Is Your Financial Plan Safe and Secure?

There’s a saying that a ship in a safe harbor is secure, but that’s not what ships were built for.

People say starting a business and/or borrowing to start a business, or invest is “risky”.

The only resource that’s truly limited is your time on this earth. Every other resource is replaceable. It begs the question, not how will I spend and invest my money, but: How will I spend and invest my LIFE? Spending your whole life trying to avoid risk, is the biggest risk of all in my opinion.

Frank McKinney, author of “Make It Big” says to excercise your risk threshold like a muscle and you’ll be able to withstand gradually greater pressures. Risk is Frank’s favorite four letter word-- that’s what he said in an interview with Mike Litman.

However, if you’ve been able to meet Frank and see what he does, you’ll see that with great risk comes great rewards! Risk is also offset by knowledge. In fact, going back to Robert Kiyosaki-- what he says is correct. There aren’t risky “investments” but risky INVESTORS. Meaning, the person determines the risk level. For what Frank does, the way he does it-- it’s not that risky.

Frank builds multimillion dollar single family homes. He ONLY builds them in West Palm Beach County, Florida. Ocean Front in south Florida is his market. He knows how many houses are on the market at any given moment, who’s looking to sell, & buy. In many cases he knows the houses themselves-- every detail. He knows how much they sold for the last time, and when that was. He knows the buyer’s and seller’s situations. While we visited with him, we caught a few glimpses of his vast store of knowledge, and it was awe inspiring.

You can stay where you are and complain about a “living wage”; or you can keep chugging along maxing out your 401(k)-- maybe an IRA; You can count your house in your net worth if you want and call it your biggest “investment” and pretend that it’s an “asset”. There’s nothing wrong with that. You just have to be happy with the results.

If you’re miserable, it’s time for a change-- and the one that has to do the changing is you. You can build wealth a number of ways. A lot of people become very wealthy as employees. That is, they accumulate a great deal of wealth. They’re able to do this because they do not spend much. Employment provides a number of ways to slowly, over a very, very long period of time-- 40 to 50 years, to accumulate wealth.

It’s just that these plans which are good for very, very slowly accumulating wealth are not very good DISTRIBUTORS of wealth. And here’s the worst part-- they aren’t particularly safe, either.

So, you take a really long time and you may find out after 50 years of working 40 hours a week for 49 weeks out of the year-- that your plan for accumulating wealth is worth significantly less than what you planned. And since you were not diversified-- that is you were ONLY an employee, you never invested in real estate because it was too risky, you never started a business, or built any other asset other than your company, or individual retirement plan which invested primarily in equities-- you find you must continue to work until you die.

Not the best plan if you ask me.

Is that your goal? To make it safely, and securely to your grave?