are on vacation, BE ON VACATION! If you have to answer emails (which I don't recommend), then answer them early in the morning and preferably only 1-2 times a week. If you have properly set up your business/investments then you will have no problem avoiding emails completely for 2 weeks. See our ProVision business and/or wealth coaching for more on how to set things up so you don't have to deal with your business while you are on vacation (go to http://www.provisionwealth.com).

I know, some of you are noting that I am writing this while I am on vacation. Yes, but not because I have to. Because I want to. I want to share this experience with you while it is fresh with me. Let me share a few of the relaxing activities of this past week.

My partner and his wife joined my wife and me this year. (Think about the potential tax benefits from doing this!) Early on in the trip, we took a fishing boat out of Kona. About 20 minutes into the trip, I caught a 160-pound Marlin. We tagged it and released it as there was no way we were going to eat 160 pounds of fish over here.

Later in the week, we did a couple of scuba dives. The last one we did was a night-time dive to watch the Manta Rays. This was truly an amazing experience, as four giant rays did what I can best describe as a ballet for us while we were sitting on the ocean floor about 30 feet under the water. If you ever get the chance to do this dive, don't pass it up. It is truly spectacular.

Then the next day, we took a trip down to the southernmost part of the island to see the green sand beach. Yes, it is really green sand. Amazing!

Today, I took a serious bike ride from Waikoloa to Waimea, something I have tried before but the wind knocked me off my bike. I fought my way through it this time and made it to the top (about 10 miles on a steep incline with serious wind). The reward at the top was my favorite Hawaiian diner, the Hawaiian Style Cafe, where I had a pancake as my reward (yes, just a single pancake and I didn't even finish it - their pancakes are 9" in diameter) before heading back down. This is the only ride I have ever done where the downhill portion was tougher than going uphill. The crosswinds twice blew my bike a foot sideways and I barely hung on until reaching the bottom.

Hope I didn't bore you too much with my travelogue. And I really hope you take the opportunity to take a 2-week vacation soon. It's the best. If you are worried about the cost of such a vacation, check into our ProVision Strategic Wealth Coaching. Anyone can become financially free with the right education and the right coach.

Well, that's all from Hawaii. I'll write again next week when I'm back in Phoenix.

Warmest regards,

Tom