The increasing woe reports which today's financial media has been projecting about the US market situation has left many retirees wondering about how best to manage and invest their retirement wealth. Many are equally worried because they are not sure who they can trust to guide them on the best options for investing this their retirement wealth, nor are they sure on how to regain control over the way in which their retirement income is invested. They feel like they've tried all the supposed 'solutions' or looked at all the different retirement financial planning alternatives out there and realize that those 'solutions' really aren't that different from what they've done in the past - and what they've done in the past has not worked.
I intend to show you that there is a way that you can end your frustration and regain control of your retirement finances. It is possible to watch the news and not be worried that the next crisis will devastate your retirement portfolio - and your lifestyle. You can get back to that place where you can sleep at night - regardless of market conditions - and once again focus on the things in life that are far more important than money. There is one requirement though - you have to be willing to take a step back and look at your financial planning with a fresh set of eyes.
Making Well Informed Decisions For The Investment Of Your Retirement Wealth
The Wall Street System has over the years tried to make investors feel that investing one's retirement wealth is easy; they would like to have investors believe that if they follow their advice, everything will turn out perfectly. But this is simply not true as you would have found out for yourself by now. Investing one's retirement wealth has never been an easy or simple matter. There are no magic tricks. If there were a magic solution then everyone would be doing it and would be successful at it. If it were that simple then you wouldn't be frustrated; you wouldn't need to read this article.
To explain my position, allow me to use a simple analogy based on the Discovery Channel's Gold Rush Alaska TV show. This a brief summary of the show as described on the Gold Rush Alaska website for those that have not watched it: "In the face of the economic meltdown, determined men risk everything to strike it rich mining for gold in the wilds of the far north. Todd Hoffman of Sandy, Oregon, along with his father, lead a group of greenhorn miners in search of the American dream and a new frontier." As interesting as the show is, it becomes even more interesting when one realizes how the mistakes made by the actors can easily be applied to today's Wall Street investment strategies for wealth investors. I will demonstrate this in the following points:
They knew enough to be dangerous but not enough to be successful. Todd Hoffman is the 'leader' of the group, and he and his dad do have some business experience running a small airport - they believe from this experience that they can successfully run a gold mining operation. They do enough homework to make themselves think they know what they are doing, but they didn't (as far as we know) spend any extended time with those who are running successful mining businesses
They cut corners to try to save money only to end up spending more in the end. They purchased some equipment in Oregon and trucked it up to Alaska at the beginning of the season but did no research on how to get the equipment to Alaska. They tried to cut corners by building and/or repurposing old equipment because they were trying to save money. When they got there and started to use it, it literally fell apart-costing them weeks of time and thousands and thousands of dollars. Instead of saving money by cutting corners, it ended up costing them valuable time and money.
They were making decisions by the seat of their pants and didn't have a clear, written plan. Finally arriving at their claim site in Alaska, they now embark on digging, making emotional - not rational - decisions on how to do so. We keep hearing Todd 'guarantee' that they were going to find gold then something would go wrong and they would go in a different direction. All this time, the others weren't getting paid and were facing financial ruin. But they'd hang on to Todd's assurances and hope for the best. What factual reality did Todd have to give those guarantees? None, but because they all wanted it to be true they accepted it as truth and kept following him.
They needlessly put their success at risk by putting all their eggs in one basket.. A 'glory hole' is the bottom of a waterfall where all the big gold nuggets from centuries past are supposed to have accumulated. When Jack heard about the possibility of one existing, he stopped what he was doing and rushed to that spot and started digging. The fact that he'd have to dig down possibly seventy-five feet moving hundreds of tons of dirt didn't deter him; he didn't think about how much of their limited time would have to be spent just to dig down far enough, nor did he check with anyone else about what they thought. The team spent their entire first season trying to dig down far enough to get to what would have been the bottom of the ancient waterfall. The success or failure of their entire season and the financial survival of many of the crew rested on that one spot. Here's the key: there is always opportunity cost associated with what we do. The time spent trying to dig down to the glory hole was time they couldn't spend searching in other areas for gold.
They lose money. It really shouldn't come as a surprise but the end result of only knowing enough to become dangerous, of trying to cut corners, or not having a clear plan and putting all their eggs in one basket was that they ended the first season having spent over $300,000 and they only had $15,000 of gold to show for it. They kept digging themselves into the hole (literally) because they were convinced-they were going find gold. They didn't. Yet they found just enough gold right at the end to convince them that if only they had more time they would have hit the mother lode. Instead of seeing it as a complete failure and recognizing they needed to change course, they decided that they just needed more time.
They didn't learn from their mistakes and doubled down-investing more money in a plan that wasn't working.Over the winter, Todd decides they have to try again-he just knows that they'll find gold this time; lots of it! Instead of learning from his mistakes, he decides that if one gold mining operation is good, two must be better! So he tries to find another lease so they can work two locations at once, 600 miles apart. And he's doing all of it without any money, not based on actual research but-what else-because he just knows it will work. But he doesn't have any more of his own or his dad's money, so he goes to his sister so he can spend her inheritance as well.
The bottom line is? If any of the gold miners had consulted a successful goldminer first, they would never have been in any of these positions. Does this sound familiar to you?
There are times i must agree, that one needs to be careful about who is chosen as an industry expert or advisor. In the case of the Wall Street System for instance, where there are so many different salesperson advisors parading themselves to represent all types of business interests, caution will certainly need to be applied about who is consulted on what. But more than that, wouldn't it be more effective to work with financial experts outside of this system who can meet your needs with equal knowledge but with the added advantage of less fees and layers of bureacracy to deal with?
This article is an excerpt of the latest book of Jeffrey Voudrie, How Successful Investor's Tripled The S&P 500: The Secret To Stop Playing By Wall Street's Rules, End Your Frustration, REGAIN Control Of Your Finances and NEVER Have To Worry Again. To find out more about this book and others in The Retired Investor's Survival Guide Series, pleaseclick here:
Jeffrey Voudrie is a Certified Financial Planner and nationally recognized financial advisor. Jeff has been in the financial industry for twenty-five years, and has been interviewed by The Wall Street Journal, CBS Marketwatch, Kiplinger's, The London Financial Times, The Christian Science Monitor, CFO.com and Financial Planning Magazine. For more information on Jeff, please visit: www.jeffvoudrie.com or www.commonsenseadvisors.com