My parents did everything that they were supposed to do. Mother taught school and my father spent his entire career in HR at an oil company. They got married, bought the house, had the kids, saved their money, and life moved along. When my father retired, his financial advisor told him to take the “lump sum” instead of the pension, and when they died, there was very little money left. It was heartbreaking to see my father so worried about not being able to afford to stay in his home. My family learned the hard way that most financial advisors are simply salespeople. Of course, they are going to tell everyone to take the lump sum!
You see, most advisors are taught to offer the financial instruments that their company, or partner company, wants them to sell. For the vast majority, the stark reality is that “fiduciary” and “diversifying” means to put a combination of investment options (from the options that they have access to) together for their clients based on the client’s investment goals and timeline. There is a reason why the first question every financial calculator asks is, “How long do you expect to be retired.”
The fact is that our government wants us to die broke, and they plan it that way. Can you believe it? Our government doesn’t have our best interests at heart! Shocking, right?
In the early 1980s, IRAs and 401ks began to get some mainstream traction. I remember one Christmas my parents opened an IRA and put the maximum $2,000 in it for me. Since 1985, based on the average 6% annual stock market return, that money is now worth about $15,000. However, since inflation has grown by 172%, that money is worth less than $5,423 in today’s dollars. Not so great, right?
Three things then add insult to injury.
First, that $15,000 is taxed as regular income when I finally take it out… not at the capital gains rate. Second, when my family helped me start that IRA, I essentially was in the 0% tax bracket because I had no income of my own. Now I’m paying taxes on $15,000 for an investment that, in today’s dollars, is worth a fraction of that. Finally, and most tragic, I must sell the investment to use it. Once I do that, it’s gone. My portfolio now has less money in it to compound growth. As we age, our nest egg shrinks.
Wall Street tells us to invest for the long term, yet they trade in nanoseconds, so the market goes up and down. The government requires you to take money out once you hit a certain age, and every year you withdraw means the smaller your balance is there to help the account recover.
In 2008 alone, the “ultra-conservative” portfolio that my parent’s expert financial advisor had them in dropped 20%. It eventually recovered, but not until four years later. They were both gone by 2011.
The whole system is a racket at best, so I began to search for a better way. In 2014 I discovered private real estate syndications. In the beginning I was sure it was a scam because Wall Street wants us to believe it’s a scam, but through that supposed scam, I’ve discovered an entire new world of diverse private investments that the uber-wealthy have known about for generations.
The major financial firms spend millions of dollars in advertising to make sure that the masses don’t know about alternative investing. Wall Street needs us to believe that the “safest” way to a glorious retirement is to keep our money with them. The government puts hurdles in our way to investing privately as well. To invest in one of my projects you need a net worth of over $1 million and/or an income significantly above average.
There is little to no advertising – that money goes to investors – so most of the time you must know someone to find them. Therefore, typically only the uber-wealthy know the right people and can access investments beyond what is offered to the rest of us. I’m doing my part to change that.
As an Elysian reader, you are now in a group of extraordinary women who freely share their knowledge on a myriad of subjects. My contribution will be to share what I’ve learned about how money really works. I’ll expose secrets that until very recently were unavailable to those who weren’t in the club.
Now, consider yourself invited.